6 Essential Risk Management Practices for Winning Sales Teams in 2024
In today‘s fast-paced and unpredictable business landscape, sales teams face more risks and uncertainty than ever before. From increased competition and pricing pressures to rapidly evolving customer needs, the challenges of driving predictable revenue have multiplied. In this environment, sales risk management has become a critical capability – one that separates the winners from the losers.
So what exactly is sales risk management? Simply put, it‘s the practice of identifying, assessing, prioritizing, and mitigating risks that could negatively impact your ability to hit sales targets and grow the business. Just like a doctor evaluating a patient‘s health risks or a skydiving instructor checking equipment before a jump, sales leaders need to proactively manage risks to ensure the safety and success of their teams.
Why does sales risk management matter so much in 2024? Because the costs of ignored or mismanaged risks have never been higher:
- 74% of sales organizations miss their forecasts due to unanticipated risks (Source: Clari)
- A single failed high-risk deal costs $218,000 on average (Source: Gartner)
- 3-5% of sales leaders are fired each year for poor risk management (Source: CEB)
The good news is that with the right mindset and best practices, sales teams can transform risk management from a reactive, check-the-box exercise to a proactive, strategic advantage. Here are six essential practices for winning sales teams in 2024:
1. Regularly assess and identify risks
The first step to managing sales risks is knowing what they are. Too often, risks remain hidden until they become full-blown problems. High-performing sales teams build the "risk muscle" by constantly scanning the internal and external environment for potential threats.
One powerful framework for assessing sales risks is SWOT analysis. By evaluating your team‘s Strengths, Weaknesses, Opportunities, and Threats across deals, accounts and the overall pipeline, you can systematically surface areas of concern. For example:
- Strengths: Strong relationships with decision makers, superior product functionality
- Weaknesses: Lack of vertical expertise, complex pricing model
- Opportunities: Expand into new geographic markets, upsell existing customers
- Threats: New competitor entering the space, economic downturn impacting budgets
Of course, SWOT analysis is just a starting point. Sales leaders must also stay on top of broader market, competitive, technological and regulatory trends that could impact their business. Some of the most common types of sales risks to look out for include:
| Risk Category | Definition | Examples |
|---|---|---|
| Competitor risk | Rival actions that threaten your position | New product launch, price cuts, key account defection |
| Product risk | Gaps in your offering vs. market needs | Feature gaps, quality issues, poor product-market fit |
| Pricing risk | Unsustainable or misaligned pricing | Overpriced vs. competitors, discounting, cost increases |
| Customer risk | Potential for churn, downsell or non-renewal | Low usage, support issues, relationship turnover |
| Team risk | Insufficient skills and staffing to execute | Lack of training, turnover of top reps, low morale |
Source: Revenue Enablement Institute
By proactively and systematically identifying these and other risks, sales teams can stay ahead of the curve and avoid unpleasant surprises. According to sales strategy consultant John Hoskins, "The best sales leaders are always looking around the corner for the next big threat or opportunity. They make risk assessment a constant habit rather than a once-a-year exercise."
2. Quantify and prioritize risks
Not all risks are created equal. Once you‘ve identified potential risks, the next step is to quantify them based on two key dimensions – likelihood and impact. In other words, how probable is it that the risk will occur and how big of an effect would it have on your ability to achieve sales goals?
Plotting risks on a matrix with likelihood and impact as the axes is a simple but powerful way to visualize and prioritize them:
Source: Corporate Finance Institute
Risks that fall into the upper right quadrant (high likelihood, high impact) demand the most immediate attention and resources, while those in the lower left (low likelihood, low impact) can be monitored but may not require action.
Of course, quantifying risks is as much art as science, especially for harder-to-measure factors like competitive threats or market changes. Sales leaders need to use a combination of historical data, expert judgment, and scenario planning to put realistic probabilities and dollar values on risks.
One emerging best practice is to assign a "risk score" to each deal and account, similar to a credit score. By analyzing signals like deal size, cycle time, competitor presence, and relationship health, AI-powered tools can calculate a risk score to help prioritize action. For example:
- 750-850: Low risk
- 650-750: Medium risk
- 550-650: High risk
- 300-550: Very high risk
Source: Gong
The key is to have a consistent methodology that enables apples-to-apples comparisons and doesn‘t rely solely on rep intuition. "If you don‘t put a number on it, it‘s just a feeling," says sales consultant Andy Paul. "And you can‘t manage a feeling."
3. Develop risk mitigation plans and playbooks
Identifying and prioritizing risks is important, but it‘s not enough. Winning sales teams also invest time in developing concrete plans and playbooks to mitigate the risks that matter most.
For each high-priority risk, best-in-class organizations create a clear mitigation plan that answers questions like:
- What leading indicators will we track to know if the risk is getting worse?
- What specific actions will we take to reduce the likelihood of the risk occurring?
- If the risk does happen, how will we minimize the damage and get back on track?
- Who is responsible and accountable for executing the plan?
For example, here‘s what a risk mitigation plan might look like for a top account at risk of churn:
| Risk | Leading Indicators | Preventative Actions | Contingent Actions | Owner |
|---|---|---|---|---|
| Losing top account worth $1M annually |
|
|
|
Jane Smith, Account Director |
The best risk mitigation plans are documented in clear, actionable playbooks that give teams a step-by-step roadmap to follow. They‘re simple, specific, and easy to implement in the heat of the moment.
According to research by Vantage Partners, organizations that consistently use sales playbooks grow revenue up to 18% faster than those that don‘t. But the key is keeping playbooks focused on the vital few actions that matter most. "If your playbook has 75 things to do in a given situation, reps will do none of them," warns sales consultant Michelle Richardson. "Keep it short, sweet and easy to remember."
4. Use analytics and AI to predict and prevent risks
In 2024, gut feel and spreadsheets are no longer sufficient for sales risk management. Winning teams harness the power of analytics and artificial intelligence (AI) to predict and prevent risks before they happen.
Predictive analytics uses historical data, machine learning, and statistical algorithms to identify patterns and forecast future outcomes. This allows sales leaders to spot leading risk indicators, such as:
- A sudden drop in email engagement for an in-progress deal
- Increase in time between key sales activities like demos or proposals
- Competitor mentions spiking in sales call transcripts
By proactively monitoring these predictive metrics, you can intervene early and often to get deals and relationships back on track. One study by Forrester found that organizations using predictive analytics in sales experience 2.3x higher revenue growth rates.
But analytics alone still relies on humans to interpret the insights and take action. That‘s where AI comes in. By 2024, Gartner predicts that 60% of B2B sales organizations will transition from experience- and intuition-based selling to data-driven selling.
AI takes predictive capabilities to the next level by continuously analyzing vast amounts of structured and unstructured data (e.g. emails, call recordings, notes) to surface risks that may be invisible to the human eye. For example:
- Conversational intelligence tools that analyze sales calls to identify at-risk deals based on topics, sentiment and rep behavior
- Relationship intelligence tools that spot changes in buyer/champion engagement and suggest next-best outreach actions
- Predictive forecasting tools that scour CRM data to flag deals likely to slip based on historical patterns
When AI and predictive analytics are used together, the impact can be game-changing. According to Accenture, sales organizations that apply AI to their risk management see 76% more leads, 22% higher win rates and 15% less time spent on manual data entry.
Of course, AI and analytics are not a silver bullet. As sales engagement expert Darryl Praill puts it, "AI won‘t magically fix bad sales practices, but it will make good sales teams great. The key is using it to augment human judgment, not replace it entirely."
5. Build a risk-aware culture and mindset
Managing sales risk is not just about having the right process and technology. It‘s also about fostering a culture and mindset that embraces risk awareness as a core value. In toxic sales cultures, risks are swept under the rug or treated as a sign of weakness. Reps are afraid to speak up about potential problems for fear of looking bad or losing a deal.
In contrast, winning sales cultures make it safe and normal to talk about risks out in the open. Leaders model vulnerability and transparency, encouraging reps to raise red flags early and often. Risks are framed as opportunities to learn and improve, not threats to be avoided at all costs.
For example, sales engagement platform Outreach.io runs a weekly "deal autopsy" in which the team does a post-mortem on key deals that were lost or pushed. "The goal isn‘t to shame anyone, but to understand what we could have done differently," says CEO Manny Medina. "We celebrate the learning, not just the winning."
This mindset shift starts at the top, but it also requires ongoing training and reinforcement. Winning sales teams build risk management concepts and exercises into onboarding, sales kickoffs, and regular team meetings. They recognize and reward reps who proactively identify and mitigate risks, not just those who close the most deals.
According to the Sales Management Association, a strong coaching culture is the #1 driver of sales performance, but fewer than half of organizations do it well. Making risk management a core coaching topic is one powerful way to ingrain it into the cultural fabric.
6. Partner across functions to align on risks
Finally, high-performing sales teams recognize that they can‘t manage risks in a vacuum. Effective risk management requires close collaboration and alignment with other key functions such as marketing, customer success, product, finance, and legal.
Some examples of how cross-functional alignment helps identify and mitigate sales risks:
- Partnering with marketing to track competitor moves and develop counter-messaging
- Working with customer success to spot early churn warning signs and coordinate outreach
- Collaborating with product to influence roadmap priorities based on deal risks
- Strategizing with finance and legal on creative deal structures to mitigate pricing risks
The most effective sales organizations have regular cross-functional "risk roundtables" to share intel, align on priorities and coordinate actions. They use joint KPIs and shared dashboards to stay on the same page. And they leverage AI-powered tools to democratize risk insights across the revenue engine.
One powerful example is sales and marketing signals platform 6sense, which uses AI to unify data and surface account-level risks for sales and marketing to jointly act on. "Instead of manually cobbling together insights from a dozen tools and team-specific views, 6sense gives us a single pane of glass to align GTM actions against the biggest risks and opportunities," says CMO Latane Conant.
Bringing it all together
Mastering sales risk management is no longer a nice-to-have – it‘s a must-have capability for winning sales teams in 2024 and beyond. But it requires fundamentally rethinking old assumptions and embracing new ways of working:
- From annual planning to continuous risk assessment
- From gut feeling to data-driven risk quantification
- From reactive firefighting to proactive risk mitigation
- From siloed efforts to cross-functional orchestration
Is it easy? No. But the payoff is undeniable. According to McKinsey, organizations that excel at risk management grow their revenues 1.5x faster and their profits 2.6x faster during downturns than those that don‘t.
Ultimately, sales risk management is about creating stability in an unstable world. It‘s about making the unpredictable more predictable through the power of process, technology and culture. And while you can never eliminate risk entirely, you can absolutely shape your own fate.
As sales visionary Mark Roberge puts it, "The best sales leaders are risk managers first and revenue drivers second. They obsess not just with hitting the number, but how that number will be hit quarter after quarter, year after year. Mastering the art and science of risk management is their ultimate competitive advantage."
