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Expensive = Good

This refers to the phenomenon where people think something has more value than it actually has just because it costs a lot of money.

 

An experiment has been done where people have been offered wine. The first time the people were told that wine cost $50, the second time that is costs $500.

After tasting the wine, researchers asked the participants what wine tasted better.

 

As you probably can guess, it was the wine for $500.

BUT what the reaserchers didn’t tell the participants was that it was the SAME wine all along. That’s interesting isn’t it?

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The Psychology of the Sales Cycle – Initial Meeting

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”.

Anchoring Effect

This psychological principle called anchoring was discovered by Amos Tversky and Daniel Kahneman. These two researchers found that people tend to make judgements by using relative distances from anchor points.

In their study, participants were asked to compute, the product of the numbers one through eight, either as 1 x 2 x 3 x 4 x 5 x 6 x 7 x 8 or as 8 x 7 x 6 x 5 x 4 x 3 x 2 x 1 within 5 seconds. Because participants did not have enough time to calculate the full answer, they had to make an estimate after their first few multiplications. When the sequence started with small numbers, the median estimate was 512, when the sequence started with the larger numbers, the median estimate was 2 250.

This is used in sales where, say you are buying an expensive suit for $10 000, at the checkout they offer you shoes for $500. You’ll be more inclined to buy those shoes than if you were buying a T-Shirt for $50 instead of a suit because it doesn’t seem that much money in comparison.

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