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Sales risk is the potential for sales failures. This includes risks associated with an opportunity, account or broad risks that impact your entire pipeline. The following are common types of sales risk.
Failure to disqualify poor quality leads. For example, leads that are in financial distress that result in failure to close or failure to pay.Spending significant resources on an opportunity that is low probability due to factors such as internal budget approvals. Mistakes in engaging the customer that make closing difficult. For example, slips that make it seem that you don't have much experience in the customer's industry.
ProposalA proposal that isn't as high quality as the competition resulting in loss of a deal. For example, a proposal that is rejected by the customer because it doesn't conform to an RFP.Poor objection handling resulting in failure to close.NegotiationA negotiation that fails to close a deal. For example, misreading customer motivation.
FinancialFinancial risks such as a price that is lower than your likely costs to fulfill your obligations to the customer.Customer RelationshipsCustomer churn due to factors such as competition or customer service issues.ResourcesLosing top performing salespeople to a competitor who then attract your customers to competing products.IncentivesLow morale due to sales quotas and targets that are perceived as unfair.
Sales ChannelsChannel conflicts such as a sales team that ends up competing with value added resellers of their product.EconomicAn economic downturn or recession that results in customers freezing new spending.Regulations & TaxesNew regulations or tax structures that result in declining sales. For example, introduction of a special tax for real estate purchases by foreigners.
Customer NeedsShifting customer needs and perceptions that result in less demand for your product. For example, a technology product that is initially hyped that enters a period of customer disillusionment.Competition is a risk at the opportunity, account and product level. For example, an innovative competitor can result in the perception that your product is out-of-date.|
| Type | | | Definition (1) | The potential for sales failures. | | Definition (2) | Potential events or conditions that result in the failure to meet a sales objective or goal. | | Related Concepts | |
Sales
This is the complete list of articles we have written about sales.
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