Biggest Risk a Sales Person Can Make (Part 1)
What’s one of the biggest risks a sales person can make?
Not diversifying their pipeline
In the article I’m going to highlight why this is one of the biggest risks you can take as a sales person. My hope is that this steers you to a strategy of diversification.
So, to begin with I want to highlight my point with an example from outside of sales.
In this example we’re going to take a look at brokering firms, say mutual funds whom have portfolios of investments range from stocks, bonds, currencies to commodities. The goal of anyone whom uses a mutual fund or the managers themselves is always the same, to make the most money on their investments.
As you’ll already know, markets can go up and down making investments for such firms or individuals challenging, sometimes they’ll make money, sometimes they’ll lose money.
Over decades of statistical analysis, it has been proven that the route which is most advantageous is to diversify their portfolios.
Well through diversification a brokerage or individual can reduce their level of risk and potentially increase their return. They’re mindful that if they invest all of their capital into one area, say stocks of a company, then there is a high level of risk as they are relying on one outcome, and that is for that companies stock price to increase.
So instead of this approach they mix their investment . They will try to have say a 10% investment in bonds for example, and a 20% investment in commodities. Their goal is to create consistency, they’re conscious that if one area of their portfolio has poor performance, this can be compensated by another area, as long as they’re diversified in the right manner. This may mean that overseas markets are an ideal way for them to diversify and reduce their risks.
So what does this mean for you and your sales role?
Well if you look at our sales pipeline it’s much like an investment portfolio in a way. We have a range of different opportunities which we have invested in, we’ve not necessarily invested capital in them, but we have invested our time into them.
So we should diminish our level of risk in the same way that brokerage firms do, we should diversify our opportunities.
In my book Sales Icon: Selling in the Shadows I talk about the concept of developing a prospect attack plan which basically is a step for identifying which prospects you should qualify ‘in’ and invest time into attacking. I talk in this part of the book of one core mistake that sales people often make and that’s
Focusing on one type of prospect
You’ve probably seen it yourself when a sales peer has focused only on a certain type of business, very often it being the large business that they hope with one sale will reward them with a years target worth of sales. Whilst I would never want to deter somebody from attacking the big fish I would encourage them to structure their approach just to be safe.
What I mean by structure your approach is to proportion your time between a mixture of prospects based on size, i.e. small, medium, large.
If you want to find out the best way to diversify your approach then read my book which is soon to be released.
In the short term, the things you should be doing is diversifying your prospect attack plan and then your pipeline will follow suit.
Don’t let it be the case that you only attack big business (or vice versa), if you do it’s a risk, a brokerage firm wouldn’t take this stance. Have a diversified approach, based on size of business and industry. This way you are diminishing the level of risk in your sales role!