Already a Bloomberg.com user?
Sign in with the same account.
By Michelle Nichols Have you ever been in a sales situation where you offered the most logical solution to the customer's problem, yet the order went to someone else? Of course you have! All of us who sell joined that club years ago, and we all know its motto by heart: "When you win, you earn. When you lose, you'd better learn." To understand why the sale that should have been a certainty went weirdly astray, what follows a science lesson that I hope will explain, biologically speaking, the hard-wiring that can lead customers to reject the most logical choices.
First, let me introduce to an emerging field called neuroeconomics, the study of how the brain makes economic decisions. Colin Camerer, George Lowenstein, and Drazen Prelec, three smart guys from Caltech, Carnegie-Mellon University and MIT, respectively, wrote the first major paper on neuroeconomics in February, 2003. (You can read the entire paper in .pdf format by clicking here.)
ADDICTED TO EMOTION. According to the brainiac trio, we humans are programmed to first make emotional decisions, then "thinking" ones. All very interesting, you say, but what does that mean to my next sales call? Here's an example: If a slew of vendors is jockeying for a contract, they can expect the buyer to make a series of emotional decisions to whittle down the list to just a handful. Then, and only then, does logic kick in, as each of the remaining candidates is assessed on the merits of his or her proposal. By the way, this research also helps explain why and how advertising works. The best ads hook customers emotionally, positioning them to make subsequent and rational choices.
The moral of this story: If you don't have, or can't make, an emotional connection to your potential client, don't expect to land the sale, especially when the customer must choose between several vendors, all roughly equal in terms of what each is offering.
Before judging your customer too harshly, however, take a long, hard look in the mirror. Fact is, no matter what we do for a living, a degree of illogical behavior is part and parcel of human nature. Who hasn't gorged on the kids' Halloween candy, and then fretted about gaining weight? We gamble at casinos and relish the thought of winning, yet we also realize that the odds are with the house. Some of us fear flying, even though, statistically speaking, the most dangerous part of the journey is the cab ride to the airport. To paraphrase the comic-strip character, Pogo: We have met the customer, and the customer is us.
THE MIND'S SWITCHBOARD. If you're wondering exactly why emotion is such a powerful force, here's the researchers' explanation. "The wiring of the brain at this point in our evolutionary history is such that connections from the emotional systems to the cognitive systems are stronger than connections from the cognitive systems to the emotional systems." In other words, more information flows from the emotional side to the logical side than vice versa.
When you think about it, our minds must handle millions of inputs and decisions every hour --what to say and do, how to prioritize, the things we must remember. Even the apparently simple act of sitting at a desk is actually quite complicated. We might be planning a project as we type a note about something else, keeping an ear cocked for the phone to ring, and simultaneously filtering out the overheard conversation from the next cubicle. And all while trying not to spill the coffee.
As a result, many of our decisions have to be made at the same time, on auto-pilot. This frees up part of our brain power for the heavy-lifting we call thinking, and which our customers know as "deciding what to buy and from whom."
So, how can you apply neuroeconomics to sales? Here are three suggestions:
Don't overlook or rush the personal connection with your client before launching into your logical sales spiel.
Sell both ways -- emotionally and logically. During the presentation, remember to provide both emotional and logical reasons to back up your proposal.
The next time a customer tells you his or her purchasing decision is based solely on a dispassionate appraisal of the likely return on investment, remember that ain't necessarily so. The emotional component of a customer's ultimate decision will always be present, so don't overlook it.
The philosopher Plato thought of human behavior as a chariot drawn by two horses, Reason and Emotion. Neuroeconomists have updated the metaphor. We now know that Reason is a small pony and Emotion a headstrong Clydesdale. Happy selling! Michelle Nichols is a sales speaker, trainer, and consultant based in Houston, Tex. She welcomes your questions and comments. You can visit her Web site at www.verysavvyselling.biz, where her new CD, 72 Ways to Overcome the Price Objection is available. She can be contacted at Michelle.email@example.com