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Overcoming Risk Aversion in Selling

Written by: Harlan Goerger

Article Overview: The reality is all people have some aversion to risk in making decisions, how do we overcome this as quickly as possible in our sales and persuasion efforts? Here are key points.

Overcoming Risk Aversion in Selling

The deadline is approaching, your month is ending and the prospects that should be closing and going for it are not!

What is a salesperson to do! We done the discovery, asked the questions, provided the solution, yet we seem to get inaction from the client.

The issue might be RISK AVERSION and we may not have addressed it effectively. As a matter of fact we may have inadvertently reinforced our customers Risk Aversion, thus creating part of our challenge!

Here are some tools to help address this issue that everyone has when making choices and decisions.

To understand what is happening, let us review the decision process virtually everyone goes through in making choices and evaluating risk.

• 1. All choices and decisions are filtered by our personal beliefs, no matter the validity of those beliefs.
• 2. All choices require some type of reference point for comparison. The more recent the comparison the more relevant. Ie. What is a good deal if I have nothing to compare to.
• 3. All choices are influenced by our emotional state at any given time. If we are highly emotionally engaged toward a yes decision, we move faster. Highly emotionally, fearful of potential risk, we most likely say no or drag our feet.
• 4. The logic of the choice; this will vary in importance depending upon the behavior profile of the person, more detail people require more input. Idea people tend to require less logic input.

As a salesperson we need to be aware of all four aspects and how to discover and influence these when working with our clients in making choices.

So how might we influence these choices positively and move decision and actions along! Some recent information can give us insight.

The tool is called priming. Priming in psychological terms is starting or placing an idea or thought into the communication or persuasion prior to the actual communication or choice. This priming then influences or affects the final choice.

This priming influence can be a positive force or a negative force. It can assist in overcoming risk aversion in a decision or amplify the risk aversion.

An example of priming, you hear about someone being mugged in a parking lot the night before, just prior to your leaving some friends. As you walk through the dark parking lot, you hear a noise and react with thoughts of a mugger. If you had not heard the story of the mugger, you might have thought, those darn alley cats are at it again.

The mugger story has primed your thinking and thus your reaction.

The same happens to risk aversion. A recent test by Dr. Doran Klinger put accountants and financial advisors to the test. The short version is this:

Two groups of professional financial people were given stories. One was of a high risk taker that was successful and achieved high rewards. The other of a person who refused to take great risk and thus avoided large losses. The participants were unaware of the priming as the stories were given in the context of a memory testing exercise.

Next, both groups were given the exact same financial information about an unnamed investment to evaluate. The results showed the group primed with the high-risk success story rated the stock higher, while the group with the risk adverse story rated it lower.

The test indicated the financial advisors could be influenced and thus their evaluation and choices could be altered by priming with a risk success or risk aversion story.

This same results has been shown with countless other studies using various situations. The outcomes show very similar results.

So how does this work for you and getting that client to say yes and take action this month?

Here are some quick tips.

• 1. Always use examples or stories that show risk takers winning. Be it other clients or people in similar situations as your client. This primes them to winning because of risk taking.
• 2. Avoid examples or stories of risk aversion and minimizing loss, as this reinforces and primes them to avoid risk taking at any level.
• 3. Watch your body language and words. If the client is communicating, a negative situation it is easy to be nodding yes or agreeing, thus reinforcing the risk aversion through our body language without knowing it. Always take a neutral yet listening stance in such situations. This way you are not reinforcing the risk adversity, yet you are still attentive to the client.
• 4. Use positive winning language such as, winning, being on top, success, positive outcome or achieve. These prime the client with positive outcomes from risk.
• 5. Ask open questions about times when the client has won from taking risks. Once more, this primes them with positive images and emotions from risk.
• 6. Ask what they use or could use as comparisons for this choice or decision. Without comparisons of some type, risk becomes bigger and decisions are delayed. How does your solution fit into the good, better or best comparison? Better, you create this now, as the client will without you, once you are gone.

The challenge is every choice or decision has some level of risk aversion involved with it. We all naturally avoid risk and move away from potential loss. It is reducing the risk aversion as quickly and early as one can that will aid in moving the decision and action along.

So rather, than being reactive, top producers are proactive and apply the idea of priming to move decisions along faster. You can do the same.

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Article Tags: choices, decisions, discovery, emotional state, inaction, insight, li li, logic, matter of fact, personal beliefs, persuasion, prospects, psychological terms, reference point, risk aversion, salesperson, validity



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