{"id":2583,"date":"2015-01-24T14:01:18","date_gmt":"2015-01-24T03:01:18","guid":{"rendered":"http:\/\/blog.panicola.com\/?p=2583"},"modified":"2015-01-24T14:01:18","modified_gmt":"2015-01-24T03:01:18","slug":"dont-give-reasons-for-prices-it-triggers-a-psychological-reflex-to-regain-control-and-bargain-down-the-price","status":"publish","type":"post","link":"https:\/\/blog.panicola.com\/?p=2583","title":{"rendered":"Don’t give reasons for prices – it triggers a psychological reflex to regain control and bargain down the price"},"content":{"rendered":"
Salespeople talk too much.<\/p>\n
In an earlier article<\/a>, I discussed a study\u00a0suggesting salespeople would be more persuasive if they relied more on visuals than words. Here we\u2019ll talk about what\u2019s perhaps the most likely point in the selling process where salespeople say too much\u00a0\u2013 and trigger the price bully that lurks in every buyer\u2019s heart.<\/p>\n
Courting is a little like sales, right? Imagine you\u2019re a guy who\u2019s been dating a woman for some time and you decide to propose. You want to close the deal. So you buy her a ring and take her to a nice restaurant. As you hand her the ring, you lay out, like bullet points, the five reasons you\u2019re the guy for her.<\/p>\n
What she wants is for you to let the ring, and the sincerity expressed in your misty eyes, do the talking. Laying out your value proposition at this point seems like desperation, or doubt. She\u2019s thinking, \u201cAfter all that courting, why does he think he needs to convince me? Or is he not convinced himself?\u201d<\/p>\n
How many times have you seen salespeople, just before a close, try to justify their price by revisiting the key benefits of their product or service? How many times have you succumbed to that urge yourself?<\/p>\n
It\u2019s a bad selling tactic. The research suggests you will trigger the same reaction in your prospect that our hapless Romeo triggered in his Juliet.<\/p>\n
Justifying your price seems like common sense. If you\u2019re going to ask someone to do something, how could it be a bad idea to remind them of the reasons? There\u2019s actually a landmark study out there that seems to give credence to the idea. Unfortunately, most people completely misread its conclusions.<\/p>\n
The study<\/a>, called \u201cThe Mindlessness of Ostensibly Thoughtful Action,\u201d was conducted in 1978. It observed how people waiting in line to use a copier responded when somebody at the back of the line tried to cut ahead. When the person simply asked to go first, 60% agreed. When the person\u00a0said, \u201cMay I use the Xerox machine because I have to make a copy?\u201d 93% said yes \u2013 even though the \u201creason\u201d itself made no sense.<\/em><\/p>\n
Based on this study, salespeople are often advised that there\u2019s some mechanism in the human psyche that responds to reasons, and that enumerating them will improve close rates.<\/p>\n
Problem is, there was a second part to that study. In Part 2 the researchers raised the stakes. They had the line-cutter say, for example, \u201cI need to make 20 copies; can I go first?\u201d Predictably, fewer people said yes, only 24%. When the line-cutter tried again, adding a bogus reason why he had to make 20 copies, the reason had no effect.<\/p>\n
So that study showed that reasons work when the stakes are low but provide no benefit when they\u2019re high, which they usually are in selling situations.<\/p>\n
A more recent study<\/a> showed that giving reasons not only doesn\u2019t help, it actually hurts<\/em> salespeople. Researchers analyzed two negotiations over the price of an apartment. With buyer Group 1, the sellers presented a price, then added justifications, pointing out that the building had an elevator and was in a desirable neighborhood. With buyer Group 2, they simply named the price and remained silent.<\/p>\n
Buyer Group 2 didn\u2019t bargain as hard and agreed to a higher price. Why? The researchers said the justifications made buyers in Group 1 feel they were being pushed into a corner, and that the seller was trying to do their thinking for them. And here\u2019s what\u2019s really interesting: The Group 1 buyers responded to justifications by coming up with reasons why the apartment wasn\u2019t so great. \u201cYeah, that\u2019s all true, but parking is a pain and there aren\u2019t enough washing machines.\u201d<\/p>\n
The researchers described this pushback as a psychological reflex to regain\u00a0control, which is the most powerful insight in this study. Justifications are perceived by the buyer as an\u00a0attempt to take control. Just stating your price and remaining silent leaves the buyer in control<\/em>. For whatever reason, buyers who feel they\u2019re in control are less likely to undermine your value proposition and demand a lower price.<\/p>\n
All that said, there is of course an appropriate time to lay out your value proposition \u2013 early in your discussions as you\u2019re conducting discovery and mapping your product or service to customer needs. Just don\u2019t do it late in the sales cycle\u00a0when you\u2019re negotiating price.<\/p>\n
As hard as it may seem, you\u2019ll get a higher price if you just say, \u201cHere\u2019s what it costs,\u201d and then shut up.<\/p>\n
You might want to go easy on the misty eyes though.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
http:\/\/www.forbes.com\/sites\/stevemeyer\/2015\/01\/09\/the-1-reason-why-salespeople-leave-money-on-the-table\/ The No. 1 Reason Why Salespeople Leave Money On The Table Comment Now Salespeople talk too much. In an earlier article, I discussed a study\u00a0suggesting salespeople would be more persuasive if they relied more on visuals than words. Here we\u2019ll talk about what\u2019s perhaps the most likely point in the selling process where … Continue reading Don’t give reasons for prices – it triggers a psychological reflex to regain control and bargain down the price<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,8,29,27],"tags":[],"class_list":["post-2583","post","type-post","status-publish","format-standard","hentry","category-business","category-entrepreneurship","category-management-and-leadership","category-storytelling"],"_links":{"self":[{"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/posts\/2583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2583"}],"version-history":[{"count":1,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/posts\/2583\/revisions"}],"predecessor-version":[{"id":2584,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=\/wp\/v2\/posts\/2583\/revisions\/2584"}],"wp:attachment":[{"href":"https:\/\/blog.panicola.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.panicola.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}