Learning Nugget 32 - Customer Experience - Better Every Single Time
June 14, 2016
Learning Nugget 24 - Risk
April 10, 2016
BOLD Learning Nugget 32 - CX Innovation
June 20, 2016
Learning Nugget 15 - You're Biased
February 15, 2016
As brutal as this might sound, you’re biased. Don’t believe me…read on.
Look at the diagram below. What’s missing ? Say it out loud.
Well do you think you were correct ?
You probably said three (3)…..correct ?
What’s actually missing is context.
If I actually said, on our digital clock, what’s missing, you likely would have said :
If I said what’s the fractional representation of 12 over 45 you would have said the / Is missing
Another example is Lyn headed towards the bank.
The image in your mind, is that of Lyn walking towards a financial institution ? It most likely is as the term bank is used most commonly in our day to day lives in that context. But if you spent all day every day working on a riverboat, then your context would be very different, now you might envision Lyn swimming towards the river bank.
The key point here is best summed up by the following quote.
"For every complex problem there is an answer that is clear, simple, and wrong" - H. L. Mencken
The following article is a wonderful example of this:
In WWII, Allied bombers were key to strategic attacks, yet these lumbering giants were constantly shot down over enemy territory. The planes needed more armor, but armor is heavy. So extra plating could only go where the planes were being shot the most. A man named Abraham Wald, a Jewish mathematician who’d been locked out of university positions and ultimately fled the persecution in his own home country of Hungary, was brought in to oversee the operation. He started with a simple diagram—the outline of a plane—and he marked bullet holes corresponding to where each returning bomber had been shot. The result was the anatomy of common plane damage. The wings, nose, and tail were blackened with bullet holes, so these were the spots that needed more armor.
Or at least that’s what people thought, until Wald flipped conventional logic on its head. He said the military didn’t need to reinforce the spots that had bullet holes. They needed to reinforce the spots that didn’t have bullet holes. Because the planes that had been shot in these bullet-free zones never made it home to be accounted for. A bomber shot through the wing could likely make it to his diagram. A pilot shot through the cockpit wouldn’t.
Our natural conclusion, our initial response, upon hearing something or seeing something might often be wrong.
Yet we often rarely question our thinking. We are biased.
There has been a LOT or research on cognitive bias. There are now over 159 identified biases.
In Nugget 13 we explored the need to move customers from cognitive dissonance to cognitive consonance. What we learned was that customers who are in a state of dissonance are in fact being driven by their biases. Their beliefs, values, experiences, attitudes, memories or emotions.
Well it’s not just customers who are biased. In fact you, as a sales professional, may be more biased than they are.
Have you ever found yourself saying “this customer just doesn’t get it…argh”. You’ve got this great technology solution that will solve their problem but they just aren’t listening. Is that their problem or yours.
Or you’ve been to the latest and greatest training on objection handling. Your very next sales call you get the objection, yeah we’ve tried that in the past and it didn’t work, so thanks but no thanks. Thinking that this is indeed an objection is your own bias coming through. You didn’t get the outcome or action you wanted so you jump to the conclusion it’s an objection, but in fact it’s a bias the customer has.
For the purpose of learning lets create a new term “Sellers Bias”. The definition of which is the common, Top 15, biases that we have observed are common traits in traditional business to business (B2B) sales professionals.
“The first principle is that you must not fool yourself, and you are the easiest person to fool.”—Richard Feynman
So what are the Top 15 that Sellers typically display in their professional (traditional) selling behaviours with clients (list alphabetically):
#1 – Anchoring Bias - The tendency to rely too heavily, or "anchor", on one trait or piece of information when making decisions (usually the first piece of information that we acquire on that subject)
How this relates to us in sales. The most common reason for purchasing technology we hear from our usual “customers” (IT and Procurement) is cost. It’s about saving the company money. As a result we tend to anchor nearly all our sales pursuits on the simple economic value of showing how it will save the company money over a really short period of time. We all know deep down that cost savings is probably not the real reason, but we are anchored in this belief as it is how the clients play us off against other competitors.
#2 – Automation Bias - The tendency to excessively depend on automated systems which can lead to erroneous automated information overriding correct decisions.
How does this apply to us ? Don’t necessarily think just systems. Think powerpoint. Are we overly reliant on pre-built whiz bang presentations from marketing, product teams or from vendor partners. While fantastic, used in the right context with the right audience, they are mostly used inappropriately with the wrong audience. Quite often the client doesn’t care that our product has 14 more features or that we have 182 customers and our competitors only have 147, or that we’ve been in business for 100+ years. But our automation bias tells us that our best chance of success is to use the latest and greatest powerpoint on how wonderful we are. Or to use a tech / system example, we use Hoovers or some such other system to tell us about our customer, rather than doing our own contextual research
#3 Availability Cascade - A self-reinforcing process in which a collective belief gains more and more plausibility through its increasing repetition in public discourse (or "repeat something long enough and it will become true”)
Application – so many examples. The most common example I hear more often than anything else regardless of organisation size, scale or type is “management won’t let us do that”. I’m yet to hear an executive say let’s hurt our customers. Yet our fear of doing something different, even slightly different, prevents us. Our excuse, collectively we say management won’t let us. Another example is that IT are gatekeepers. Another one we hear all the time.
#4 Bandwagon effect – one of my favourites - The tendency to do (or believe) things because many other people do (or believe) the same
Similar to #3 in this top 15 list, but slightly different. This one applies to the individual rather than the collective. A classic example in our selling world is if sales leaders leave a training session but don’t apply the learning in the real world, as sales people we don’t either. Get on the “status quo” bandwagon. Another example in the opposite is if my peers in a small sales team start winning opportunities by talking to customers about 1 particular feature then I will as well.
#5 – Base rate fallacy - The tendency to ignore base rate information (generic, general information) and focus on specific information (information only pertaining to a certain case)
This happens all the time in sales. We tend to ignore the broader organisational goals and outcomes that our clients are seeking to achieve, and instead focus just on the on time, on budget ROI outcomes of IT. We measure our success on IT’s “project” success and not on the base underlying reasons for the investment in reality
#6 – Clustering - The tendency to overestimate the importance of small runs, streaks, or clusters in large samples of random data (that is, seeing phantom patterns)
Can I be brutal. A belief that conventional product and service sales success will continue forever. The good news is that you have collectively recognised this and are making a change. Likewise if 20 Phase 0 opportunities are attempted and only 2 are successful, it’s easy to focus on the two, but those two may have unique circumstances as to why they were own, and the other 18 might have very profound, awesome learning reasons why they weren’t. The patterns of wins and loses may hide the real reason for the win or loss. An example in the field of sales people is when working with a long term account. The pattern is annual budget setting and if you don’t get the opportunity in the budget then it isn’t a live prospect for the year. Yet time and time again the customer buys stuff that was not budgeted. We form the belief that the pattern is if not in budget, no opportunity, then we later find out they went outside budget anyway.
#7 – Confirmation Bias - The tendency to search for, interpret, focus on and remember information in a way that confirms one's preconceptions.
We are highly successful, hard working, professional sales people. It’s interesting that we tend to remember the wins more than the losses. If our close rate is only 30%, over the past 3 years, how many of the losses do you remember, versus how many of the wins. Remembering wins “confirms” our belief that we are hard working successful sales people. But we only won 1 in 3, which would suggest that in fact we might be hard working, but successful ? Is that an adequate objective, when we spend 66% of our time for no beneficial outcome for our customers, peers or shareholders. Therefore we don’t remember the losses.
#8 – Empathy Gap - The tendency to underestimate the influence or strength of feelings, in either oneself or others.
30 years of business training, including sales training, have taught us it’s all about the mechanics or the “sales process”. Yet growing research shows that decisions are made emotionally and justified with value, facts and logic. Yet 90% of our “sales process” is grounded in the facts and logic aspects of justifying the sale. We dramatically under estimate people’s feelings. You know when they are getting close to buying and they say “I nee to run it past the CEO again” or “We are just not sure, with so much going on, is now the right time”. Both are essentially viewed as risk of doing it style objections. But in fact they are feelings. Feelings of trepidation to proceed. Sure risk of doing it, but is the risk real or perceived, is it emotional, personal, organisational etc. We go in for the close, we get a senior executive to engage the CEO and convince them it will all be fine, we say we’ll apply our best and brightest to ensure it gets done on time and budget. While these are logical responses to the statements they don’t firstly deeply understand then adequately address the underlying feelings.
#9 – Functional Fixedness (another of my favourites) - Limits a person to using an object only in the way it is traditionally used.
We see this one all the time, all the time. Think about your offerings. How often have you deeply thought about how they could be used, in vastly different ways then you’ve ever thought about ? We think of hosted collaboration offerings as the ability to make / take phone calls, IM, video calls, do web conferences. But this portfolio has so much potential to fundamentally change the way the world works and how people work and collaborate. Some examples, the ability for a miner sitting in a control room operating a machine deep in the mines remotely, collaborating with an exploratory scientist in another part of the world to take samples in veins and lines of the mine. They are sharing real live video feeds, machine controls and sample handling. Another example neurosurgeon in operating theatre reaches out to experts on a previously unseen issue. These experts brainstorm and present recommendations to surgeon at the operating table. Just two examples but so many more. Verizon’s portfolio can literally change the world. But we tend to think of it’s capabilities in very very traditional ways.
#10 – Hindsight bias - Sometimes called the "I-knew-it-all-along" effect, the tendency to see past events as being predictable at the time those events happened.
C’mon you know this one applies to you. We’ve all done it. We just lose a big deal and we are talking with our manager and we tell them, “well I knew all along we really didn’t have a shot at this one”. Well if we knew that, why for the past 6+ months have we been saying we got this one, it will be a tight race, but we are confident we got it. Why, see #7 in this list of 15, confirmation bias. With the client saying, we really like your offer, your products are great, thanks you guys are awesome, we listen only to the things that confirm what we want to hear, we have a good shot at winning. When in fact we really did know all along, but were unwilling to face the harsh reality, we won’t win. Now ask yourself, how many opportunities in your funnel right now, today, are you really not going to win. Unless your win rate is above 50%, then the answer is at least half.
#11 – Information Bias - The tendency to seek information even when it cannot affect action
Do we ask for a lot of information from customers (IT and procurement) that has literally no impact on the outcome ? Sure we do. We ask about their budget cycle, we ask about their decision making process (even though decisions are made emotionally, not via a detailed mechanical process), we ask about how many vendors will be involved, we ask about who else will be involved, we ask about their existing network, etc. While all of this information might be interesting it literally has no bearing or impact on the decision. Worse we do it all the time. When we are deep in an RFP we ask all manner of questions that have no bearing on the outcome. But worst still, we do it to ourselves. As sales leaders, we ask “what can I do to help you close this opportunity”, or we ask, do we know who the decision makers are, do we know if they have budget, etc. Again all very very interesting questions, and I’m not saying they aren’t valuable, but what bearing, what direct tangible impact do they have on the successful sales outcome.
#12 – Irrational escalation - The phenomenon where people justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting that the decision was probably wrong. Also known as the sunk cost fallacy.
As sales leaders we may view a request for more discount as an irrational escalation, or a customer demanding a senior executive in an operational meeting when there is a project rollout issue or outage. But no, that is not what is meant here. It’s deeper than that. It’s about doing more when you know it’s a waste of time. In sales this is where we continue to attempt to snatch success from the jaws of defeat. The classic one is when we have no idea the customer has a need until they tell us that an RFP is coming out. They tell us, we wrote it with you in mind, as our trusted partner this is yours to lose. Yet we didn’t know about it till now. Sure some of those you do win, but as a percentage, how many really, 10%, 20%, 30%, more than 30% ? Our estimate from our client engagements, less than 20%. So 80% of the time when we get an RFP we never knew about beforehand we go after it due to sunk cost. That sunk cost is the sunk cost of the relationship. As a sales person I need to show that the 6-12 months of me “working” with this client has paid off into a viable opportunity to pursue, and good measure of that is an RFP, but now I realise I’m on a hiding to nothing, so I want the A team. I want all the ETC’s, all the execs and the best of marketing, lets throw the kitchen sink at it. I can’t very well turn around and say, look, I had no idea that they were even thinking about anything like this, I reckon we have a less than 20% chance of winning so lets not put the A team on it, lets just put the minimum effort to provide a compliant response, or lets go backwards, change the game and change he need, or lets decline to respond.
#13 – Negativity bias - Psychological phenomenon by which humans have a greater recall of unpleasant memories compared with positive memories.
Even though we have never ever worked in IT, we feel way way more comfortable talking to IT about our offerings than say a VP of sales. Reason, last time we did talk to a VP of sales or any other non IT executive it was uncomfortable. It was hard, clunky embarrassing. This unpleasant memory sits large in or memories and causes fear and nervousness. Think about the last time you were asked to do a role play where you had to role lay with a non-It exec. Even the role play was scary. Your memories are your mental handcuffs
#14 – Optimism Bias - The tendency to be over-optimistic, overestimating favorable and pleasing outcomes
Do I even need to explain this one. Every sales person in every industry is optimistic by nature. That why even when the data shows a 30% (average) successful close rate, we tell ourselves we can win everything in our funnel.
#15 – Overconfidence effect - Excessive confidence in one's own answers to questions. For example, for certain types of questions, answers that people rate as "99% certain" turn out to be wrong 40% of the time
Oh yeah, we do this ALL the time. Customer asks will this actually work in my environment, our response, “yep sure will”. Or are you sure I can save 25% of my telco costs just by moving to SIP. Absolutely, in fact I’m being conservative. Our TCO answers are a classic example of this. But our fallacy here is we are applying generic results to non generic customers. Yet we are often quick to respond. We want to show confidence in our offering, but what we are in fact showing is ignorance for the uniqueness of the customers unique situation and context. I remind you of the first question in this nugget, 1 2 4 5 …..what’s missing. Most will have confidently answered 3. Yet you were wrong.
Now probably the most important aspect of understanding these biases. None are wrong, or bad, or a curse. They are all real and all relevant. Some we may wish to change, or diminish. But they aren’t bad. It’s not to say if they exist I’m a hopeless, crappy sales professional. It’s just that you are the same as just about every sales professional. Blindly led by your biases to mediocre results (30% close rates). By focussing on identifying, adapting and recognising bias, and changing behaviours you can dramatically and quickly change this for positive outcomes.
Note this Top 15 list is the opinion of the author. Firstly if you think there are no biases that we as sellers have I refer you to #11 (on the 159 list) Blind spot bias (The tendency to see oneself as less biased than other people, or to be able to identify more cognitive biases in others than in oneself). On the other hand you may feel that there are more than 15 at play in our professional selling activities. You are probably correct.
Oh now upon reading these, if you feel (as hard as it might be to admit) that these Top 15 “Sellers Biases” are an accurate reflection of your biases. You might be surprised to know that you’ve actually just demonstrated another bias. The mere fact that I called them Sellers Biases, I made the generic into a list that was specific to you. In doing so and by acknowledging these are a good reflection, you’ve demonstrated a Forer Bias (#47 on the list of 159) which is The observation that individuals will give high accuracy ratings to descriptions of their personality that supposedly are tailored specifically for them, but are in fact vague and general enough to apply to a wide range of people.
Look out for Nugget 16 to see how you and your teams can start to identify bias at play in real time and, not how you overcome them, but how you recognise and change your actions to focus on success, rather than accelerate failure.