Cognitive or psychological biases are subjective perceptions that we draw on when processing information.
Whether you realise it or not, many of the decisions you’ve made throughout your life have been influenced by them.
Some are harmless and even comical; others can be costly. In this article, we are going to share some of the main psychological biases that influence sales and that can help you understand why people buy.
It’s all a course every sales or marketing professional should understand and be ready to take advantage of when the opportunity arises.
Here are five cognitive biases that can be leveraged to drive sales:
Leveraging the image advantage effect
Humans are visual creatures.
We connect with images much more deeply than we do with text.
Yet sales teams often give presentations with slide after slide of nothing but text, with no graphics or images to support what is being said.
In countless studies, scientists have found that pictures are easier to remember.
Therefore, when addressing potential clients, try to replace the text in your presentation with graphics.
John Medina, the author of Brain Rules, reveals that “multitasking, when it comes to paying attention, is a myth”.
People have a hard time reading and listening at the same time.
So don’t force them to do it. Give them images that are easier to remember.
Adopt the idea of communicating with graphics rather than just text.
Use the “Bandwagon” effect to drive sales
The bandwagon effect is what we call it when people buy a product, adopt an attitude or embrace a certain behaviour simply because everyone else is doing it.
As more people follow the trend (e.g. Crocs, Meerkat, pet rocks, etc.), others are inspired to jump on the bandwagon.
Sales professionals can use the bandwagon effect by advertising how many other brands are using their product or service.
In B2B, this happens in the following way:
- Putting the logos of the companies that are using your service on your website
- Highlighting one pricing tier as the most popular
- Referencing competitors using your solutions in outreach emails
- Embedding third party reviews on your website
- E-commerce sites often use the “bandwagon” effect by showing shoppers what other people have bought.
Use high and low price anchors
There is an old question in advertising: how do you sell a 2,000 Euro watch? The answer: put it next to a €10,000 watch.
That is the anchor price.
Anchoring is a cognitive bias that says we rely heavily on the first information we are offered (in this case, the anchor price) when making decisions, i.e. we use the initial price as a reference, regardless of how high it is.
Adopt accurate pricing
Most of us think we want our prices to be nice and round: In a study conducted at Cornell University, researchers found that people judged accurate prices to be lower than rounded ones.
In fact, studies have found that shoppers will pay more if the price tag shows an accurate number rather than a clean, rounded number. For example, 354,294 euros is more likely to attract a buyer than 350,000 euros.
We have a clear bias against round numbers in high-priced transactions.
So, when crafting your proposals and communicating prices to the company’s customers, be aware of the influence that accurate pricing will have on the buyers’ perception of value.
The irrational escalation of commitment
We’ve all seen this in the workforce. You make a serious investment in a project, but the project struggles. Or maybe you have a successful project, but leadership believes they could do even MORE with a little more investment.
For years, organisations have faced situations like this, and have found it difficult to find when to stop.
Why this phenomenon occurs: It’s a cognitive bias called irrational escalation of commitment.
It leads people to buy lottery tickets over and over again. We are used to believing that after investing in something once, our chances of success increase.
We believe that adding a little more money to a problem can fix it.
We believe that adding a few more licenses to an account can accelerate growth.
We believe that buying one more add-on will increase our return on investment.
This bias is something that sales teams and marketers can leverage.
It is something they can use to increase the lifetime value of their customers and impact the bottom line.
This is achieved by facilitating up-selling.
As a buyer is going through the process of purchasing and buying your solution don’t hesitate to include opportunities where they can add inexpensive functionality to their plan.
By accepting a call to action like this after they have selected a larger plan, they are more likely to continue to add benefits to their order.
There are several cognitive biases that can shape your sales strategy
Familiarise yourself with the main cognitive biases that affect your buyers (like the ones on this list) and use that psychological insight to design pitches, display prices and create great proposals.
You’ll soon see how harnessing this can increase sales, and you’ll be more aware of your own direction so your brain doesn’t play tricks on you.
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