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In part 1 of this two-part column, I wrote about the psychology behind hiring decisions. In a nutshell, people will do more to avoid pain than to gain pleasure.
One implication of this is that decision-makers aren’t necessarily going to choose the cheapest hiring option if they already have an approved budget, nor will they choose the option that promises the highest upside. The decision-maker will choose the option that represents the lowest risk of their getting fired.
Therefore, if we are in business development—whether we are selling products or services on a B2B level or are hired by a company for employment—we need to position ourselves in a way that demonstrates that we are the low-risk option.
How can we do this?
First, identify the risks. Decision-makers weigh three core risks: financial, time and reputation.
Financial risk represents the gamble that money spent with a consultant or contract will be a bust. The more a person charges, the more risk the buyer must weigh when making a purchase decision. But if a buyer has an approved budget, the financial risk is low if the proposal comes in under budget.
That leaves time and reputation as the two biggest factors business development professionals must overcome to build trust and close the deal.
The first represents the total time it will take to implement a solution and for others at the company to adapt to it. An example is the amount of training time required to develop a new hire into a self-sufficient, productive team member. For most decision-makers, this unknown period is the risk they are worried about.
To succeed with a decision-maker, the person proposing a change needs to demonstrate that the plan is achievable within a proposed timeline. If someone promises too short of a timeline without much proof or track record of achieving that, the plan represents high risk. If someone shares a timeline that is too long, the plan represents high risk as well because there is no chance of meeting expectations.
Reputational risk is affected by the number of people impacted by a decision-maker’s action. If a decision-maker hires a consultant who impacts the work of only a few people, the reputational risk is relatively low. But if a decision impacts everyone at the company, reputational risk is high. A bad decision increases the decision-maker’s chance of getting fired or losing credibility.
Therefore, if we are a small to medium-size consulting company looking to get business (or a candidate for hire who doesn’t have a ton of experience), we need to do things to de-risk the option for the decision-maker.
Here’s a formula for doing that: Proximity + follow-through = trust.
For proximity, the more time a business development professional can spend with a prospect, the more trust and rapport and connection are built. And for follow-through, do what you say, and say what you do. If you promise to deliver value, do it.
How can consultants achieve this with their prospects?
One thing my team at Ambition In Motion has done for consultants is help them set up their own executive mastermind groups through which leaders come together to work through a challenge. The consultant facilitating the group is there to create a safe space for leaders to discuss and build trust.
This has been incredibly helpful for consultants because it often creates an opportunity to engage with a prospect before committing to a bigger contract. And it keeps the consultants from appearing like door-to-door salesmen when an opportunity for partnership arises.
For example, a consultant might propose services at $20,000 per month over a six-month period and incorporate 50% of the company’s workforce to achieve a certain result. Financial risk = $120,000. Time risk = six months and a certain number of hours from each participating employee who is deviating from what they normally do. Reputational risk = 50% of the company.
Without trust, it will be incredibly hard for a consultant to land this deal.
The prospect might say, “I am interested, but follow up with me in three months.”
Will this lead to a deal? Maybe. But a lot of things can happen in three months.
So instead, the consultant can offer the prospect the ability to be in an executive mastermind group and offer a helpful service now while building long-term trust. Financially, that’s a more cost-effective option. It also requires a much smaller time investment and probably involves only the organization’s decision-maker.
Over time, as the prospect develops trust with the consultant, it will be a low-risk proposition to hire the consultant for expanded services.
If you are a consultant, executive coach or anyone in B2B sales and would like to learn about setting up an executive mastermind group for yourself, reach out to me on LinkedIn. I’d love to tell you about it.•
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Mintz is founder of Ambition in Motion, a firm that helps companies increase employee engagement and collaboration by implementing corporate mentor programs.
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