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Sales psychology

Sales psychology: How to help customers overcome irrational thinking

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18th Jan 2017
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In a competitive world, salespeople are drawn to the latest thing that might give them advantage. In their second article on the psychology of sales, fellows of the Association of Professional Sales leading business psychologists Lance Mortimer, of Level 3 Communications, and Bryan McCrae, managing director of Sales Motivations, analyse how we can be tricked by irrational thinking.

As humans, we make around 35,000 decisions every day. We may believe we compute the options rationally, and reach the right conclusions. Often, this is true. But beware: we have a built-in system that can hijack our decision-making, and is so instinctive that it fools us into believing we’re right – when we’re not.

Our thinking is naturally parsimonious. We like to get to the answer in the quickest possible way. There is good evidence that we have two internal systems which steer us through life. Brain scanners show these systems can be seen to be working in different parts of the mind. Daniel Kahneman, in his excellent book on decision-making, Thinking, Fast and Slow, suggests the two systems are:

• Powerful system one – fast, intuitive and does most of the driving.
• Logical system two – slower, clever, but a little on the lazy side.

Thinking takes attention, energy and time, so in prehistoric times it usually made sense to use rapid shortcuts to make simpler decisions, such as: ‘Is this dangerous or not?’ The two systems do not always live together in complete harmony. There is often a battle between them for who is driving your decision making. Use the wrong system at the wrong time and we can hit problems.

Champagne moment

To illustrate how these systems work, let’s look at a recent experiment which shows how easily we can be fooled.

Participants were asked to rate the value of a bottle of Champagne. The Champagne was described to them and they were led to believe, rightly, it was a good vintage. Before they named a price, people in the experiment were told to take a ping-pong ball from a bag. What they didn’t know was that all the balls in the bag had the same number, the number 10.

Once they had taken a number 10 from the bag, they were asked if they thought the bottle was worth £10. Some said, yes, it was. Then they were asked how much they would pay for it themselves. Their answers were around £7 or £8. This is because the number 10 had been lodged in their brains and ‘system one’ was using this information to make what it believed was a rational decision.

In the next phase of the experiment, a different set of participants were given a similar test. This time the ping-pong balls had a higher number on them, 65. When asked how much they would pay for the bottle of Champagne, the answers from this group ranged between £40 and £80 – for the same bottle of Champagne – up to 10 times higher than in the first experiment. Logic had gone out of the window.

This suggests that when we can’t make effective decisions, we do not evaluate the choice itself, but are guided, rightly or wrongly, by what we’ve done before. In effect, we are telling ourselves, ‘I have made this decision before; I do not need to go and re-evaluate the situation again. I will bring the past decision to the fore and solve the problem, maybe with a few small modifications’. This is the powerful, intuitive, ‘system one’ taking control, without us even knowing it.

There is a simple test that can be used to check the rational basis for any potential decision. Ask yourself: ‘What is the evidence both for and against the different options available, and how relevant is the evidence in each case?

How much is it worth?

The implications for us all as consumers are huge. How do we know for sure we are getting value for money, especially when there is no defined price tag on the commodity we are being asked about, such as the bottle of Champagne?

That is exactly the dilemma your customers have, when you sit in front of them to talk about your products or solutions. There is often no published price list for your services, nor for your competitors’. How can your customer make a rational decision? The danger is that if your competitor is willing to win at any price, they could easily lodge a low number in the mind of your customer. This will activate ‘system one’ thinking, and fool the customer into believing they are making a rational decision on price which may have to be countered by you.

Our job as sales professionals is to help our customers to engage rational, clever, slower ‘system-two’ thinking, to help them take a step back from the situation and evaluate it in its entirety, from scratch.

Ethically, we owe it to our clients to help them to do this. But how do we set about it?

As we have seen from the Champagne experiment, we tend to make what we believe to be rational decisions, when in fact it is often our fast, intuitive ‘system one’ convincing us that it is our slower, more rational ‘system two’ making the decision.

When we talk to our customers about purchasing from us, we must ensure we are articulating value through our well-honed proposition. This is not to confuse a value proposition with giveaways. Simply adding more product in the belief that this is adding value is a false understanding.

Price vs Value

A solid value proposition will give the customer the opportunity to re-examine their thoughts and belief systems around their current price anchoring. Unless we can challenge the number already lodged in their brain – whether from a previous deal they did, or a number provided to them by your competitor – then we will not be able to ensure our customers are making factual, thoughtful, ‘system-two’ decisions.

There is an effective four-part answer to help sales teams work out the value story for their customers. It taps into the psychology of the buyer and helps them to answer the four big questions they are asking themselves when they sit opposite you.

  1. Why should I buy?
  2. Why should I buy from you?
  3. What is in it for me?
  4. How can I trust you?

Being able to address these concerns in under 60 seconds will help move both of you from system-one, to system-two thinking.

So, let me leave you with two big questions for you to ponder and address:

  1. Don’t you owe it to your customers to help them make the best and right decisions?
  2. How are you managing to articulate your value?

Good luck with your continuing transition and development into being a professional sales person.

Lance Mortimer is a chartered business psychologist and senior talent management consultant at Level 3 Communications

Bryan McCrae is an award-winning sales psychologist and managing director at www.sales-motivations.com

The Association of Professional Sales provides development, standards and leadership to the profession.

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By LinkedIn Group Member
20th Jan 2017 10:59

This comment originally posted on the MyCustomer LinkedIn group by member Matthew Eccles:

As long as sales professionals are incentivised to sell their wares for the best price they can get they'll only use rational arguments when it suits them. If the sale depends on loading the argument expect to see behaviour like price conditioning. That's what the rate card is for.

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