Monday, March 23, 2015

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
Helping You Learn to Hear “Yes”.

Monday, March 16, 2015

The Psychology of the Sales Cycle – Presentation

You’ve made it through your first meeting and perhaps subsequent meetings with the prospect. These meetings were designed for you to build rapport, learn what the prospect needs and what it will take to land his/her business. Now comes the big day; your opportunity to present.

Just for clarification; I use the term “present” when you’re sharing intangibles such as insurance, accounting and other services. When you have a tangible product where you show how it works or involve the prospect, I call that a demonstration. Either way, it’s your chance to build compelling reasons why the prospect should choose to do business with you and your company. Here are a few things to keep in mind: 
  1. Don’t talk yourself out of the sale – You might have 10 items to cover but if you sense prospects are satisfied after hearing their top three issues addressed, cut it short and ask if they’d like to get to the paperwork. Poor salespeople have a tendency to talk themselves out of the sale during this part of the sales cycle. Here’s a visual from the movie Jerry McGuire, when Tom Cruise made a long speech to Renee Zellweger asking her to marry him and she said, “You had me at hello.”
  2. Involve the prospect – If possible have the prospect handle your product as you demonstrate it. If not, make sure you ask plenty of questions to keep the prospect mentally involved. What you don’t want to do is drone on and on in a monologue because the prospect will tune you out. 

The two principles of influence you want to focus on during this phase are consistency and scarcity. Both of these principles are great when it comes to motivating people to action. Let’s take a look at why.

The principle of consistency alerts us to this reality; we feel internal psychological pressure and external social pressure to be consistent in what we say and what we do. This is why it’s so important to ask the right questions during your initial meetings. Perhaps the most important question is something like this: Exactly what will it take for me to earn your business?

This is not only important because of consistency but also because you might learn some things that you know you can’t come through on. If that’s the case, let the prospect know you won’t be able to help them and move on to another prospect where you might be able to help.

Scarcity highlights the human tendency to want things more when we believe they are rare, going away or can’t be gotten elsewhere. Throughout your presentation you need to highlight aspects of your product or service that are unique to you or your company. Maybe there’s not one thing that’s unique but perhaps there are several features that, when combined, make your product or service unlike any other.

This is important – it’s not enough to talk about what you think is unique. You need to frame it in such a way that prospects realizes that by not going with you they lose something; i.e., that uniqueness that you offer. Six months to a year down the road why might prospects regret not having gone with your recommendation? That’s what will give them pause to think long and hard about what you're offering. 

It’s not often a sale is made without resistance. Objections might come after your presentation or they could be peppered throughout. Next week we’ll cover how to effectively use different principles of influence to handle objections.

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

Monday, March 9, 2015

The Psychology of the Sales Cycle – Qualification

You made it through the first meeting with the prospect, rapport was established and he/she liked you enough to allow you to come back and continue the sales process. And you enjoyed the prospect enough to want to pursue the business. Now it’s time to determine if you can do business with the prospect. By that I mean, after you do your fact finding, you have to honestly assess whether or not what you have to offer can help him/her.

On the flip side, you also want to figure out whether or not you want to pursue the prospect any further because not all business is good business. If you get sense that prospects’ demands will be more than you want to take on, or if you begin to get the feeling you might not like working with them, this is the time to politely back out of the process. Better to not take on a customer than to have to end up “firing” him/her.

As you qualify the prospect through a series of well-planned questions the principle of consistency becomes very important. During the follow up meetings after the initial contact, you want to ask LOTS of questions. A rule of thumb is that a good salesperson should talk no more than 25%-30% of the time. That might be contrary to what you’ve experienced with salespeople in the past because a misperception about salespeople is they have to have “the gift of gab” to talk people into anything. Nothing could be further from the truth! Excellent salespeople talk so little because they ask good questions that allow the prospect to do most of the talking. Excellent salespeople are also good listeners because it doesn’t do any good to ask the right questions if they don’t care about the answers.

Here are some benefits of asking good questions: 
  1. They allow the prospect to feel in control of the situation.
  2. They help you gather information so you can understand the prospect’s needs.
  3. They will let you know whether or not you should go forward. If you can’t meet the prospect’s needs or requirements then be honest, remove yourself from the sales process and go work with prospects you can help.
  4. They help you tailor your presentation or demonstration.
  5. You will be able to tie back what you ultimately propose to what the prospect told you in earlier meetings. This is where consistency becomes a powerful principle to leverage the sale.  

One more point about questions. Whether you win or lose an account, you should always try to understand why. Replicate your winning behaviors and change whatever led to you not making the sale. When you lose, you need to see if there’s a question or two you can add to your qualification process to avoid that from happening again. For example, if you find out the prospect’s brother-in-law works for the company the prospect is currently doing business with then add a question in your qualification process to uncover that next time. Refining your questions over time will make you more efficient and successful.

Last, consider scarcity as you go through the qualification phase. People naturally want more of what they don’t have, can’t have or perceive as going away. By asking the right questions you can start to highlight what prospects might be missing currently and they’ll want it more. An example from insurance might be the following: 
Agent – “If you’re like most customers I work with you probably want to make sure your building is fully covered in the event of a total loss, correct?” 
Prospect – “Of course. I can’t get stuck paying tens of thousands of dollars out of pocket if the building burns or a tornado takes it down. That’s why I buy insurance.” 
Agent – “How about your employees? If your business was shut down for six months or longer would you want them to come back when you reopen? 
Prospect – “Sure. Without them I have no business.” 
Agent – “I thought so but right now you don’t have business income coverage. If you can’t pay them while the rebuilding is going on they’ll end up looking for other jobs so they can pay their bills and feed their families. Should I include this coverage in your quote?” 
Prospect – “I never thought about that. I couldn’t afford to hire new people, retrain them and do all the other stuff you have to do with new employees. Yea, include it so we can see what it will cost.”
Tom Hopkins, a well-know sales trainer and author regularly tells audiences, “If you say it, they doubt it. When they say it, they believe it.” Telling prospects what they need is never as effective as them seeing the need themselves and verbalizing it. This comes about more easily when you know you product or service and ask the right questions.

Next week we’ll delve into the presentation or demonstration with a prospect looking to leverage certain principles of influence that will help that go smoothly.

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

Monday, March 2, 2015

Influencers from Around the World – Consensus + Scarcity = FAIL!

This month, our Influencers from Around the World guest post comes from Anthony McLean, a long-time contributor to Influence PEOPLE. Anthony is Australia’s one and only Cialdini Method Certified Trainer (CMCT®). He started the Social Consulting Group where he teaches people and organizations the principles of influence. Reach out to Anthony on LinkedIn and Twitter to learn more from him.

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

Consensus + Scarcity = FAIL

Recently I have noticed a very interesting phenomenon. Consensus is failing to have the impact it is intended to have. In our time,  the cues to guide our behaviour are more prevalent and appreciated than ever before. For example, when I land on an online shopping page, the reviews, ratings, and testimonials provide me with vitally important information such as others like me have been here before; this vendor can be trusted; the products are as they are described; and so on.  In the traditional sense it is these cues that help me overcome my uncertainty and help me make a decision. 
Therefore when I am not sure of what I should do, I look to the actions of others; especially in unknown and untested situations. And not just any others, I look to those most like me to guide my behaviour. 

Rest assured my friends, Consensus is truly a principle that, when used well, saves time, promotes sales, and builds communities. It’s a cracker (Australian for really good, awesome, etc.)!

What then, I hear you say, does the title of this post mean? Let me tell you, but first let me pose a mystery. Why would a leading publically listed company make a wrongheaded decision and turn away from the actions of others?

In the delivery of the Principles of Persuasion Workshops, my keynotes and in my consulting and coaching, I continually stress to my audience that not all testimonials are same. We know that by distilling the testimonial data, drilling into the case studies, and sharing what people most like you are doing now or have done in the past, will have a great impact on your “persuadee’s” behaviour.

However, recently I have been working in a space in which the products on offer between companies are very similar. Many industries have been through a phase in which they have competed on price. However to cut prices they must cut margin and then services and ultimately their perceived value. Those industries then got to a point where price was no longer a determining factor. While they could have continued to compete on price, at some point there needed to be platform based on value, relationships, and/or loyalty. The change had to come because buying customers through discounts was bringing about the wrong type of relationship, where every dollar was held tightly. Dishonesty between provider and customer was rife because of the perception that every dollar mattered and after all it was just a transactional relationship; those who got or saved the most money won!

It is at this point a nuance of Consensus kicks in; the suppliers are all in the same industry, they offer similar products, they compete for the same customers, staff and leaders, but they do not see themselves as the same as each other. How do I know? 

If you present to an organization evidence of what others in the industry are doing, rather than move toward your ideas, they immediately repel, back away and dismiss what others in their industry are doing. Showing them what many others in their industry are doing, creates a drive in initiative to be different and cut a new path, one less travelled, in an effort to attract disgruntled and disenfranchised customers looking to leave their current provider in search of something better. The competition is so great in this industry that the drive to be unique, to be something truly valuable, outweighs the power of Consensus.

Now I am not saying Consensus will not work in this industry – quite the contrary. However, , Consensus can fail to influence behaviour because of Scarcity – if the competition is doing it we must do something different and  be seen as unique. We must have a clear USP (Unique Selling Proposition) and can’t be the same because then the consumer will not be able to tell us apart. 

In this instance Scarcity was trumping Consensus.

So what are you to do? Firstly don’t get caught up in labels and demographics. Just because Company A and Company B are in the same industry they may not see themselves as the same. Therefore ask the decision makers you are seeking to influence about their values, their vision and whom they think across the business world is most like them.  Then start to research, dig into those companies that your persuadee sees themselves like and show them what those companies are doing in similar situations. 

Therefore why did a publically listed company turn away from the crowd and make a decision that seemed at odds with their industry? Because they did not see themselves as the same as others in their industry. They were different. They were unique. They were competitors. Therefore they would do things differently, cut new directions and be innovative – they wanted to be Apple. So we showed them what Apple did and low and behold they sat up and took notice. 

By the way they were not in the same league as Apple but it didn’t matter – in their eyes – they were, so that’s what we showed them to change their thinking.

Anthony McLean, CMCT®