Humans are decision-making machines. We make around 10,000 decisions a day – and most of the time we don’t even know we’re doing it. Understanding basic behavioural economics, how the brain processes those decisions, is the start of truly understanding selling.
In an ideal world, buyers would logically process all the information available to them before making the optimal decision. But we know that the subconscious plays a huge role in buying decisions – that’s why emotion matters, social similarity matters, and creating a sense of reciprocity matters.
Limitations to human rationality and computational ability (how much and how well we think) are key in the science of decision making, and in an age of data overload, buyers increasingly lean on subconscious shortcuts to make their decisions. Let’s take a look at some of those shortcuts…
Scarcity & Competition
An evolutionary hangover from a time when competition for food and resources was fierce, people are hardwired to respond to scarcity.
That makes limited availability, time-dependant offers and the belief that competitors may benefit valuable tools. A great example is the infomercial writer Colleen Szot, who changed the CTA in her ads from “operators are waiting for your call” to “if operators are busy, please call again”, and saw explosive results in her clients’ bottom lines.
That’s a combination of constructing a sense of scarcity and competition with ‘social proof’ – the idea that buying decisions can be encouraged by the perceived actions of peers and competitors.
Humans are categorisers– we have strong neural pathways that help us make snap judgements and file what we see away in a category. In prehistory this helped us to distinguish animals we can eat from animals that eat us, and friend from foe.
We take in huge volumes of non-verbal information in order to do this, particularly when we meet other people. This is one reason why face time can be so valuable to a well-drilled sales force – the dress, attitude, physical communication and behaviour of a salesperson can all help to create trust, rapport and authority. Getting ‘filed’ as trustworthy and competent puts salespeople at a huge advantage.
The Base Rate Fallacy
The science of decision making doesn’t only come into play when the buyer is making a binary (‘buy’ or ‘don’t buy’) choice.
Long-established heuristics can assist in establishing differentiation and the benefits of one product over another. Known as the ‘base rate fallacy’, another categorisation shortcut utilises the part of the brain that compares options and opts for the more favourable.
At its strongest where a ‘base rate’ of performance, cost or value is difficult to determine (i.e. in the sale of complex, integrated tech products or services), a salesperson can strategically set a base rate and then use it to demonstrate the relative value of their proposed solution.
Put simply, imagine being shown a £25 bottle of wine and then a £10 bottle of wine, and having a master sommelier tell you there’s no discernible difference – it would be hard not to opt for the £10 bottle.
From post-decision rationalisation to defensive purchases, we’ll be digging deeper into the science of decision making in the coming months – it’s a complex, fascinating and powerful tool for Sales leaders and enablement teams looking to empower their salespeople to deliver next-level results.
It was arguably an understanding of the science of decision making that won the recent US election (Google data analyst Cambridge Analytica’s role in Trump’s campaign). As more and more data becomes available ahead of the pitch, we’re in uncharted and very exciting waters…
Get in touch with Mark now via the contact page. Use the newsletter sign up form in the footer of this page for free monthly Sales and visual comms insight in your inbox, or connect with Mark on LinkedIn.
– Tom @WSL