What can you learn about human nature that can help you close sales faster?
Whether they're salespeople or customers, all humans follow similar thinking patterns that affect their decision-making. Understanding basic psychology can help you read prospects’ behavior, refine your approach based on their signals, and get closer to landing that elusive “yes.”
Here is a list of five theories and biases you must know to improve your sales performance.
5 Important Decision-Making Quirks All Salespeople Must Understand
1) Loss aversion bias
Would you rather pay 75% of sticker price or save 25% on a product? I sure know what I would do -- save 25%.
Why? Humans have a tendency to avoid risks when the outcome is presented as a loss, but are happy to take the same risk when the outcome is framed as a gain. By this logic, saving money is perceived as preferable to spending it -- even though paying 75% of a product’s price and saving 25% come out to the same dollar amount.
You can take advantage of loss aversion bias in your sales pitches by using language that emphasizes the mistakes, costs, and inefficiencies your product will help avoid.
2) Attribution error
We draw conclusions about people based on their behavior. For example, when a sales prospect seems disinterested, it’s our tendency to assume this disinterest is for negative reasons. We assume that they don’t want to hear from us, or that they’re not interested in our product.
However, this a dangerous assumption to make. The fact is that we don’t know why they haven’t gotten back to us – they might very well be caught up in an urgent matter. The next time your prospect does something you don’t understand, avoid acting on assumptions until you’ve gotten to the heart of the matter. In addition, don’t shoot yourself in the foot on prospecting calls by starting conversations with assumption-laden questions like: ”Do you have a moment?” or, “It sounds like you’re busy, how about I call back at a more convenient time?”
3) Confirmation bias
People instinctively pay more attention to information that appears to confirm their assumptions than information that refutes their existing beliefs. As a salesperson, you can make the most of this bias by emphasizing the features or benefits of your product that your prospect finds valuable.
For example, if your prospect’s main challenge is their lack of time, your pitch should be along the lines of, “I talk to so many managers like you that are pressed for time. This feature automates a process that you’re currently makes it very easy to get the job done in just a few clicks, so you can focus on other priorities.”
4) Self-serving bias
A bad workman blames his tools. Sadly, we are all servants of our ego and it is a human tendency to ignore information that challenges our self-esteem. So, if things go wrong, we are naturally inclined to overlook criticism for the sake of our pride. On the other hand, we don’t hesitate to take credit for the times when we are successful. In sales, this bias is most relevant when you’re presenting information that capitalizes on a mistake or flaw in your prospect’s perception or business practice. You should be careful of being too critical or risk the information being ignored, or worse, insulting the potential customer.
5) Belief bias
Belief bias is the tendency to reject outcomes because they sound outrageous, even if they can be logically proven. So it’s important to realize that your customer’s gut reactions will usually influence their decision more than your rational arguments. When you're trying to persuade your customer of something that they find unbelievable, you can only get so far with logic. Therefore, in such situations, you are likely to accomplish more by strengthening your rapport with your prospect and building a relationship based on trust if you want your solution to be taken seriously.
As a salesperson aiming for success, keep these biases in mind the next time you have a client meeting. Download this free whitepaper, ‘How to Sell Persuasively,’ for more strategies and a model to craft persuasive selling pitches.