When the Biggest Risk is Playing it Safe

What the sales team can learn from behavioral psychology

This is probably not news — certainly not to me in my other life as a recreational tennis player: most of us hate losing more than we take satisfaction in winning or potential gain. If I leave the court with a decisive 2 set win, I’ll spend the next 24 hours playing the best points in my head…then move on with my life. If I’m on the losing end, it becomes an all-consuming obsession, eating at me like a rolling toxic heartburn. For days.

Clearly I’m not alone. The psychologists Daniel Kahneman and Amos Tversky demonstrated the intensity of “loss aversion” with an exercise involving a coin toss. “In my classes, I say: ‘I’m going to toss a coin, and if it’s tails, you lose $10,” said Kahneman. “How much would you have to gain on winning in order for this gamble to be acceptable to you?’

“People want more than $20 before it is acceptable. And now I’ve been doing the same thing with executives or very rich people, asking about tossing a coin and losing $10,000 if it’s tails. And they want $20,000 before they’ll take the gamble.”

In business, loss aversion is perhaps most evident — and powerful — in the embrace of the status quo. Change, any kind and any degree, is risky. This is one of the biggest challenges a salesperson must overcome.

“Customers are most likely to rethink their current course or reset pre-established buying criteria only when given a reason,” says Brent Adamson, principal executive advisor at Gartner. “Sales reps who provide more than the benefits of taking action, but also the cost of inaction, are likely to drive a customer to make that kind of change.” (From Challenger™ Sales Reps MotivateCustomers to Buy, by Jordan Bryan)

The sales rep needs to spell out the drawbacks of maintaining the status quo. This reminds me of an exchange I had with the CEO of a company we were pitching. We were looking to use their underlying technology to develop a new type of employee engagement platform, which was pretty far afield from the intended use.

“We must consider the opportunity costs,” he countered, after he indulged the spiel.

“With respect,” I responded, unable to stop myself, “I suggest you consider the costs of not pursuing this opportunity.”

Bryan’s article lays out several very sensible rules of the road in engaging a potential customer:

  1. Establish credibility with buyer.
  2. Reframe buyer’s understanding of their problem to capture their attention. ()
  3. Quantify the cost of inaction to build urgency and momentum for action.
  4. Make the sale personal by having the buyer emotionally feel the problem with the status quo.
  5. Propose a solution that addresses the underlying cause of the problem.
  6. Share your solution and unique capabilities after the buyer feels the problem and effectiveness of a solution.

We bake these principles into our white papers, collaterals and campaigns. Facts support, but spelling out the short-sightedness of continued inaction creates a strong emotional imperative to something. Averting loss doesn’t automatically mean playing it safe — it’s the sales rep’s job to convince the customer that to avoid missing out is the safe play.

Charles Epstein, BackBone President. For more, visit www.backboneinc.com.

Tech, Workforce and Healthcare PR, marketing communications, bus development.

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