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What the FOMO are You Doing?

Last month I was in Arizona where I had the good fortune to combine business and pleasure. Pleasure was seeing family and attending an excellent Scotch tasting event at Total Wine. Business was a keynote presentation, sales calls with a good friend and coworker Dan and a trip to Flagstaff. One afternoon Dan and I stopped by Total Wine and during check out the person in front of us began telling us about a bourbon the store had just gotten in, Weller 12 year. He proceeded to tell us it was from the same distributor as Pappy Van Winkle, a rare and expensive bourbon. He let us know the store didn’t have many bottles and they’d probably sell out within the hour. Fear of missing out (FOMO) was enough for Dan to grab a bottle…even though he’s not much of a bourbon guy.

Dan’s decision to buy was heavily influenced by the principle of scarcity. This psychological concept alerts us to the reality that we value things more when we believe they’re rare or diminishing. FOMO is another way to describe scarcity. Most people hate missing out on what might be golden opportunities. If you think back on life most of what you regret probably centers around what you didn’t do (missed out on) rather than what you actually did.

Even though Dan isn’t much of a bourbon drinker, knowing Pappy Van Winkle has an excellent reputation and finding out this particular bottle would probably fly off the shelves was enough for him to make an unusual decision. Had that customer not mentioned how seldom the store got that specific bourbon and how fast it would sell I’m positive Dan wouldn’t have bought a bottle.

FOMO is constantly at work when it comes to sales.

  • Coupons that are about to expire get used more than those that still have time to use them. We may procrastinate but don’t want to miss out on that potentially great deal so we take action before opportunity passes!
  • The last day of a big sale gets us into the store even if we don’t have something in particular we’re looking for. You tell yourself you just want to see what deals are going on but once you’re in the store you’re far more likely to buy than if you don’t go at all.
  • Black Friday will be here before you know it and people will stand in line all night just so they don’t miss out on some of the best deals of the year.

Responding to FOMO isn’t all bad. After all, saving hundreds, or possibly thousands of dollars on something you’ve wanted for quite some time (new computer, flat screen television, a car) feels good and can be a prudent decision. Where you need to be careful is when you’re only responding to the deal but not necessarily a need. For example, many people are buying 4K televisions right now even though they don’t need them. Why? Because the prices have dropped recently and the deals seem too good to pass up. But remember, there will be another FOMO deal once the one you’re considering has passed.

Sure, not getting in on Apple or Amazon stock when they were first issued left a lot of people with regret. Perhaps that first love that got away gnaws at you because you think, “What if?” But keep in mind, as we enter the holiday shopping season the deals that will tempt you will be there during the after-Christmas sales, President’s Day sales and all the other traditional selling holidays. Make sure you’re responding not only to FOMO but what you really need and you’ll be a little happier in the long run.

Brian Ahearn, CMCT®, is the Chief Influence Officer at InfluencePEOPLE. His Lynda.com course, Persuasive Selling, has been view more than 100,000 times! Have you seen it yet? It will teach you how to ethically engage the psychology of persuasion throughout the sales process.

The Greatest Salesman Who Ever Lived

I boldly proclaim Santa Claus to be the greatest salesman who ever lived! Why do I assert that Santa is the ultimate salesman? To start, he has a couple of success stories most of us can’t compete with. First, he’s successfully run the same family business for hundreds of years. There’s something to be said for stability, especially in today’s economy. Second, Santa can boast a client base that expands every year — no matter the state of the global economy. Can you or your business make those two claims?

But those aren’t the reasons I believe Santa is the greatest salesman who ever lived. Contrary to what you might think, his success doesn’t come from his business savvy. After all, consider the obstacles he has to overcome.

  • Business attire: Santa obviously doesn’t buy into the “dress for success” business attire philosophy. Power suits are fine but a red suit and hat, both lined with fur, is a little over the top in today’s business environment. Now if he were in Hollywood…
  • Delivery system: Santa’s remains way behind the times here. His “One Day Delivery” is literally that – you get your packages one day a year. He doesn’t seem to notice in today’s economy people want what they want, when they want it, and that usually means now. But the real problem behind “One Day Delivery” might just be his delivery method. I think you’d agree the U.S. Postal Service, FedEx or UPS would be much more efficient than eight tiny reindeer pulling a small sleigh.
  • Manufacturing: Some say Santa’s operation is too labor-intensive to survive much longer. After all, he’s competing with Wal-Mart, Amazon, Apple and other giant companies. In today’s marketplace, how can any business can get by without automating? Perhaps if he automated a process or two he’d have enough inventory to open this store more than one day a year.
  • Efficiency: I realize Santa gives his product away for free but that doesn’t mean it costs him nothing. He has all those elves and reindeer to take care of. Food and lodging are bad enough but health care costs have to be crushing his profit margin! And what about worker’s compensation costs? If he automated at least he’d save a little money and might be able to take Mrs. Claus on a nice vacation – somewhere warm for a change!
  • Branding: All companies change their branding to fit the times and Santa might want to consider doing the same. After all, “Ho, Ho, Ho, Merry Christmas!” has gotten a bit old and stale.
  • Orders: I think Santa could fill orders much faster if only he’d just set up a website. And how about replacing all those last minute letters with email, text, instant messaging or a Twitter account? It has to be painfully slow for him to read all those handwritten letters.

So, all this begs the question, “Why is Santa so successful…in spite of himself?” In business if you continually land new customers and retain the old ones then you’re doing something right. Here are six reasons Santa continually attracts new customers and retains all his current ones:

  • He loves his job! Could you do the same job day after day, year after year for most of your life? Could you do it and remain so upbeat and jolly? Perhaps, “Ho, Ho, Ho,” is his corporate culture and not just some slick branding slogan.
  • He genuinely cares for his customers. His goal is to meet everyone’s needs and all he hopes for in return is to see joy on their faces. Do you get joy from serving others?
  • He gets to the personal side of selling. Granted he’s not always accessible but he doesn’t expect clients to come to him. When he’s at his absolute busiest, with his deadline approaching and delivery date nearing, he can be seen everywhere talking with his customers. How he can be in so many places at one time I’ll never know. How often do you initiate contact with your customers, even when it’s inconvenient for you?
  • He creates atmosphere. A toy is just a toy, except when it’s from Santa. Because it only comes once a year and will be found under the tree on Christmas morning it creates anticipation and builds excitement! That’s so much better than getting something online or from some mail order catalog. Do you create an experience for your customers?
  • He adds value. When people hear the word “free” they often think “cheap” or wonder, “What’s the catch?” Even though Santa gives his products away we love what he gives us mostly because it comes from him. Don’t you have a few things you prize because of the person who gave it to you? That’s your change to add value. Do your customers see you adding value?
  • He delivers on his promise. Santa does what he says and always delivers, at no extra charge, on time! Can your customer count on you to be that consistent?

So there you have it, six reasons behind the success of jolly old St. Nick. Yes, I stand firm on the assertion that Santa Claus is the ultimate salesman! Did you notice that everything Santa does is within your power to do with your customers? That’s right, there’s no reason you can’t do the same things Santa does. And here’s some welcome news for most of you – you don’t have to wear a silly red uniform while you do those things!

I hope you enjoyed this post and that you and your loved ones have a very Merry Christmas and Happy New Year!

Would You Stop at the Store on Your Way Home?

What’s the most powerful principle of influence when it comes to sales? That’s a typical question I get from salespeople who attend my sales training or keynote presentations. While the situation usually dictates which principle to use, I believe the principle of consistency is perhaps the most powerful principle of influence when it comes to making a sale.

Why do I believe this? Because good salespeople talk way less than their prospective customers. Shocker! Having studied sales for more than 20 years and reading countless books, magazines and blogs, I can tell you the conventional wisdom is good sales people talk only 25%-30% of the time.

That wisdom might go against your experience as a consumer but I would venture to guess the salesperson you’re thinking of who droned on and on and on was not a “good” salesperson. Quite the contrary, they were probably average at best and more likely downright bad!

The principle of consistency tells us people feel internal psychological pressure as well as external social pressure to be consistent in what they say and do. This is so because we feel good about ourselves when we do what we say and others view us positively when we live up to our word. That’s powerful motivation from within and without!

How does consistency come into play for a salesperson? Good salespeople recognize this principle and learn to ask the right questions in order to find out what customers need and want. They also use questions to highlight their offering in a way that aligns with what customers say they’re looking for. In the principles of persuasion workshop, I share with participants this wisdom, “People don’t resist their own values.”

Let me paint a picture: Imagine your spouse, significant other or someone else asking, “Would you stop at the store on the way home to get…?” If the store is a good bit out of your way, perhaps taking an extra 30 minutes, you might hesitate to say yes because that’s somewhat inconvenient. However, if the store is right on the route you normally take to get home it’s probably no problem at all to make a quick stop.

That word picture applies to your questions. When you ask the right questions early on and then clearly show the potential client that what you’re offering lines up with what they said they want and need, getting to “Yes” is pretty darn easy. But, if you don’t ask good questions you’ll have to work harder to talk them into what you’re offering. That’s where people feel “sold” and as author and sales trainer Jeffrey Gitomer says, “People don’t like to be sold but they love to buy.”

So make the buying experience easy for people and yourself. Know your product, your competition and most importantly, know the right questions to ask your prospective customers. Do this and your sales are sure to increase.

Why is Scarcity such a Motivator?

We’ve just come through the holiday season and retail sales were up about 8% from a year ago according to MasterCard. It’s probably not a stretch for me to assume that all of you reading this took part in holiday shopping if for no other reason than to take advantage of the great sales that were so prevalent.

There is something about a sale that grabs our attention and there are two primary reasons we love to take advantage of the opportunities retailers present. Contrary to what you might think, it’s more than just saving a little cash.

First, we hate the thought of losing. That’s the principle of scarcity at work on us. We’ve become so conditioned by sales that we know when we don’t buy something on sale we’ve most likely overpaid; i.e., lost money. Amos Tversky and Daniel Kahneman’s research shows people feel the pain of loss more than they do the joy of gain. In fact, most people experience the pain of loss anywhere from 2.0-2.5 times more than the joy of gaining the same thing. In other words, as much as we like saving $100 we hate the thought of losing $100 much more. Again, not taking advantage of a sale equates to losing.

However, as much as we like a sale we do know there are plenty throughout the year so what’s a retailer to do to get us to take action immediately? When you throw in some kind of limit our desire for the sale item is greatly heightened. Think about it; if there were not a time limit (“Sale ends Sunday”) or limited supplies (“While supplies last”) we wouldn’t be as quick to take advantage of the bargains. After all, it’s also quite natural for many people to procrastinate.

But why is scarcity such a motivator?
According to Robert Cialdini’s best selling book Influence Science and Practice, it has to do with how we’re wired, i.e., our evolution as a species.

“One prominent theory accounts for the primacy of loss over gain in evolutionary terms. If one has enough to survive, an increase in resources will be helpful but a decrease in those same resources could be fatal. Consequently, it would be adaptive to be especially sensitive to the possibility of loss.” (Haselton & Nettle, 2006)

While some things may be changing rapidly (human knowledge is doubling every 12 months), human beings evolve slowly, very slowly. Most people probably don’t live in life and death situations like humans did thousands of years ago but our brain wiring is essentially the same. So that wiring that was designed to help us survive still exists today, only it’s tapped into in many ways that are not related to survival.

How does this impact you? In two primary ways:

If you’re a consumer make sure you don’t reflexively act on things. While the sale may look too good to pass up do you really think it’s the best sale there has ever been? Do you think it will never come back around again? The answer is most likely no in both cases. So take your time on major purchases and don’t be so quick to jump just because you see something is 30% or 40% off. It’s very likely there will be President’s Day, Memorial Weekend, Fourth of July, and Labor Day sales that are every bit as good if you can be patient.

When you’re a persuader look for legitimate scarcity in your product, service or offer. There may not be one thing that is totally unique but perhaps there is some combination of features or benefits that can’t be gotten elsewhere. Tout the combination to alert people to the uniqueness. And if there happens to be a limit on time or quantity make sure you mention it because it will increase the odds that someone will say yes to you.

In order to be a master when it comes to persuasion always look for the principles of influence that are naturally available. Then use those principles of honesty highlight what you’re talking about. Doing so will significantly increase your odds of getting to yes.

Ironing out the Buying Thought Process

I’ve been on the road a lot lately. In a recent stretch I was gone Monday through Thursday or Friday four weeks in row. When I returned from a recent trip, my wife, Jane, had gone to Myrtle Beach to spend time with her family. I was left with a daunting task: two-dozen shirts to iron!

But there was a problem; our iron was ruined not long ago when I dropped it on the floor. Before I could start ironing I needed to buy a new iron, something I knew nothing about. I’d like to let you in on my thought process as I made the purchase. I don’t think I’m much different than any of you reading this so perhaps it will help you understand why you do what you do when it comes to certain purchasing decisions.

Let’s start with this fact – the vast majority of our decision-making takes place at the subconscious level. Martin Lindstrom, author of Buyology (yes, I spelled it correctly) contends non-conscious forces drive upwards of 85% of our decision-making. People who’ve been in sales for any length of time understand this and that’s why it’s often said, “People buy based on emotion then justify with logic.”

My first decision was where to go to get the iron. I ended up at Target. I guess I could have stopped by Sears, Wal-Mart or some lesser-known stores but I didn’t even consider them because prior experiences at Target have been good, their prices are reasonable and Target is burned into my subconscious more than the other stores because of their advertising.

After asking a clerk where I could find irons I ended up in front of shelving full of irons ranging in price from $12.99 to

$89.99. Immediately I knew I would not spend anywhere close to $12.99 because having some cheap irons in the past and using them at hotels is frustrating. I also knew there was no way I’d pay anywhere near $89.99 for an iron because ironing as little as I do doesn’t necessitate one that would be used in a laundry mat.

As I looked at all the different the models I saw several options from Shark. I’d heard of Shark and seen some commercials and remembered their products seemed unique although I couldn’t recall specifics. Other than glancing at some other brands I really gave all my attention to the Shark models.

As I looked at the Shark irons they did look different than all the others and the price range was reasonable with the low-end model for $29.99 (Lightweight Professional) and the top of the line model for $49.99 (Ultimate Professional). There was one other model for $39.99 (Professional Steam Power).

At this point I did what most discriminating shoppers do – I compared. Did I need 1800 watts, 1600 or 1500? Was the 9.5 inch base, 9.0 or 8.5 best for me? Does it matter that one is 3.6 lbs., 3.3 lbs. or 2.0 lbs.? Decisions, decisions, decision, all of which I knew nothing about.

That led me to one more decision criteria; what do people say about each model? That was easy enough to look up on my phone as I stood in the aisle. Each iron had 4.5 stars, some with more than 100 reviews. I felt comfortable because people just like me (principle of consensus) thought highly of each model so I felt better and better about my potential Shark decision.

With all that going on in my head which model did I buy? I bought the $39.99 model, which is what most people would do. I remember thinking, “Do I really need the top of the line and will those subtle feature differences be worth it?” I also thought, “If I buy the low-end model will I regret it because maybe it turns out a be a little cheap?” The middle seemed to be a safe alternative.

Most companies offer three product models (cars, shoes, bread makers, etc.) exactly because of the thinking I outlined above. Some people will want the top of the line, some will default the cheapest but most people will buy in the middle. If a company removes its high priced model the average sale will drop because some people buy the top of the line but also because more people will shift from the mid-range product down to the lowest priced model. Pay attention next time you’re in a store and see if you begin to notice the three choice offerings.

Although I’m in tune with buying, selling and psychology, I must admit, it was an interesting exercise to really pay attention to what was driving my purchasing decision. I got home and used that iron for three hours as I knocked out all the shirts at once. I must say, I was pleased with my purchase – at least that’s what my mind told me.

 

Will the Price of Cubans Rise or Fall?

There’s a Seinfeld episode in which Kramer orders some Cubans. Jerry thinks he’s ordering cigars but Kramer actually brought three Cuban men over so they could roll cigars for him. He didn’t get cigars because they were illegal.

When America cut ties with Cuba after Fidel Castro took over, it became illegal to do business with Cuba. Whenever something is banned or difficult to get all of a sudden people want the banned or difficult to get things even more. That’s the principle of scarcity at work on the human psyche.

Here are just a few examples.

There was a point in time when you could only get Coors beer west of the Rockies. As a kid I remember my dad and his brothers talking about how good Coors was when they could get it. None of them drinks Coors now.

Yuengling is another example of a beer that was hard to come by, at least in Ohio, until recent years. I recall traveling with a friend who made it a point to stop at a conveience store in West Virginia just to buy a case of Yuengling.

Twinkies started flying off the shelf when it was announced Hostess was discontinuing the cake-filled treat.

Back in 2001, Oldsmobile exceeded it sales goal by a higher percentage than better-known brands such as BMW, Kia, Porsche, and many others, when it was announced the car line was being discontinued.

I’m a Scotch lover and asked an expert at a tasting event his thoughts on aged Scotch (25 years and older). He said he tries a glass but doesn’t buy a bottle because age doesn’t necessarily mean better taste. He said the reason the price is so much higher for aged Scotch is just because there’s less of it.

Why do we naturally feel compelled to take advantage of scarce resources or opportunities? From Influence Science and Practice:

“One prominent theory accounts for the primacy of loss over gain in evolutionary terms. If one has enough to survive, an increase in resources will be helpful but a decrease in those same resources could be fatal. Consequently, it would be adaptive to be especially sensitive to the possibility of loss.” (Haselton & Nettle, 2006)

Now here’s the interesting thing – once something is no longer scarce we don’t want it as much. There’s a good chance we’ll see this play out with Cuban cigars. Now that relations between the U.S. and Cuba have been normalized it’s a sure bet Cuban cigars will be easier to get. In all likelihood there will be a rush to get them when they initially hit the store shelves. However, as they become more commonplace it’s likely people won’t value them as much.

Humans are not always predictable so there’s no guarantee I’m correct in my assessment of what will happen with Cuban cigar prices. Only time will tell. However, given how scarcity works on the human mind and surveying similar scenarios from the past, if I were a betting man I’d bet on a price fall shortly after Cubans – cigars that is – hit the U.S. market.

The Psychology of the Sales Cycle – Referrals

For the most part salespeople don’t have a
great reputation. This is so because many people feel they’ll be pressured into
buying something they don’t want or need by someone who is manipulating them. I
teach sales and don’t always like dealing with salespeople because most of the
time they don’t add value to the transaction. If someone can only tell me what
I can already read on online or find on a label, then they’re not doing me much
good.

Good salespeople add value because they:
  • Ask questions to help uncover a need you might
    not have considered before.
  • Save you the time and effort of having to do
    lots and lots of research on your own.
  • Point out features you might not have known
    about and demonstrate how they’ll be beneficial for you.
  • Can be a “go to” person for you when something
    goes awry.

 

When you interact with someone who really
helps you, it’s natural to want to help him or her in return. That’s the
principle of reciprocity and it will make the client happy to help you by
giving you some referrals.
It’s common for salespeople to ask for
referrals at the close of the sale.
“John, I’m really glad we’re doing business
together. One way my business grows is through referrals. Do you know anyone
else who might be interested in the services I offer?”
Personally I think that’s a terrible approach
because you’ve not done anything yet to deliver on your promise! If the client
doesn’t say no right off the bat it’s likely to be met with a name or two off
the top of their head quickly just to satisfy you.
Here is an approach that combines the
principles of reciprocity and consistency that is sure to get more and better
referrals! You disarm the client by telling them you’re not going to ask for
referrals but would like to ask a favor. Ask if you can talk sometime in the
future about referrals, after they’ve had a chance to see how your product or
service performs. This is where planning comes in because you’re planting a
seed. Here’s what I recommend to insurance agents. I’m sure some variation
might work for you in your business:
“John, I’m really glad we’re doing business
together. At this point in the sales process I know a lot of insurance agents would
ask for referrals but don’t worry, I’m not going to do that. I would like to
ask a favor though. After you’ve had a chance to experience our service, say nine
months to a year from now, if we’ve done what we said we would and you’re happy
with us, could we talk about referrals at that time?”
Humans are funny in many ways and one is our
willingness to put things off into the future that we’d rather not do today. I
guarantee nearly everyone will agree to talk with you in 9-12 months about
referrals.
Now it’s up to you to have an efficient diary
system for following up with clients.
“John, it’s Sue. I’m calling to see how things
are going and if there’s anything you need from me as we approach your renewal
date?”
Towards the end of that conversation try this:
“John, do you remember when we started doing
business together last year? I asked if we could talk about referrals if we’d
lived up to our promises and you were happy. I feel we’ve done that
(reciprocity). Are you happy with the decision you made to move your business
to us?”
Don’t just ask for names and numbers at this
point because the customer will be scrambling. They were not thinking about
referrals when they picked up the phone, so continue in this way:
“I don’t want to take any more of your time
today and I’d like to give you a chance to think about who might appreciate the
kinds of things we’ve done for you. Could we set a time next week to talk for
about 15 minutes?”
You’ve planted the seed for them to really
give this thought and they will because they told you they would. On next
week’s call you’re sure to get the names of people who would be most likely to appreciate
what you have to offer.
This is the final post in this series where
we’ve looked at using particular principles of influence at different points in
the sales cycle. I hope you’ve found the posts enlightening but more
importantly, that you employ what you’ve learned and see your sales soar as a
result!
Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.

The Psychology of the Sales Cycle – Closing

I remember when I was young and single I would
go out with friends and see pretty girls, but rarely had the gumption to go up
and talk to them. The reason was fear of rejection. Nobody likes that feeling
so we do what we can to avoid that possible self-inflicted wound.

In the same way I was afraid to talk to a
pretty girl, salespeople are reluctant to ask for the sale for fear of
rejection. It’s safer for the ego to let the prospect “think it over and get
back to you.” In their uncertainty, prospects do one of two things: 1) take the
safe route and don’t change anything, or 2) go with the salesperson who fearlessly
asked them if they could start on the paperwork.
The number one question salespeople ask during
The Principles of Persuasion Workshop® is, “What’s the best way to close?” My standard response is, “The
best way to close starts the moment you meet prospects for the first time, look
them in the eye and shake their hand.” From that point forward how easy or
difficult closing is depends on what you do. I believe closing the sale should
just be a natural part of the ongoing conversation with a prospect. The best
compliment a salesperson can hear from a client is, “I never felt like I was
being sold.”
Early on in this series I quoted Jeffrey
Gitomer, “All things being equal, people want to do business with their
friends. All things being not so equal, people still want to do business with
their friends.” Tapping into liking early and often will make a big difference
by the time you ask for the business. Always start your contact with a prospect
on a social level bonding over things you have in common and looking for
opportunities to offer genuine compliments.
The more you’ve done for the prospect and the
more you’ve gone out of your way on their behalf, the more likely they are to
look for some way to give back to you. If you’re unable to close the deal for
some reason you might still leverage all you’ve done as a way to get some
referrals because of reciprocity.
People want to know they’re doing business
with an expert because it gives them more confidence in their decision. As you
make your way through the sales process, show yourself to be professional and
someone your prospects can rely on for answers when they need them. In short, tap
into authority.
I believe consistency is the most important
principle to tap into during the closing. Reminding people of what they said is
a powerful motivator of behavior! This is where the upfront close comes in
handy early in the sales cycle. At some point during the initial meeting or
qualification stage you need to find out exactly what it will take for you to
earn the right to do business with the prospect. If you know you can’t meet
their requirements, cut your losses and move on. But, if you believe you can
meet the requirements you might want to say something like this:
“Shirley, from what you’ve shared it sounds
like if we can meet your specifications at the agreed upon price by the
delivery date you mentioned, we’ll be doing business, correct?”
You want the prospect to come back with:
“Correct. Meet those specs at that price by
the delivery date we discussed and you have a deal.”
This is also the time to confirm there are no
other hidden reasons that might crop up to kill the deal:
“Just to be very clear Shirley, are there any
other reasons I’m unaware of that could get in the way of us doing business?”
Again, you want her to confirm what you’re
asking. When it comes time to close you only need to refer back to what you’ve
already agreed on:
“Shirley, great news. We can meet the specs at
the price we discussed and can even deliver a little earlier than you
requested. Can we go ahead and start the paperwork so we can get everything in
motion?”
It would be very hard for Shirley to come back
and say no at this point after you’ve done everything she asked for. Will there
be times when someone backs out? Sure. But, using consistency in an approach
like this will have more people saying yes and will make it much easier and
natural for you to seal the deal.
Last, but not least, is scarcity. Pointing out
what someone might save or gain by going with your proposal will not be as
persuasive as honestly sharing what they stand to lose by not taking the step
you recommend. For example, if you are in financial services, talking about how
much more someone might be able to save for retirement by setting aside an
extra percent of their income will not be as motivating as sharing what they
will lose if they don’t save a little extra.
Ineffective – “Ed, if we can find a way to set
aside just 1% more you’re going to have more than $100,000 extra in the bank by
the time you retire.”
Effective – “Ed, if we can’t find a way to set
aside just 1% more you’re going to lose out on more than $100,000 by the time
you retire.”
Hopefully these examples of weaving the
principles of influence into the sales process will take some of the fear out
of closing. There’s one more post in this series – asking for referrals. Next
week we’ll look at ways to make that happen as naturally as the close, by
effectively working the principles of influence into your sales cycle.
Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.

 

The Psychology of the Sales Cycle – Negotiations

If you’re like the vast majority of people,
when you make a purchase you want to believe you got a good, or great, deal. What’s
your definition of a good deal? The deal is really the value you get from the
transaction and when I talk about value I use the following equation:

V = WIG/P
Value equals What
I Get divided by Price.
There are two simple ways to look at it. If I
can get more of something for the same price, that’s a better value. If I can
get the same amount but pay less, again, that’s a better value.
When it comes to value, getting a good deal,
everyone would like to get more for less. We might not get as much as we want,
or pay as little as we’d like, but believing the old adage – everything is negotiable
– we’ll try our best to get more and/or pay less. And so will your prospects.
Negotiating isn’t simply about lowering your
price or giving away more stuff to make someone happy and close the sale. It’s about
knowing when to deviate from traditional pricing or when to make concessions that
will make both parties better off in the long run. It’s fair to say all the
principles of influence and the contrast phenomenon might come into play as you
negotiate but a few will stand out a little more. 

Liking remains very important because the more
the prospect likes you and really wants to do business with you, the better
your chance of getting to yes as you go through negotiation points. Continue to
remain friendly, bond over things you have in common and offer compliments when
warranted because those simple acts will grease the wheel. One study I
regularly share in my influence workshops clearly shows people put in a
negotiation scenario had a much better chance of avoiding a deadlock if they take
the time to get to know each other on a personal level.

The principle of reciprocity describes the
reality that when you give, quite often people feel they should give in return.
This is very important in negotiations because your act of conceding on some
point might cause the other person to make a concession too and you’re now
closer to agreement. A concession might be sweetening the deal with something
that may not mean much to you but might mean a lot to the prospect. Again, your
act of giving is met with something in return. That’s the basis for bartering.
The key here is to be the first to take the step to the middle.

Consistency allows you to fall back on what
the prospect said earlier in the sales process. If they wanted certain features
and those features have a price tag then the reason for the price being what it
is might be due to their choices. Reminding them of what they said they wanted
is powerful because most people won’t come back with, “I know what I said but
I’ve changed my mind.”
Scarcity is closely aligned with consistency
because you can always offer to remove certain features to get the price more
in line with customers’ expectations or budget. If you recall in the post I
wrote on qualifying the prospect, I shared a conversation between an insurance
agent and prospective customer. The agent shared a little about business income
coverage and the prospect asked to have the price included in the insurance quote.
The new coverage will cause the premium to be higher but could be modified in
some way or removed as a concession if the prospect feels the price is too
high. With a new understanding about the coverage and their exposure, prospects
might just find a way to keep it because no one wants to think about an
exposure they clearly know is not covered.
Contrast is used to help the prospect see what
is being offered is in fact a good deal. If they believe your price is too high
you need to figure out what their comparison point is. Whatever they have
currently might not be a valid comparison point because the features may have
changed. If that’s the case you need to move away from the old price and get
them to see the value in what you’re offering.
For example, how does being $1,000 higher than
a competitor breakdown over the life of a product with a five-year lifespan?
Over five years, there are 260 weeks so your product will cost the prospect
less than $4 a week. Can you show the prospect how your product is worth much
more than the extra $4 a week you’re asking them to pay?
Bottom line – Don’t be offended that the
prospect wants more for less. We’d all love to have a Cadillac but it’s not
reasonable to think we can get it for the price of a Volkswagen, is it? And so
it is quite often in your negotiations during a sale. You need to work with the
prospect to come up with a solution that makes them feel their needs were met
and they got a good deal.

 

Next time we’ll look at the part of the sales
cycle I’ve seen salespeople struggle with the most – closing the sale, i.e., asking
for the business. This doesn’t have to be difficult if you’ve set the
expectations early on. Using the principles of influence effectively can make
closing a natural part of the sales conversation.

Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.

The Psychology of the Sales Cycle – Objections

“Let me think about it” and “Your price is too
high” are two phrases salespeople dread. They’re perhaps the most often cited
objections put out by prospects during the sales cycle. As I noted in closing
last week, it’s not often a sale is made without resistance. Objections might
come after your presentation or they could be peppered throughout. This week
we’ll look at some principles of influence that can be very helpful in overcoming
objections.

Two principles that are particularly useful
are consensus and authority. They’re the ones to focus on because more than any
other principles they help people overcome uncertainty and that’s the root of
most objections. We’ll also touch on the contrast phenomenon because it’s
particularly useful to demonstrate your offering is actually a better deal than
the prospect might believe.
You may have heard the old saying, “The devil
you know is better than the devil you don’t.” What that means is, as bad as
things may be sometimes, there’s always the chance they could be worse with
change. That fear of change is always in the back of the prospect’s mind,
especially with big-ticket purchases. Below are a few thoughts prospects may have
as you present. In fact, you may have held some of these very thoughts last
time you bought something expensive.
  • Will it last?
  • Will it perform as advertised?
  • Will it be worth the extra money?
  • Will I regret this decision down the road?
  • Can I really believe the salesperson’s claims?

 

The challenge for the salesperson is to
uncover the real objection. For example, when it comes to, “Let me think about
it,” there may be something underneath that statement. Perhaps the prospect met
with another salesperson and kept their appointment with you only because they
said they would. It’s okay to ask, “What specifically will you be mulling over?
I ask because I might be able to answer some questions for you right now to
make the decision easier for you.” People generally don’t like confrontation so
it’s easier to avoid it by saying, “Let me think it over.”
Let’s start with price. When it comes to price
I tell people, “There’s nothing high or low but comparing makes it so.” If
someone says your price is too high it’s because they are comparing it to
something else. Your challenge is to find out what they’re comparing your price
to and then to reset the comparison point so they’ll see your offer
is actually a better value. The contrast phenomenon comes into play because
what you present first will make the difference in how they perceive the next
item presented.
The principle of consensus, that desire we
have to move with the crowd, can help deal with objections. You never want to
tell someone they’re wrong because that will only produce resistance. A better
approach would be to incorporate consensus through the “feel, felt, found”
approach. An example might go like this:
“I understand how you feel because other
customers have felt the same way initially. However, here’s what they found…”
Then you go on to show them what others discovered. It might be the realization
that a higher price, say 10%, is worth it because the product life is 20%
longer. Getting 20% more product for only 10% more money makes for a better
value!
When we’re in a state of uncertainty making a
decision is a lot easier when an expert tells us what to do. Establishing your
expertise early on in the prospecting phase makes this much easier. That’s
using the principle of authority. You can defer to this casually:
“Ann, as I told you when we first met, I’ve
been doing this for 25 years and I can tell you…”
Maybe you don’t have that much experience or
the credentials just yet in order to be viewed as an expert. You can still
refer to others who are experts and you can share various facts to support your
case.
“Bill, there’s a reason Consumer Reports has
rated this product #1 for the past three years.”
“Sarah, several independent studies show…”
Dealing with objections isn’t something most
salespeople look forward to but there’s good news. First, most of the time
people who throw up objections are engaged in the sales process and that means
you still have a shot at making the sale.
Second, if you’ve been in your role for any
length of time you probably know 80% or more of the objections you’ll face.
That being the case, you should be ready to answer those objections each and
every time. Give thought to the proper responses, utilize the psychology or
persuasion, then drill on the proper responses until they roll off your tongue
in a very natural way.
Even if you successfully handle all the objections
and the prospect clearly wants to do business with you the sale might not be a
foregone conclusion. It’s very likely you’ll find yourself negotiating over
price, terms, conditions or other items related to your product or service. The
next post will look into which principles of influence will help you negotiate
most effectively.
Brian Ahearn, CMCT®
Chief Influence Officer
influencePEOPLE 
Helping You Learn to Hear “Yes”.