In this episode of this blog, I will cover cognitive biases, what they are, how to get over them, and most importantly for any sales professional, how to use them to your advantage to make more sales.
Human brains screw us every day. Can you believe it? We are supposed to control our minds but the unfortunate truth is that our minds control us most of the time. We are unconsciously identified to our mind and so we don’t even know when we are slaves to it. The moment we start watching our minds, we start to realize that there is a vast realm of intelligence beyond the thoughts that we have. The beginning of freedom is being aware. Unfortunately for most human beings, this is not an easy thing but fortunately for salespeople, we can leverage cognitive biases to drive our customers to see the value of our products and services.
Cognitive biases are systematic errors in thinking that occur when people are processing and interpreting information around them. Daniel Pink emphasizes in his Masterclass how identifying and understanding cognitive biases is a critical part of creating persuasive frames in sales. I will review his persuasive frames in summary and show you how to leverage them to persuade. These frames are applicable in marketing as well.
Frame 1: Loss Aversion
People experience losses more severely than they experience gains of the same value. A good example is how the pain of losing a home to a fire surpasses the joy of buying a new home. Insurance firms have leveraged loss aversion to create a multi-billion dollar industry. Similarly, you can leverage loss aversion to make a client see what they would potentially lose by foregoing your product or service.
Frame 2: Opportunity Cost
Opportunity cost loosely defined is the loss of other alternatives when one alternative is chosen. The cognitive bias is over-indexing on what is lost rather than what is gained. An example of opportunity cost is a student choosing to go to the movies before their exams; the opportunity cost is the time they would have spent studying. Similarly, in some situations, as a salesperson, you could leverage this to show the opportunity cost of choosing one thing over the other.
Frame 3: The Contrast Principle
As human beings, we love to compare things. Comparing gives us a platform to make choices where we feel we have chosen better than what we have compared to. A good example of this is when you go to a store and there is only one option for a detergent that is unknown to you. You are less likely to buy it. Now, say you go to a store and there are three brands of detergent, all new brands, with different prices, branding, and quantities. Your brain will make an analysis and choose the option you like best. Giving your client a base to compare to might just be the push they need to make a choice on your product.
Frame 4: Less is more
The human mind hates confusion, and confusion leads to a lack of definitive decision-making. Say, for example, that you are looking for a house. You hire a realtor to find you a home. If they find you 13 potential houses that all meet your criteria for what you are looking for, you will have a harder time deciding. An ideal situation involves leaning into preferences and finding the two best options. This is applicable for teams with multiple products. Pitching all your products might seem like giving your potential clients options, but in some cases, less is more. Instead, lean into one or two products that address their most significant pain points.
Frame 5: The Blemish Frame
This principle is based on two key factors, sequence and the fact that the blemish in question must be negligible. Recently, I went to an electronics shop to get a heater. Based on what we already know by now, the contrast principle was in play, and I was comparing two heaters. Each of them had a list of pros. In a case like this, a proven way to persuade your buyers is to have a long list of pros and, right at the bottom (sequencing), have one blemish that is not quite significantly listed, like, this heater is only available in two colours, you would think that people would buy the one without a blemish, but research shows that the beautiful human mind is more likely to prefer the blemished product. This is strongly tied to the cognitive bias of comparison. The mind will compare the pros with the cons, and the pros will outweigh the insignificant cons. Note that in this case, sequencing is critical.
Frame 6: Anchoring
The anchoring effect is a cognitive bias whereby an individual's decisions are influenced by a particular reference point, or "anchor". People have a tendency to rely too heavily on the first information they receive about a certain thing. A good example of this is an idea that is often used in pricing strategies. If you see a shirt that costs 1000 shillings and another one that costs 500 shillings, you are likely to think that the one worth 500 is cheaper. Even when its true value may be as low as 100 shillings, you will likely buy the 500 because you are reliant on the 1000 shillings as an anchor. The intention of the salesperson is most likely to make more sales on the 500-shilling shirt.
There are many more biases that the human mind has, and it may be very beneficial for you as a salesperson to understand just a tiny bit of the psychological advantages that you could leverage to make more sales situations work for you!
