People are not rational and they don’t always do what they say, in fact, most times it’s the exact opposite. It is true for you and me as well. Most times what we think would be good for us is not the best thing that must happen to us or for us. For example, isn’t it great to have been given a slew of choices, wouldn’t this help us find the best product? Well, it turns out it’s not that rosy. Limited options tend to increase our satisfaction.
We don’t know how we function though we try our best to pretend that we do. And this is where the businesses can benefit. You can use the unawareness by being aware yourself.
There’s a lot of scope that’s currently untapped and most people or companies while hoping for the best with their actions are actually in the process of turning off the potential customer.
So, how do you do more sales? Well, by understanding your customer and not just on the surface level but by engulfing in the depths of their personality and behavior.
This is what we’ll do in this post. We’ll understand the behavioral science and why people do what they do?
The Path Of Least Resistance
As humans, our intrinsic property is to go where we see ourselves having to put fewer efforts. And this not only is the way we’re wired but everything and everyone functions on the same parameters from water to electricity all follow the path of least resistance.
So, basically in simple language, we can say that we’re lazy. Yes, we are inherently lazy even you no matter how much you try to defend it.
But here’s a lesson that can be the takeaway, your customers don’t want to go a route that is taxing and that makes them put in many efforts.
So, what it means is you need to make things simple for them.
Everything from finding the right information to completing the buying process needs to be in its most simplified form.
For example, an experiment was held where at a grocery store consumers were given two options to choose from.
One stand had 6 types of jams.
The other had 24 types of jams.
While the stand with 24 jams attracted more viewers it failed to turn them into customers.
The sale numbers of 24 jams (3%) lied a good percentage below the one with 6 jams (30%).
Also, as a consumer when we are given more choices we feel it is good for us but actually it ends up eating away some share of our satisfaction. For example, I recently went to an ice cream shop with innovative popsicles and a deluge of them. While the fridge seemed interesting, I was baffled, and even conscious of what’s happening because I’ve read about this psychological factor. I still ended up dissatisfied with my choice while it had more to do with the average taste of the one I chose there was a part of me constantly flashing the idea that maybe if I had chosen the other one it would have been better.
While it’s a small example, so small that it’s actually funny but what I am trying to point out is that these factors influence our behavior and emotions all the time.
How can you use this science?
Well, narrow down the options that you give your customers. But what if you sell a variety of products and that too in big numbers?
Don’t worry, you don’t need to eliminate the products. You only need to bifurcate them into categories. You can see this example from online shops like Amazon, Flipkart etc. They have categories and to simplify the decision making they have filters that help you limit your choice to exactly what you want.
The idea is to make it simple. So, see your current processes, are they simple? What can you do to make them simpler? Reflect and change.
Do you know the intensity of the feeling of loss is far more than that of the gain?
What does it mean?
It means losing a dollar will hurt you more than the good feeling you get when you win it.
Strange right? But that’s how our brain works. We are more protective and reactive of things when we know we’ll lose something because of our action or inaction.
So, how can you use it to increase your sales?
By showing what the customer is losing or missing out on when not using your product or service.
Mix your marketing and content with benefits of using your product or service with the loss of not using it.
Most of our behavior is motivated by the behaviors of those around us.
We are social butterflies even those who consider themselves not being social can’t escape this phenomenon.
This is probably the reason for most overrated products, movies, etc. I always wonder how something’s become so famous with their mediocre appeal what causes the spark needs more research to make estimations but what causes the fire is probably this factor.
When we see everyone praising a certain thing we tend to follow the herd and conform to the social norm and the opposite is true as well.
Companies are using this for years by showing the subscriber numbers to their blogs, services, and by showing the number of users, reviews, using celebrities for endorsements, etc.
Some examples can be Amazon which bifurcates customer reviews to make it easy to understand which products stand out and which don’t.
Facebook suggests pages your friends have liked or are interacting with. Friends recommendation is one of the strongest social proof.
And there are many more companies doing this.
What’s strange is the negative social proof works as well. For example, an ad by insurance company stating that 85% of people don’t have a retirement plan works against them.
Because it gives a social proof that most people don’t buy a retirement plan you don’t need it as well.
How can you use social proof?
Show reviews of your customers on your website, include it in your marketing, use stats to show the number of users and at what rate they’re increasing, list out your best sellers, mark a product or service as recommended, have a section devoted to trending topics, products, etc.
We are less rational more emotional.
It turns out while facts and figures entice our attention it’s the emotional value that wins the final say.
We base our decisions on the emotional value obtained from the conclusion.
That’s what Simon Sinek said in his speech on why the best companies declare their “why“ first because it motivates an emotional value. You Can Read About it Here
So, ask yourself what’s the emotional value your product or service provides to the customers and how can you project that in the way you promote it?
People don’t like a vague number or projection.
Your customers love the specific relatable information. For example, a picture with a message help Gary cure his Cancer is more effective than help 1,00,000 children cure their Cancer.
Messages that are clear and concrete hit hard than those with open ends.
How can you use it?
Make your benefits as clear and simple to understand as possible so your customers can see themselves using it.
How to do that?
- Show your customers the time you saved them
- The cost of operation your product lowered
- How many customers you helped them gain
Pain Of Paying
Paying hurts. It’s never a good scene to part with your money.
And if you don’t like it, there’s a 100% chance that your customers feel the same.
So, to make the pain bearable you’ll have to get to the depth of why it occurred in the first place.
Scrutinize your pricing model.
When do you ask for the payment? Is it after the realization of the benefit or is it before that? If possible ask for the payment after benefit realization.
What is the payment cycle? How often do you trigger the payment? Regular payments with short intervals hurt more. Make sure you give your customers a break.
What’s the medium of payment? According to studies, payment done through debit or credit cards feel less painful. The payment done through some points or credits are even better.
What’s the price of your main product? How can you justify it?
According to research, we pay for efforts. By helping the customers know the effort you put in to make the product or service possible you’ll be able to justify the pricing and make customers pay happily.
The other thing that can be of use is the relativity. Yes, you can use this in your pricing model.
For example – If you are a gym with different subscription models
Only Gym – 700/month
Gym With Personal Trainer – 1200/month
Gym with Trainer Plus Sauna And Steam Spas (special offer)- 1200/month
This way you could get more customers to subscribe to the third option as it is relatively better. So, when pricing your products or services add a comparison point to get more customers to sign in for the desired option.
It’s About Them Not You
People buy not for you but for them.
They want benefits, comfort, convenience.
That’s how your customers do the shopping.
So, take the focus away from yourself and onto the customers. Tell them what’s in it for them, why and how they benefit?
Your products and services must provide value to people, the greater the value the greater the retention and sales.
If you’re able to convey and convince the customers of the good they get when they subscribe to your services, you pretty much closed the sale there.
Let The Gates Stay Open
What I’ve understood in all these years of my existence is that when you let the bird loose, you actually hold her tight.
This applies to everything, why do people always do something they’re told not to?
We don’t like restrictions and that’s our way to revolt.
You can apply this to your sales. How?
End your conversation or sales pitch by letting the customer know that they have an easy way out.
Tell them that you totally understand if they wish to end the service, don’t buy the product etc.
They should always know that they are in control and they move in and out according to their whims and not yours.
This is greatly used by e-commerce companies like Amazon, Flipkart, Myntra etc. Which have easy return options if you are dissatisfied with the product. This gives a sense of relief to the customer that they are not stuck once they make a decision.
When You’re Wrong, Admit that You’re Wrong
People are defensive of their faults, we don’t like admitting our mistakes, it hurts our ego but when we come across someone who does admit we go whoa, it is an admiring quality, it shows confidence, the willingness to improve, and honesty.
And this should be your approach.
According to the data by social psychologist Fiona Lee, customers are more trustworthy of companies that admit their strategic failure over those who blame someone else for the wrong.
One thing that’s intrinsic to running a business is the complications, they are just part of it.
To resolve some of those businesses subscribe to ever so complicated ERPs. Does that help?
To some levels but the major issue still remains, only the face has changed. Now, it’s the ERP that’s complicated.
To end this, we worked on S.I.M.P.L.E. the simplest enterprise system ever, not just an ERP but a refinement that is a complete business solution.
You won’t need ERP, CRM, HRM, Tally, etc. It covers all aspects of a business and is made for you.
It is designed specifically for specific industries.
Source: Daily bits of – Hacking Human Nature For Good, social triggers