How To Utilize the 10 Most Common Psychological Biases

How To Utilize the 10 Most Common Psychological Biases

Utilizing Psychological Biases in Your Sales Techniques

So far, we’ve discussed the emotional and logical needs that should be met in order to secure the sale.

But psychological biases throw a wrench into everything we’ve talked about because decisions using these biases simply don’t seem to make much sense.

10 Most Common Psychological Biases To Utilize In Your Sales Techniques

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Having said that, there’s no avoiding them because they are simply part of our fascinating human nature.

By learning what these biases are, and how to easily identify them, you can learn to arrange your sales presentation in such a way that these biases become a benefit.

1. Hyperbolic Discounting

If you were asked if you’d like to receive $10 today or $20 two weeks from now, which would you choose?

If you’re like most people, you’d choose the immediate $10. That’s what hyperbolic discounting is – choosing the immediate satisfaction, though it may be less than the longer-term choice.

From an evolutionary perspective, this makes sense. You have no guarantee of any tomorrow, so take what you can while you can get it, as opposed to waiting for a greater reward, but run the risk of never making it to that future point in time.

As a salesperson, you can take advantage of this bias by highlighting the short-term benefits of utilizing your product or service to your prospect.

If the main benefit is way off, focus on a few of the side benefits that will happen immediately.

2. The Bandwagon Effect

Have you ever “hopped on the bandwagon” of a trend, fad, way of thinking, etc.?

Think McDonald’s toys, Cabbage Patch Kids, and POGs. You bought them because…well because everyone else did.

We’re naturally attracted to the things we see others buying, whether we like or need them, or not.

And the more people that buy it, the more we want it. This is a great lesson for how powerful social proof is. If someone has it, someone else will want it and buy it.

3. The Ambiguity Effect

The theory behind this bias is that if a prospect has to choose, they will go with an option they are familiar with, as opposed to taking a chance on an option they are unfamiliar with, even though it may turn out to be a better choice with more benefits.

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This is the reason people choose to wear the same clothing, eat the same foods, and hang out with the same people – because the familiarity is comfortable, and we fear the unknown.

Make sure that your prospect has all the information they need to make the decisions they need to make to purchase from you. Be able to answer questions quickly, and ease concerns they have immediately.

4. The Decoy Effect

Also known as the asymmetric dominance effect, the decoy effect is the tendency of a buyer to choose the more expensive of two options, after a third option (the decoy) is presented.

That’s right. If you can’t decide on one of two choices, we’ll add a third and the choice becomes clear. (We warned you these didn’t make sense.)

That the decoy effect really works is nearly unbelievable, until you consider a study performed by Duke University wherein the participants were given two choices of restaurants – one was a close-by 3-star restaurant, one a far-away 5-start restaurant.

The participants couldn’t decide until a third possibility entered the equation – a 4-star restaurant that was further away than the 5-star restaurant. At that point, the participants chose the 5-star restaurant.

When presenting your prospect with options to buy, be prepared with a decoy to send into the mix should your prospect have trouble deciding on one of the two original options.

5. The Anchor Effect

Essentially, the anchor effect means that you will rely the most on the first piece of information you receive when making a decision.

It also means that any other information we’re given after the first will be compared to it.

To a salesperson, this means that you need to carefully plan how you’ll be presenting yourself and your product or service when you meet with your potential client.

Your first impression and the initial information you offer will be what your prospect goes back to when comparing everything you say.

Make sure that it’s positive and shines your product or service in the best possible light.

6. The Rhyme-as-Reason Effect

This bias simply reasons that we judge statements that rhyme as more honest and truthful than those that don’t rhyme.

The most effective, and most often used, example of this phenomenon is the O.J. Simpson murder trial of 1994. Simpson’s attorney, Johnnie Cochran, used the phrase “If it doesn’t fit, you must acquit” when faced with Simpson being requested to try on the infamous glove.

You can utilize this bias in your own sales practice by coming up with a rhyming phrase that describes your product or service.

7. The IKEA Effect

The IKEA effect means that people will place more value on that which they’ve helped to create, even when faced with a superior product that they didn’t have any involvement with creating.

It’s easy to work this into your sales arsenal by allowing your prospects to have a say in what they’ll receive by letting them customize a service package or product offering.

If they feel as if they’re already a part of it, they’ll be more apt to purchase it.

8. The Illusory Truth Effect

The more times you hear something, the more truth you’ll assign to it, and that’s what’s behind the illusory truth effect.

Repetition is your friend when you’re talking to your prospects.

You don’t want to annoy anyone by sounding like a broken record, but the more you can state your main benefits, the higher the chance that your prospect will see them as benefits as well. So keep on talking.

9. The Peak-End Rule

We already know that first impressions carry a lot of weight in a prospect’s mind. But the very end of your presentation is second in line.

This is because most people remember the beginning, and the end, of an experience the most.

Think about the last book you read, or the last movie you saw.

It’s very likely that you remember exactly how the story opened, and how it ended, but the middle parts might be less clear.

You can take advantage of the peak-end rule by creating very specific high points at both the beginning and the end of your presentations with prospects.

10. Loss Aversion

The concept of loss aversion is a powerful one when it comes to sales psychology.

There is a much greater psychological pull to avoid loss than there is to achieve gain – in fact, studies have shown that buyers are twice as likely to avoid loss when compared with the same potential to gain.

An example would be that most people feel it is better to keep (not lose) $20 than to find $20. We feel the pain of losing something far more than we feel pleasure at gaining something.

Never downplay the emotion that your prospects are working within making their buying decision.

Focusing on what they may lose rather than what they may gain might be your ticket to a higher close rate.

This post is part of a series – Psychology of Sales: Understanding the Customer Mindset. You can find the other posts linked below.

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