[SDS] Risk at the brothel

[Reading time: 2m 42s]

“If we want a great relationship, we risk heartbreak. If we want to get ahead at work, we have to volunteer for projects that we might fail at. If we avoid risk, our lives won’t move forward.”

-Alison Schrager, An Economist Walks Into a Brothel

Yesterday I wrote about the differences between selling products and services.

The bottom line is that trust must be built throughout the sales process because buying services is inherently difficult. Of course there are things you can do to make buying services a bit easier, but I’ll revisit that later.

For now, let’s take a short trip.

There’s a brothel called The Moonlite BunnyRanch in Nevada. All of the sex workers are contractors who name their own prices, work as much or as little as they want, and give a portion of their earnings to the owner of the establishment.

One of the workers is named Starr. She has three kids, is happily married, and was a successful marketing executive before going all in on sex work. Starr grossed about $600k in a year at the time she was interviewed by author Alison Schrager.

The thing you need to know about sex work is that it’s dangerous. There are the dangers that come along with the sex itself, sure, but there’s also the clientele. There’s the threat of violence, drug use and abuse, and plenty of other bad things too.

The purpose of brothels is to mitigate the risks that come with sex work. The brothel can vet and track clients, provide a safe location, and centralize resources like administrative support. Which brings us back to Starr.

Again a quote from the book:

“How much of her earnings is Starr willing to pay to the brothel for the opportunity to sell sex legally? Ten percent? Twenty-five? I was floored to find out that Starr hands over half of her earnings to the brothel. Why? The main reason is to reduce the risk involved with sex work.”

Let’s turn for a second to Starr’s clientele. Why would they be willing to pay several times more for her services, as opposed to the services of a sex worker on the street? Discretion, safety, privacy, regulation, and quality, to name just a few reasons.

Now let’s turn back to the matter at hand: trust in a services sale.

The buyers of your services need it. The reason they need it, of course, is that services by nature are intangible and somewhat unpredictable.

Your buyers are taking on significant risk when they work with you.

I’ll pause.

Etch that one into your brain.

No matter how strong your brand, or how impressive your laundry list of clients, or how mind-blowing your case studies, your buyers still take on risk. You may disagree. In fact, I’d urge you to get so good at what you do that you honestly think “this should be a no-brainer.” Agreed, it should. That level of confidence should push you to pursue true differentiation and quality.

But it’ll never be an actual no-brainer for your clients, lest you compete on price (and please don’t do that). The equation you see, and the equation your potential client sees, is quite different.

Risk is a big factor in every single buying decision, so the management of risk is a job you’d do well to take on. There are many ways companies approach risk management. Some will be suitable for you, some won’t. But you must do something about it.

Talking up the cumulative years of experience in your firm won’t do it. Plenty of experienced people have screwed things up before.

No matter how predictable, high-performing, or unique your service offering, your clients will shoulder a disproportionate amount of risk in the equation.

What will you do to reduce it for them?

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