• May 1, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

The Psychology of the Sale

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For the rest of the May 2009 issue of CRM magazine, please click here.

It happens to every salesperson sooner or later: The prospect shows plenty of interest and hangs on all the way through the sales process—until something imperceptible changes and the deal goes stone cold. “I don’t know what went wrong,” you think to yourself. “We had a rapport going, and it was clear our product was exactly what they were looking for. The next rational move was to commit, but it’s all over.”

Maybe “The Sale That Got Away” becomes the main topic of argument at the next sales team meeting. Maybe it becomes a cautionary tale about that customer—or that salesperson. Maybe you just write it off as “one of those things” and move on. But nobody ever forgets, and one can go mad wondering why.

The fact is, there are some things you can control (or at least adapt to) in the modern sales game, but there are some that are forever out of reach. Readers of CRM should be familiar with the former, and they bear repeating. It’s the latter, of course, that are really fascinating, and will feel painfully obvious in hindsight.

First, though, let’s re-examine the familiar material.

Social networking, cloud computing, and a consumer-oriented culture have leveled the playing field as far as buyers and sellers are concerned. Technology that allows instant access to information and opens up new lines of communication makes it impossible to control the message anymore. “There has been a fundamental shift in the relationship between the buyer and the seller, driven by how much more knowledgeable the buyer is; the customer often knows more about the product and the competing options than the seller does,” says Jim Champy, chairman of Perot Systems’ consulting practice and author of Inspire!: Why Customers Come Back. “This demands authenticity on the part of the seller.”

More than mere honesty and comprehensive product knowledge, it’s important to express what your product or service is really worth to the customer, Champy says—what it means to their lives and livelihoods. “Pricing is not it,” he says. “The value proposition is what brings them back.” Knowing why your offer is better—and especially why it’s different—is something every salesperson must communicate. “Zipcar is a highly compelling and attractive business because its value is shared ownership, not car rental,” Champy says. “It changes the frame of reference.”

The complex situation is compounded by the number of people involved in the sales process today, something that old methods may not prepare salespeople to handle. “Sales-training programs always suggest finding the one decision-maker and concentrating on that person,” says Jim Dickie, a regular CRM contributor and a partner with sales consultancy CSO Insights. “We don’t know who that is anymore. It’s purchasing-by-committee now.” What used to be an individual, or perhaps a handful, has become a platoon, and it’s rare that the salesperson will be able to address all of them at once.

Another common factor that can be fatal to the process is personality and/or behavior conflict. Some salespeople don’t want to go there, because it might indicate a personal failing that could lead to loss of confidence. But “Be on your best behavior” isn’t just good advice from your mom—it applies in the boardroom as well.

“CRM is more than a technology dialogue, it’s a relationship with the person on the floor,” says Martin Lindstrom, brand expert and author of Buyology: Truth and Lies about Why We Buy. “When it was invented, it was with good intentions, but we’ve gotten off track. CRM has become an automatic process, but a limp handshake will turn you off.”

Little things like this might be Sales 101, but a refresher never hurts. (See sidebar, “The Cult of Personality,” at the end of this article, for more.) These factors can be accounted for, and there has been no shortage of good advice on how to do so. But beyond them lies a whole other minefield of objections, misperceptions, and quirks. It’s often unpredictable, at least in individual cases, and can’t be adjusted to so much as understood and endured. Its source is one of the most confounding things on the planet. It’s the human mind.

When customers flake out, it’s often because of something small, a subconscious cue that passes between seller and buyer that neither is aware of on the surface. That’s not a comforting thought, but it’s at the core of a body of research called neuromarketing. Despite the scary name, neuromarketing isn’t mind control; it’s the scientific study of human perceptions—sensory, cognitive, and emotional—as they relate to purchasing decisions. (For one of our columnists’ take on the concept, see “Neuromarketing Isn’t Marketing,” Customer Centricity, January 2009.)

Still hazy? Here’s a concrete example, one that may surprise or even shock you. In Buyology, Lindstrom describes a neuromarketing study of cigarette-pack warning labels. Smokers were first asked a series of questions about the effectiveness of the labels, such as “Are you affected by the warnings on cigarette packs?” and “Are you smoking less as a consequence of these?” on a paper questionnaire. Next, participants’ brains were scanned as they were shown a series of warning labels. During the scan, participants were asked to indicate their degree of craving for a smoke.

The results? Not only did the warning labels not reduce the desire to smoke, they actually increased it. “In short, [the responses] showed that cigarette warning labels not only failed to deter smoking, but by activating the nucleus accumbens”—the area of the brain that governs cravings and addictions—“it appeared they actually encouraged smokers to light up,” Lindstrom writes. “We couldn’t help but conclude that those same cigarette warning labels intended to curb smoking, reduce cancer, and save lives had instead become a killer marketing tool for the tobacco industry.”

Another, more-famous example mentioned in Lindstrom’s book is the Pepsi Challenge taste test from the 1980s, when passersby took a sip of two unidentified colas and were asked their preference. Author Malcolm Gladwell, in his 2005 best-seller Blink, describes the reason for Pepsi’s seeming success (57 percent preferred it in the blind taste test), and Coca-Cola’s bungled response (New Coke). The core problem, Gladwell contends, is that sipping a cola evokes different sensations than drinking a full can. Pepsi won the sip test because it’s sweeter, but Coke continued to lead the market because it wasn’t sweeter, and thus more palatable to adults. The lesson there is to sell your product the way it’s intended to be used.

But wait—there’s more. Lindstrom cites a neuroscientist who delved deeper into the Pepsi Challenge conundrum in 2003. The researcher, Dr. Read Montague, added another stage to the original blind taste test. The first round returned identical results to the Pepsi Challenge, and the subjects’ brains (specifically the ventral putamen, which activates when we taste something we enjoy) agreed. In the second round, Montague told the participants what they were tasting before they tasted it. Not only did the results shift to a 75 percent preference for Coke, they showed that different parts of the brain responded. In addition to the ventral putamen, subjects’ medial prefrontal cortex—the part responsible for “higher thinking and discernment,” according to the book—went to work in what Lindstrom calls a tug of war between rational and emotional responses.

“All the positive associations the subjects had with Coca-Cola—its history, logo, color, design, and fragrance; their own childhood memories of Coke, Coke’s TV and print ads over the years, the sheer, inarguable, inexorable, ineluctable, emotional Coke-ness of the brand—beat back their rational, natural preference for the taste of Pepsi,” Lindstrom writes. “Why? Because emotions are the way in which our brains encode things of value, and a brand that engages us emotionally—think Apple, Harley-Davidson, and L’Oréal, just for starters—will win every single time.”

As Lindstrom (and many others) have shown, it’s very common for a person to say one thing and feel or do another. No matter how rational we tell ourselves we are, at the end of the day we make the majority of our decisions based on emotion. Others are made specifically to counter emotion: “If you want something that much,” the thinking runs, “it can’t be the right decision.”

Neuromarketing has caused a lot of excitement in retail, where the line between marketing and buying is thinner, and gut reactions have a more immediate result. (See this month's cover story, “Selling Out,” for more on today’s retail scene.) But the principles apply to longer and more-complex sales engagements as well. “Sales, and business in general, is set up for rational, logical processes, but that isn’t where we really work,” Lindstrom says in a follow-up interview. “About 85 percent of everything we do is taking place in the unconscious mind. Yet we create more processes and think we’re incredibly smart for doing it.”

Emotion will win every single time. Consider the importance of that concept. It means that you’re far less likely to make a sale if the customer doesn’t like you for some reason, whether it’s your face, your voice, or your body language. That’s not news by itself. But it also means that you’re not immune—salespeople will have a harder time selling to people they don’t like, or to people who evoke an old flame who caused a painful breakup.

The solution, as with so many things today, is better intelligence. It’s not practical to wire every lead to a brain-scanning device, but there’s still information to collect. “Embed new research formats into companies to decode what customers really want. Develop a two-layer strategy: what they say and what they do,” Lindstrom suggests. “If I say on the phone that American Airlines service is crappy, that’s still only part of the story. I may still fly with them because they’re safe.”

We saw with the later work on the Pepsi Challenge that brand and brain interact. The people in charge of those brands must decide what is core—and unchangeable—and what’s a malleable perception. “Companies must decide, ‘What negative image can we afford—or not afford—as a brand,’ ” Lindstrom says.

It’s also important to know what to offer when, and to whom. “Studies have been done where customers…were scanned as they walked down market aisles,” Lindstrom says. “They show that a mom won’t be fazed by discounts and other offers—might not even notice them—but will always zero in on a particular brand of baby powder.” Similarly, offering a discount to a customer in the negotiation stage might not really sweeten the deal—it might turn him off, or serve only to reduce your company’s profit. But offer that same customer a more attractive training-and-support package, even if it costs more, and you might be answering his secret needs.

Intelligence-gathering can be achieved through a variety of sources, if you’ve got resources to manage the input. “Decoding Twitter ‘feelings,’ for example, is great,” Lindstrom says, referring to monitoring tweets for positive or negative buzz, sentiment, and actual issues. This sort of monitoring is starting to become a reality, as vendors experiment with ways to take tweets to heart. (See our chart, “Twitter on CRM,” in this month's Insight.)

One of the cleverer pieces of Lindstrom’s advice is also a bit more disruptive: “Smash your brand,” he advises. “It’s said that the glass Coca-Cola bottle was designed so that even if you break it, each piece is still recognizable as a Coke bottle. The most powerful brand message comes when the logo is not there.”

This applies to sales, too: If you can’t discuss your product without referring to canned phrases, stats, or comparisons, you don’t understand the product well enough. Find ways to have a new conversation every time. “Make this an exercise—create a message without mentioning the brand,” Lindstrom says. Sell with that message. Sell to the brain.

Contact Senior Editor Marshall Lager at mlager@destinationCRM.com.


SIDEBAR: The Cult of Personality
An industry pundit weighs in on how chemistry impacts a deal.

John Ragsdale, vice president of technology research for the Service and Support Professionals Association, provided a Sales 101 refresher course when he guest-blogged on A Software Insider’s Point of View in July 2008. It’s always a shame to blunt a good writer’s words by paraphrasing, so here’s an excerpt:

I don’t think developers and marketers at high-tech companies have any idea how many deals they are losing based on the personality of the sales rep. What is really shocking is how many times the obvious “best fit” vendor is dismissed from a deal because:

  • The sales rep was arrogant (I’ve heard this a dozen times about one vendor in particular).
  • The sales rep was late to multiple meetings and conference calls and the company felt the vendor didn’t want the business.
  • The sales rep didn’t know bubkes about the product functionality and tried to BS their way through—always a big turnoff.

Maybe I’m a troublemaker (OK, I admit it, I am) but sometimes I contact the vendor who lost a particular deal and ask them about it. So far, not a single time has the win/loss report had anything about the sales rep or the sales process. Usually it is a useless excuse like, “They weren’t ready to make a decision,” when that obviously wasn’t the case. Or, “We couldn’t meet their price,” when I knew the discussions never even got that far.

This is all very frustrating for me, because I want to see companies buy the right product to fix the right problem, and when there is a mismatch from Day One, it isn’t good for any of us. The customer ultimately doesn’t receive the ROI they expect. The vendor never has a referenceable customer. And I have far fewer success stories to write about than I should.

There is so much pressure in my industry (service and support) on after-call satisfaction surveys, I wonder why companies aren’t doing a better job of understanding the impression their sales staff is making
on customers. Why doesn’t the vice president of sales follow up with prospects after the initial sales visit and ask how it went? Why doesn’t someone other than sales create the win/loss reports so at least companies know how much business they are losing because of sales rep hubris?

So…ask yourself: “When was the last time I did a ride-along on a sales call?” Regardless of what your role is (engineering, support, marketing, etc.), maybe you should start making your presence known in more customer-facing sales situations. From what I’m hearing, you may be shocked at what you see.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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