How to use fear to sell

One of the earliest lessons I learnt in business was the “fear, uncertainty and doubt” factor (which I call FUD).  

Basically, people don’t know what they don’t know, so informing them of looming disaster can seriously motivate them to purchase a solution.

Of course, it helps if you happen to have the only solution in town.

The FUD factor falls into a category of techniques based on the “compelling need” strategy. People will not hesitate to purchase a product or service if it saves their lives, takes away serious physical or mental pain, or keeps them out of jail.

However sometimes they don’t realise what danger they are in, so you need to give them a little prod. So finding out that there are billions of nasty bugs lurking in your toilet or having a party on your tongue can get people out of their comfort zone and send them out with their wallets looking for a solution.

In business-to-business ventures, you need to keep your eye on regulations. Resolving compliance problems is a great way to stimulate business. Few business owners will hesitate to step up to a solution if they know that failure to do so will result in a fine, maybe closure of their business and, in the worst case, send them off to jail.

So by keeping track of recent or emerging regulations within your target customer area, you might be lucky and trip over a need that you can satisfy.

Your next task is to ensure that your customers and prospects understand the imminent danger they are in but, fortunately for them, you are there ready with the solution.

One class of individual who is especially sensitive to this type of approach are members of boards of directors. They are particularly vulnerable to situations involving safety at work, compliance requirements in financial reporting, governance issues, and duty of care. Thus any aspect of these that are not being looked after well exposes them personally.

The FUD approach works especially well soon after a high profile damages outcome of litigation. If you have a solution that would have prevented the negative outcome from occurring, either by stopping the problem or showing that due care was taken, this is a good time to get out there and market it. Even better if you can show successful outcomes within your existing customer base.

Products and services that satisfy a compelling need are easier to sell as they have less customer resistance, tend to be less price sensitive, and have much shorter sales cycles.

However, if this is to be the basis of a growth push, you also need to have a competitive advantage in your offering. Thus products that have strong underpinnings of intellectual property or intellectual capital have the greatest chance of establishing a leadership position.

Then it is simply a matter of picking the right target market. Clearly, those potential customers who have the most to lose by not buying are the best ones to go after.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.