We like to think of ourselves as rational creatures, but how rational are we, really? Somewhat rational, but largely guided by cognitive biases. That’s the conclusion by Professor Daniel Kahneman, one of the leading minds on the workings of the human brain and author of Thinking Fast, and Thinking Slow.
To deal with the infinite complexity of this world, our brains have evolved to rely on mental shortcuts, or biases, to make decisions.
As a consumer, being aware of these biases can save you from a lot of bad purchases. As a sales professional, on the other hand, mastering them can make you much more persuasive – and raise your sales numbers.
Robert Cialdini explained many of these biases in his masterpiece book Influence. We’ll cover some here that you can use for selling, upselling, or cross-selling opportunities.
1. Social Proof
Imagine you’re waiting in a crowd for the traffic light at a pedestrian crossing. One guy jumps out and crosses the street with the red light. But you’re a law abiding citizen, so you don’t follow.
Then another crosses, and another, and then five more. Before you know it, the whole crowd is ignoring the red light. Can you feel that nagging urge to cross the red light as well? That’s social proof in action. Everyone’s doing it, and you feel you should do it as well.
That works fine – most of the time. The other pedestrians proved that the risk of getting fined by police – or hit by a car – was low. But we also make use of these biases when it’s less suitable.
It is used by salesmen, for example, to convince prospects to make a purchase. “This product is used by thousands of customers, so it must be good.”
Try using it next time you’re in a conversation with a potential customer. Subtly mention how many customers already made the choice, how some well-known companies make use of it, and what experts endorse it.
Social proof increases in strength with resemblance. So when you’re talking to an 89-year old granny, use examples from that age group instead of talking about teenagers.
Everyone is familiar with this bias, but still it’s strength is underestimated. “We only do business with people we like” is a popular business maxim, but Daniel Kahneman broke it down to mental workings.
Through various experiments, they found that your brain is more rational and critical when we’re in a negative mood. When we’re in a positive mood, on the other hand, we’re more likely to overlook flaws in reasoning.
In fact, Kahneman explains that the mind produces an emotional response first, and a rationalization second. You like something, and then collect reasons why you like it – although those are not necessarily the real reasons.
So when we don’t like a salesperson, we are much more likely to look and find reasons not to buy. The price is too high, the warranty too low, the color not right.
When we do like the sales person, we are much more likely to miss obvious reasons to stop the sale and rationalize why we should buy. The price seems fair for the quality, it doesn’t need a high warranty, it has a fresh color. Reasoning follows emotion.
Remember that next time you’re working on a sale. Focus on building rapport first, and on presenting the facts second. Getting your customer to like you is a whole other topic. Techniques you could use are:
● Name memorization
● Apple’s Feel, Felt, Found Technique
Check out my post on “20 Customer Service Techniques”, in which I cover all of them.
3. Scarcity Error
In a famous 1975 experiment by Professor Stephen Worchel, participants were asked for a value estimation of cookies in a jar. In one group, the cookie jar was filled to the top. In another, it was almost empty. The group with the full jar gave a much lower value per cookie than the group with the scarcely filled jar.
That’s the scarcity error: our tendency to overvalue what is scarce, and undervalue what is abundant. It is in a way related to social proof, because scarcity of the cookies likely indicates that they are tasty.
It’s a powerful weapon for your sales efforts. Make sure to mention when your products are low in stock, when they are sold rapidly, or when it’s a short term offer. The fear of missing out will kick in, and raise the desire for your product.
4. Hyperbolic Discounting
In The Art of Thinking Clearly, Rolf Dobelli describes an infamous research into this common thinking error. Group A is asked whether they’d rather receive $1,000 in 12 months, or $1,100 in 13 months. Most people opt for the 13-month option; where else would you find a 10% monthly interest rate?
In group B, participants are offered a slightly different choice. Would you rather receive $1,000 today or $1,100 in one month? Most people choose for the $1,000 today. Remarkable. The choice is exactly the same – except that the latter targets your desire to have things now.
That’s hyperbolic discounting at work – our tendency to overvalue that what we can have now versus that what we can have in the future.
You can use this in your customer interactions by stressing the options to get their hands on the product/service faster. Same day delivery, instant access, etc. If you’d like to dig deeper about our craving for now, you can check out my post “Your Customers Are Wired for Instant Support”.
“Scratch my back and I’ll scratch yours”. That basically sums up the concept of reciprocity, but due to its simplicity it is often undervalued as a sales weapon.
According to psychologist and reciprocity expert Robert Cialdini, people have tremendous trouble being in someone’s debt. Even if we don’t like somebody, when that person does us a favor, we feel inclined to return it.
The real insight here is that the payback can be of much greater value than the initial favor. Professor Cialdini describes that, until this practice was largely illegalized, Hare Krishna’s deployed a highly effective method for collecting street donations.
On one corner they would offer pedestrians a flower with a smile. “Please accept this flower, it is our gift to you.” Most would accept the flower out of politeness. But then around the next corner, there’d be another orange-robe flaunting bold head asking for a donation. And it worked like magic! So well, that it was considered a scam and was illegalized in many countries.
Many in sales are fearful of giveaways because they want to minimize costs. But the reciprocity phenomenon shows that doing small favors for prospects can have a serious positive impact on the bottom line. Agree to an extension of a trial, for example, and you might just build up enough goodwill for your customer to end up buying.
This is a popular sales tool that’s also applied in the Yes-set Close technique. In Influence, Professor Cialdini explains that people want to appear consistent. Consistent to the world, but also to themselves.
The Yes-set Close is a technique in which the salesperson asks the customer several questions – minimum three – that have an easy “yes” as an answer. After this comes the real sales question with the desired “yes” answer.
On the one hand, this puts the customer into a ‘yes-flow’, so not all salespeople include questions that relate directly to the sale: “Are you feeling well?” “Was it easy to find us?” “Do you like our shop?”. But the technique becomes much more potent when it’s directed towards closing a sale.
Say you’re in a shop, looking at a pair of expensive Nike-shoes. A salesperson approaches you and the conversation could go like this.
Sales: “Those are some nice shoes you’re looking at. I use them myself. Is running an important hobby for you?”
Customer: “Yes it is.”
Sales: “Do you run multiple times per week?”
Customer: “Yeah, like 3 or 4 times.”
Sales: “OK, then you invest a lot of time in it. And for your shoes, is quality more important for you, or price?”
The salesperson just highlighted how important the hobby was for the customer, so to stay consistent.
Customer “Yes, quality is what I’m looking.”
Sales: “Well then, you’re holding the perfect pair. Not only are they good looking, they also prevent injuries for frequent runners like yourself. Shall I look for a pair in your size?”
Customer: “Yes, that’d be great.”
People will go to great lengths to keep up appearances of consistency. With a bit of smarts, you can use this to your advantage.
Many people in sales make the mistake of focusing on the rational only. But like we covered, emotion comes first, then the rational. Mastering these psychological concepts can boost your sales efforts. And as my colleague covered in his post, they can be used in your website content as well.
Some people are uncomfortable making use of these principles – as it reminds them too much of mind control. But whether you like it or not, when you’re in sales, you’re in the persuasion business.
Everyone is already being as persuasive as they can, and many make use of these principles unconsciously. Like any power, they can be used for good – as well as for bad. If you truly believe in your product, and that it will help your customers, then persuading them to use it is a good thing.