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Why is Scarcity such a Motivator?

The Influence People Blog — Mon, 25 Jan 2016 22:30:00 +0000

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.

Brian Ahearn, CMCT®
Chief Influence Officer

influencePEOPLE
Helping You Learn to Hear “Yes”.

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Ironing out the Buying Thought Process

The Influence People Blog — Mon, 02 Nov 2015 22:30:00 +0000

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.

Brian Ahearn, CMCT®
Chief Influence Officer

influencePEOPLE

Helping You Learn to Hear “Yes”.

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Will the Price of Cubans Rise or Fall?

The Influence People Blog — Mon, 28 Sep 2015 21:30:00 +0000

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:

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.

Brian Ahearn, CMCT®
Chief Influence Officer

influencePEOPLE
Helping You Learn to Hear “Yes”.

The post Will the Price of Cubans Rise or Fall? appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Referrals

The Influence People Blog — Mon, 20 Apr 2015 21:30:00 +0000

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 post The Psychology of the Sales Cycle – Referrals appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Closing

The Influence People Blog — Mon, 13 Apr 2015 21:30:00 +0000

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 post The Psychology of the Sales Cycle – Closing appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Negotiations

The Influence People Blog — Mon, 30 Mar 2015 21:30:00 +0000

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”.

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The Psychology of the Sales Cycle – Objections

The Influence People Blog — Mon, 23 Mar 2015 21:30:00 +0000

“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”.

The post The Psychology of the Sales Cycle – Objections appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Presentation

The Influence People Blog — Mon, 16 Mar 2015 21:30:00 +0000

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:

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.”
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

influencePEOPLE
Helping You Learn to Hear “Yes”.

The post The Psychology of the Sales Cycle – Presentation appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Qualification

The Influence People Blog — Mon, 09 Mar 2015 21:30:00 +0000

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:

They allow the prospect to feel in control of the situation.
They help you gather information so you can understand the prospect’s needs.
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.
They help you tailor your presentation or demonstration.
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

influencePEOPLE
Helping You Learn to Hear “Yes”.

The post The Psychology of the Sales Cycle – Qualification appeared first on Social Engineering Blogs.

The Psychology of the Sales Cycle – Initial Meeting

The Influence People Blog — Mon, 23 Feb 2015 22:30:00 +0000

Congratulations! Your prospecting efforts have paid off and you’ve set up your first meeting with the prospective client. Now comes the fun part because you’re going to start building relationships, selling and enjoying success.

First impressions matter and your initial contact will determine whether or not you go any further for several reasons:

Judging the book by its cover. Growing up we were told never to judge a book by its cover, but we do. Sometimes we do it consciously and sometimes it’s subconscious, but we all do it. Your prospect will do it too so leave nothing to chance. How you dress, act and prepare can make all the difference for that initial impression which happens in less than 30 seconds.
Do they want to do business? As you talk, beyond the initial judgment we just touched on, the prospect will be assessing many things as he/she decides whether or not to go forward.
Do you want to do business? The prospect isn’t the only one making a decision. Not every prospect is a potential fit for you and you should be assessing whether or not this is an individual or company you can, or want, to do business with.

There are two chief aims of this meeting: build rapport and ask enough questions to assess whether or not you can, or even want to, do business with this potential client.

Sales trainer and author Jeffrey Gitomer is fond of saying, “All things being equal, people prefer to do business with their friends. All things being not so equal, people still prefer to do business with their friends.” This goes to the heart of the principle of liking, which says people prefer to say, “Yes” to those they know and like.

Here’s a great example – ladies’ home parties. Whenever I ask an audience how many ladies have been to Tupperware, Mary Kay or Pampered Chef parties, nearly every female’s hand goes up. I can also tell by their reactions they don’t particularly want to go to those parties so I ask why they go. Inevitably they say, “Because a friend invited me.” They’d have no problem saying “No” to a stranger but when it’s a friend it’s hard to say “No.”

The more you put someone at ease, the more you offer genuine compliments and the more you connect over what you have in common, the more the other person will come to like you. But wait, there’s more! As you employ this strategy you will come to like them too and when they sense you really like them everything changes!

Another way to build rapport is to engage the principle of reciprocity. The reason this builds rapport is twofold. People feel positively towards those who give to them. Secondly, if what you give or share benefits them in some way they feel more positive towards and more indebted to return the favor. That’s effective use of this powerful principle of influence.

Here’s an example. Someone who went through one of my Principles of Persuasion Workshops gave his copy of Influence Science and Practice to a client’s son who was just starting out in business. He was amazed at the look on both of their faces and knew what he’d just done was appreciated and would make a difference in their relationship going forward.

Knowing what to give and what you can connect on or compliment requires some up front leg work. Doing a little research online and talking with people who know the prospect shouldn’t take much time and might be a goldmine of ideas on how to leverage both liking and reciprocity. Again, one major goal of the meeting is to have the opportunity to go to the next step in the sales process so building rapport is a must.

Next time we’ll look at the qualification process where you really begin to understand the prospect, his/her business and needs. Two principles of influence are especially helpful in this phase of the sales cycle.

Brian Ahearn, CMCT®
Chief Influence Officer

influencePEOPLE
Helping You Learn to Hear “Yes”.

The post The Psychology of the Sales Cycle – Initial Meeting appeared first on Social Engineering Blogs.