Rational decision making:…..a bit of a gamble.

People (your prospective customers) rarely say what they mean or mean what they say. So how do you know which of your prospects are likely to turn into ‘sales’ and which are not so likely?

A recent investigative experiment into the neuroscience of decision making may offer a very good way to separate your prospects from your suspects. The ones you should give time to and the ones you should give-up on.

The Experiment:

Sightseers outside the Tower of London were approached randomly and offered, as a free gift, a £20 note. This was a genuine offer, no-strings-attached. As each person moved away clutching their prize they were waylaid by the person who had just given them the money. This time they were offered an additional £10 note which they could win for the toss of a coin: If it came up ‘heads’ they would be given the additional £10 gift. However if it came up ‘tails’ they would not get the £10 and would also have to sacrifice the £20 leaving them with nothing.

Sixty people were approached during the morning and the results were recorded.

In the afternoon of the same day another sixty sightseers were approached. This time each person was offered a genuine free gift of £30. This time as the money was handed over the gift giver said “Unfortunately I have a few expenses to pay in order to be able to giveaway free cash so I have to take away £10 from the amount I was going to give you, which will leave you with only £20. But I am prepared to offer you a chance to regain that £10 on the toss of a coin. If it comes up ‘heads’ you can keep the £20 and add the £10 to make it up to £30 again. If it comes up ‘tails’ you will not get the £10 and you will also have to surrender the £20.”

So what do you think the majority of people did in the first case? And what do you think the majority of people did in the second case?

The results were quite decisive. In the morning the majority nearly 80% decided not to gamble and opted to keep the £20.

However in the afternoon the over 70% opted to gamble and take a chance to win back the full £30.

The point is that both situations were actually identical.

In both cases the person approached had the opportunity to walk away with a free £20 note. No gamble! Or toss coin and end up with either £30 or nothing. What was different was the way in which it was perceived.

The difference in perception, was that in the first instance the gift receiver had a nice little £20 gain right out of the blue. They were then offered a chance to gamble to gain £10 more. The majority chose not to gamble and opted to preserve their ‘win’

In the second instance the gift receiver had a potential £30 gain from the start. The joy generated by the potential of this gift was shortly afterwards dashed when £10 was cruelly snatched back reducing the gain by over 30%! The result was a ‘perception of ‘loss’ of something they once enjoyed (albeit briefly). The decision, when offered a chance to regain the loss, was to ‘throw-caution-to-the-wind’ in a wild attempt to regain the original amount by taking a chance. In this case the majority chose to gamble.

So will he?…. won’t he?

So what does this tell us about which potential new customers are more likely to buy?

It seems that the same process comes into play when we’re deciding whether to stay with an incumbent supplier or set out in another direction with someone new. If our regular supplier continues to give us good reliable service (with the occasional little surprises of exceptional beyond-the-call-of-duty service ) then we count that subconsciously as a series of little wins. In such a case we may go through the motions of an occasional out-to-tender exercise but the incumbent is actually pretty safe.

However if we perceive that a ‘once reliable’ supplier has started to let us down occasionally and become complacent then we begin to feel that we are losing something. And it is in these situations we are much more likely to take a chance and gamble on appointing a new (unknown to us) supplier.

It is for this reason we sellers must always endeavour to get a prospect to talk about the problems they perceive with the existing situation. If they mention the name of the existing supplier (or internal department) never join them in criticism but just say “I’ve heard they are very good”. Then if they’re truly unhappy they will frequently say: “ Maybe but…” and for some peculiar reason, proceed to tell you much that you need to know about what’s going wrong. You can often encourage prospects to add to the list by saying: “Is it just those things?” whereupon they will start to add to the list as if they think you’re not yet convinced. It is in these situations that most successful sales are hatched.

On the other hand if they’re reasonably happy with a current supplier and just doing an annual spring-clean/ price checking exercise they won’t have much of a list of perceived problems to share. They might be smiling and enthusiastic: “That’s great ….we’ll let you know soon” but it is unlikely that they will change to you.

It is for this reason that, in my experience, RFP’s and RFQ’s (Request for Proposal; Request for Quotation) are not good things if you receive one out of the blue. If the first you know about a project is derived from receiving an RFP/RFQ you are usually very late to the table. It is because they are frequently part of a regular bi-annual exercise or the boss has said, “OK our exsiting supplier still looks good….but we’d better get a couple of alternative quotes in…just to make sure.” And the resultant RFP is subsequently written round the strengths of an existing supplier rather that allowing you to emphasise your strengths.

(I recently failed to get two jobs for precisely that reason…..They had been recommended to use my company by existing clients of mine to achieve a specific objective BUT they ‘knew’ the other supplier…..he had always gone down well with the troops…. They ‘knew’ what to expect….. And the clients involved told me so both times.

Never mind ….sooner or later the existing supplier will get complacent and sloppy in which case the client will ‘toss a coin’ and take a gamble on me……Or you if I were to get complacent.

Bob Etherington

“Europe’s Best Sales Trainer” :  [Voted by ‘Sales Innovation Expo’ 2015 and 2016, Excel London.]

www.bobetheringtongroup.com

bob@bobetheringtongroup.com

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