Super Agent

What Level of Risk Are Your Clients Willing to Assume?

In the 1971 song by Janis Joplin, “Me & Bobby McGee” Joplin opines, “Freedom is just another word for nothing left to lose.” Unlike in the 70’s classic, your prospects and clients have plenty to lose.

Understanding the risk-tolerance of your prospects is a critical aspect of the assessment process, but it’s a conversation that is sometimes overlooked.

In a workshop a few years ago, a gentleman shared how he broaches this important subject with his prospects. He starts by drawing a line on a blank piece of paper. At the beginning of the line he writes down the date the business was started, for example, 1985. He then engages the prospect in the following dialogue:

“I assume, way back her in 1985, you didn’t have too much to lose. I suspect you were willing to take more risk than you are today.”

Going back to his drawing, he writes down 2016 at the other end of the line and says,

“Here we are in 2016. I suspect you’ve created a lifestyle and a certain level of wealth that you’d like to protect. Is that correct?”

By utilizing a simple illustration on a blank piece of paper, he is able to engage the business owner in a fairly intimate conversation about what’s important to him today; and focus on what it is he’s trying to protect.

Entrepreneurs, though sometimes cowboys, most often want to protect the wealth and other assets they’ve accumulated through hard work. Even though their business may be strong, and appropriate for a risk financing strategy other than guaranteed cost, doesn’t mean they’re willing to assume a greater level of risk that comes along with some alternative risk financing methods.

The strategy shared can help you engage your prospects in an important conversation that sometimes gets overlooked in the sales process and will help you present solutions that are in alignment with the level of risk your clients are willing to assume.

How are you initiating this conversation with your prospects?

Leave a Reply