Everyone is talking about risk today. Risk in the economy. Risk to the financial markets. Risk to homeowners, investors and just about anyone who is currently gainfully employed! The media focuses on risk of loss – risk of something bad happening to individuals or businesses. Our view is that there is another kind of risk that not many people focus on – the risk when businesses don’t understand the need to change, and don’t review their own activities to see where their vulnerabilities may lie.
When we work with companies of all types of sizes in financial and professional services, and in technology, we find three key areas of “risk” that many times are overlooked until a problem arises and they demand attention.
Let’s consider those areas and see what a firm can do to be proactive, instead of reactive:
This one can take many forms depending on the life stage of a company, the strength of their products and services and their competitive positioning. Most often the risk factors have to do with lack of a clear and consistent plan to motivate and support sales reps. It is often assumed that the reps are the problem – they just need to “sell more”. Instead, a firm seeking to mitigate their risk could look at the obstacles the sales people may be up against and work systemically to remove those obstacles.
Is the market focus clear for the business development professionals? Is the story solid and competitive? Is the compensation program aligned with the business goals? Do sales professionals get the necessary market feedback and internal communication about what the firm is doing and what clients have to say?
For a company looking to minimize their sales risk, please see The Collaborative’s proprietary Sales Effectiveness Model. It outlines the 8 areas a company will want to look at to ensure that the sales process stays on track.
This one goes hand-in-hand with sales and really underpins a successful sales effort. In difficult times a company might make the mistake (and take on the risk) of using an age-old message. While the message might have resonated in good times, it may fall on deaf ears when economic conditions turn sour.
In addition, the market may change – and what it wants to hear about – in response to the economy. For example, in our business we are seeing a different prospect profile contacting us every day for marketing support. Where we may have designed our message one way in the past, we need to redefine it for the market showing interest now. A firm will want to be nimble and be sure they are crafting a message, and delivering a solution, that works for the times and the audience.
The risk also lies in not knowing what employees think about the story and the marketing activities. Are they aware? Do they know how to comfortably talk about what the company offers? Can they identify the ideal profile of a client? Taking time to collect input from employees and ensure the story is told well throughout the firm – and that the tactical tools align with the sales process – will mitigate marketing risk.
It goes without saying that in a downturn your clients are likely getting pinched economically and are under a lot of financial and emotional strain. And – see Marketing Risk above – you can bet that competitors are doing everything possible to take your customers.
In times like these communication is paramount. Establish “early warning” processes and check-points that your sales and client service people can use to flag customers-at-risk. If you haven’t done a formal customer survey in a while consider hiring a third party to do qualitative phone or in-person interviews. A qualitative approach results in your client feeling truly heard and yield much richer information to you. This helps your firm adjust service, spot trends and more proactively save unhappy clients.
Clients are feeling the same strain and concerns in their lives and their companies that your firm may be experiencing, reach out to them and show them that you understand what they are dealing with. Bring them in as collaborators to help make your offerings stronger and most effective for them.
In summary, these are three potential risk areas that may require examination by your firm. It is always helpful to assess and understand your vulnerabilities. We’ve found that small problems can become large ones under stressful and difficult conditions. Why not be proactive in your approach to stave off any potential areas of risk? Taking the time to talk with your staff, review your current state in these areas and complete an internal assessment may save you time and money in the long run.