How do you change indecisive customers into buyers?
The bane of many businesses has always been the no-decision loss. So much time, energy and resources are poured into opportunities that end up going nowhere. And it’s a problem that is about to get a lot worse.
In a recent study of 2.5 million sales calls – the results of which I discuss in my recent book, The JOLT Effect, written with Ted McKenna – we found that anywhere from 40% to 60% of the average seller’s qualified pipeline will ultimately be lost to a verdict of no decision. And that’s a figure from mid-2022. Today, sales leaders across industry are reporting to us that the figure is even higher, as customers look to preserve cash, keep their powder dry and kick big decisions down the road until the macroeconomic picture becomes clearer.
While it is surprising that no-decision losses are prevalent and their number increasing, it is more surprising still that, historically, the causes have been massively misunderstood. Even by long-time sales ‘anthropologists’ such as myself.
The conventional wisdom in sales has long been that the customer who gets cold feet and ends up in no-decision land is, in fact, making a decision: they’ve decided to remain with their status quo. Perhaps they feel that what they’re doing currently is good enough. Perhaps they don’t see the vendor’s solution as compelling enough to change. Or perhaps they just don’t see the investment as a priority. All of these are forms of status quo bias – a potent human bias and a real and painful phenomenon in sales. Human beings have a deep-seated preference for things to remain as they are, so getting customers to embrace change is no small feat. It’s no exaggeration to say that salespeople have been given to believe that the customer’s preference for their status quo is the biggest, if not the only, enemy a seller faces.
In the face of such ingrained resistance to change, salespeople have been taught to double down on their efforts to beat the customer’s status quo. In our analysis, we found that there are typically three approaches that sellers use.
First, they attempt to convince the customer of the benefits of the purchase. “Can I send you some more proof points to show your leadership team?” one rep asked desperately, as he felt his deal slipping through his fingers. Second, they try to use FUD tactics – or, fear, uncertainty and doubt – to create a burning platform that the customer has no choice but to abandon. “You know,” one rep said ominously, “the problems you’ve told me about aren’t going to solve themselves.” And, typically, the third attempt involves some sort of expiring offer or discount that’s only good this quarter. “I’d hate for you guys to have to spend more later for the same thing you can buy for 10% less today,” another rep offered. While these techniques seem different, they are one and the same: attempts to dial up the FOMO, or fear of missing out, by the customer.
But our study revealed something altogether unexpected. When sellers use this arsenal of techniques with customers who express their desire to change but then start to waver and backpedal, the results are disastrous. Instead of prying the customer out of the vice-like grip of the status quo, these techniques increase the odds the customer will do nothing and the deal will be lost to no decision. How can this be? After all, isn’t the key to getting the customer off the fence to prove to them that “the pain of the same is worse than the pain of change”?
Well, it turns out our understanding of what keeps customers from moving forward is woefully incomplete. Our analysis showed that the customer’s preference for their status quo is only one of two possible reasons a deal can be lost to no decision. What’s more, it’s the less difficult of the two. The other reason, which accounts for nearly 60% of no-decision losses, is customer indecision rooted in a fear of failure.
Like status quo bias, the fear of failure is a decidedly human trait. People have an innate predisposition to be more willing to accept loss that stems from doing nothing than loss that stems from doing something. Consider the oft-referenced hypothetical situation: a train is headed down the tracks and, if it stays on its current trajectory, it will plough into a group of people and result in five deaths. However, you have a lever you can pull to send the train on a different course. But if you pull the lever, the train will kill one unsuspecting bystander. As rational as it seems to pull the lever, most people say that, in fact, they would not. Why? Because they dread the thought of being personally responsible for one death more than the idea of sitting on the sidelines and letting five people die.
This phenomenon is called omission bias and it helps explain not only why the fear of failure accounts for more no-decision losses than any expressed preference for the status quo, but also why using FOMO tactics can backfire so dramatically. After all, when we use these techniques to try to coax the customer into making a decision, all we’re doing is using scare tactics to sell to a customer who is already afraid. But, more often than not, they’re much less afraid of missing out than they are of messing up.
Sellers must understand that customers may be staring down big, career-impacting decisions, and doing so in an uncertain economic environment where even small purchases are dealt the highest levels of scrutiny within the customer’s organisation. In these cases, the FOMO matters a lot less to buyers than the FOMU – the fear of messing up.
It can be depressing to think that the increase that sales teams are seeing in no-decision losses is less a function of a tight budgetary environment than it is the natural outcome of millennia of learnt human behaviour.
But, fortunately, it isn’t all bad news.
Our study also found a ray of hope: high-performing salespeople – without ever being taught to do so – have figured out a way around this confounding problem. In my next column, we’ll explore the playbook that these gifted sellers have developed to win in the face of customer indecision and to reduce the number of no-decision losses they incur.
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