Sales is a people game. And people are predictable.
If you can understand how people think you will be infinitely more successful in closing sales. Most buying decisions come from deeply seeded subconscious mechanisms, and mastering these psychological hacks will help you close more deals.
Here are three common psychological fallacies and how you can use them to drive sales.
Sales Psychology: Loss Aversion
Often referred to as regret theory, loss aversion is a concept where people prefer avoiding losing something they already have over gaining something new.
Here’s an example. You just crossed a busy street and cars are coming. You spot a $5 bill in the road. You are more likely to go back for the $5 if you had just dropped it than if it was a new one that you just found.
In other words, humans are wired to favor not losing $5 over gaining $5.
Kind of interesting, isn’t it? This psychological hack shows that we over-value the things already in our possession compared to future things we could have. And you can play on this attachment style to help you win sales.
Position your offer in terms of potential losses, not gains. When presenting your product or service, focus on what the prospect risks losing by not buying. Frame your offer in such a way that instills enough fear, uncertainty, and doubt that the prospect has no choice but to sign.
Another popular tactic that plays on loss aversion is to create urgency behind your offer. Try adding a time constraint to your pricing, or offer a limited number of spots for new clients signing on this week. Nobody likes to miss out!
Sales Psychology: Sunk cost fallacy
Have you ever had a hard time throwing out a piece of clothing you bought years ago but you’ve never worn? Or have you ever gone to an event that you no longer wanted to attend, simply because you already paid for the tickets? If so, you’ve experienced the sunk cost fallacy.
This psychological phenomenon is when a person continues a behavior or project simply because they’ve already invested time, money, or energy into it.
The sunk cost fallacy is essentially continuing something simply because you’ve already started it. Logical? No. But common? Extremely.
It’s the reason why so many Apple users refuse to give Android a try, despite countless reports that Andriod phones offer a better user experience. It’s the reason why people tend to overeat at buffets, and why couples who have been together a long time find it difficult to break up, even when they know they should. People value their previous investments highly and have a hard time walking away.
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So how do you use this to your advantage in sales? There are a few ways you can use this psychological hack to drive more sales.
Upsell your current clients, knowing they are significantly less likely to leave you once they have invested time and money with your solution. Upselling existing accounts should be your first step! Go get that low hanging fruit!
You could also offer rewards for continued business. These rewards don’t have to be real mind you; similarly to how you can tweak discount prices and deadlines to create urgency, you can offer bonus discounts and rewards to gamify your buyer’s experience.
With this trick, customers will be less likely to walk away if they are close to unlocking an upcoming “reward.”
Sales Psychology: Status Quo Bias
Closely related to the sunk cost fallacy, status quo bias is when people prefer doing nothing or sticking with a previously made decision. In short, status quo bias is an aversion to change, simply because it’s easier to stay the same.
When it comes to sales, the status quo refers to your prospect’s current situation. And more often than not, your prospect doesn’t want to change. Competing against the status quo is infinitely harder than competing with another product or service because your buyer has no motivation to buy.
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So how do you use this fallacy to your advantage? You have to make not changing sound worse than changing. Talk about the risks of staying the same – this is where customer case studies will come in handy!
Try to use examples from other clients where they initially didn’t sign on and suffered because of it. The biggest tool in your belt is the ability to show that not buying your product will cost them down the line.
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The human psyche is a powerful tool, and as you can see, it plays a massive role in our everyday decisions. Once you master these simple sales psychology tips you will be able to easily book more meetings and sign more deals!