Business Development

How to transform a no? into a yes? in business

Tara Bryant | 14 June 2019 | 5 years ago

restructuring business
Business growth and the conversion of sales are all underpinned by smart conversations, persuasive dialogue, and building rapport. Whilst you can’t control the final outcome, you can responsibly influence it.In order to do so you need to understand the way human’s make decisions.

Cognitive bias is defined as an error in reasoning that causes us to deviate from good judgement and make illogical decisions.

The theorem demonstrates that humans arent purely rational: not only do our emotions get in the way, but we also tend to repeat our reasoning mistakes.

To help increase conversion rates and communicate more successfully, I have listed the most common seven cognitive biases: describing what they are and what that means for salespeople to succeed.

1. Anchoring effect:

A prospect’s inbuilt bias to give greater weight to the initial piece of information they hear when forming an opinion.

This subliminal prejudice is extensively used in retail stores, to convince consumers to purchase items. For example, the ‘sALE? sign on a price tag informs the purchaser that they are getting a bargain.
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What that means for you:

Use the anchoring effect to structure your pitch in the most effective way possible.

Before you begin highlighting the various features and benefits of the product/solution you are selling you must understand exactly what your prospect needs as a solution.

£2. Ambiguity effect

A prospect’s tendency to mistrust what they don’t understand. The implication of such a bias is simple, people prefer to choose an option with a known probability of a favourable outcome, over an option where the probability is unknown.

What that means for you:

This cognitive bias can impact the choice between a prior solution/product that isnt that effective or losing value; rather than taking a chance on a new product/solution that promises a better offering, but is missing information that makes the outcome unknown.

To ensure you don’t fall prey to the ambiguity effect, simplify your proposition, provide relevant facts and figures and tell a compelling story in a language tailored to your prospect’s backgrounds and interests.

3. Bandwagon effect

A prospect’s susceptibility to trust social proof, primarily because other people are doing/using it, regardless of their own beliefs and opinions. This cognitive behaviour is prevalent in various social situations, from politics to popular TV series.

What that means for you:

This cognitive bias can be very useful in sales conversions, through utilising highly relevant case studies that bring the product/solution on sale to life and garner prospects? trust.

4. Confirmation effect

A prospect’s preference for things that are in line with their preconceptions.

The challenge with this bias is that decision makers tend to interpret the sales proposition as a means of confirming their individual bias, rather than considering the product/solution on its own merits.

What that means for you:

It is vital that you spend time listening to your prospects. This way, youll be able to understand what they need and think to provide the relevant information that confirms their beliefs.

5. Halo effect

The halo effect is all about first impressions. Nicholas Boothman, author of How To Make People To Like You in 90 Seconds or Less, argues that the outcome of a sales call is achieved or lost in the first 90 seconds. Speaking to this data collected by Gong revealed the opening line How have you been came in at 6.6x higher success rate than the baseline.

What that means for you:

Ensure your initial focus is intent on building rapport and gaining trust, focusing on relationship building, rather than pitching.

6. IKEA effect

A prospect’s inclination to significantly value something greater if they played a role in building it.

What that means for you:

The sales professional can work together with the prospective buyer to customise the solution/product to cater to their individual requirements, making them feel like they have played a part in shaping the solution, increasing the perceived value of your offering.

7. Sunk-Cost Fallacy

A prospect’s innate drive to finish what they started. The bias explores how people are particularly and often irrationally, attached to persevering with a relationship, product or service when personal effort, time or money has been invested.

What that means for you:

This can make it challenging to convince prospective buyers to commit to a new product or solution; to counteract this, encourage the prospect to agree to small commitments. They will be less inclined to quit after putting time into your proposal.

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