As every salesperson knows, purchasing decisions are rarely made on logic and math alone. When you are selling something to any individual or group of people, emotion also plays a significant role. Understanding this very human side of selling is what we call the psychology of sales.
Over the past few decades, quite a lot of research has been conducted on sales psychology. Sometimes, the results of these studies have confirmed what we know; in other cases, they have come up with completely new answers.
In this post, we’re going to explore some of the key lessons that science has provided in recent times — and discover how you can implement these principles to win more deals.
What Is the Psychology of Sales?
In simple terms, the psychology of sales refers to the mental side of purchasing decisions. Experts in this field try to figure out what persuades someone to buy a product or service — and what is likely to turn them off.
Top corporations have always paid attention to sales psychology. But thanks to digital analytics, tracking buyer behavior is now much easier than it was in the pre-Internet age. As a result, the psychology of selling has progressed massively in the past 20 years.
Today, understanding your customers and their buying decisions is essential if you want to be competitive in any industry.
Why Sales Psychology Matters
There are many potential benefits to embracing sales psychology.
For instance, learning about the buying habits of your customers can help you predict when leads might be ready to buy.
Amazon does this all the time. The e-commerce giant stores data on customers who have previously moved address or had a child, and uses this information to offer relevant product suggestions to customers who are entering a similar phase.
Lessons from sales psychology can also help you to speed up the buying process, earn more referrals, and reduce the amount of time that reps spend on securing sales.
You may even see increased sign-ups, higher spends, and improved customer satisfaction.
And the best part? None of this requires any major investment.
The Key Principles of Sales Psychology
All the way back in 1984, Professor Robert Cialdini released the book Influence: Science and Practice. This international best-seller brought business psychology into the limelight for the first time, and laid out some key principles.
Later in the same decade, Brian Tracy used emerging research to write his own take, and called it The Psychology of Selling: Increase Your Sales Faster and Easier.
Both books are worth reading, because the principles they cite are still valuable today. However, we have learned a lot more about sales psychology since the 1980s.
Here is a more up-to-date list, with actionable tips that can help push your sales numbers higher:
1) Buyers Are Humans, Too
When you work in sales, it’s easy to think of buyers purely in terms of numbers — how many sales can I make, how much can I make on each sale, and so on.
However, the whole field of sales psychology is based on the fact that buyers are very human.
People make purchases for many different reasons, some of which might seem completely illogical. The needs of new customers will vary, and some will only say yes if you deliver your pitch from the right angle.
For this reason, understanding every new lead should be your top priority.
Simple analytics can reveal a lot about a buyer, while sales intelligence platforms use live data to predict the best approach for each customer.
If you have the time, it’s also worth doing a little background research. Using a tool like Datanyze, you can quickly collect key information for any B2B lead from their LinkedIn profile.
Once you have a clear picture of who you are selling to, the next step is building rapport. If someone likes and trusts you, they are far more likely to do business with you.
Even if you’re going for a hard sell, it’s worth taking the time to strike up a conversation, rather than repeating lines from a template like a robot.
A little humanity goes a long way in this business.
2) Social Proof Wins Hearts and Wallets
Here’s a fun fact: only 3% of people believe that sales reps are trustworthy. If you’re going to win over the other 97%, you will need some help.
This is why including social proof in your sales pitch is so important.
Social proof can be defined as any kind of content from a third-party source that backs up your claim. Common examples include online customer reviews and ratings, case studies, feature articles by respected publishers, customer testimonials, and quotes from experts.
The idea behind utilizing social proof is that you’re saying to potential customers: “Don’t just take my word for it.” And the statistics show that it works.
According to Bizrate Insights, around 91% of buyers read online reviews before making a purchase, and almost one third regard ratings and reviews as the most important factor in their decision.
In other words, embracing social proof is really important if you want to maximize your sales.
3) Friends Can Unlock the Door
While expert opinions can convince someone to make a purchase, the reality is that most buyers are more likely to listen to a friend, a family member, or a co-worker.
It comes back to that key ingredient: trust. Surveys show that, while social proof still works, the amount of trust people put in online reviews is slowly diminishing over time.
In contrast, people still put a lot of trust in direct referrals from personal and business connections. Statistics from Nielsen show that 92% of consumers trust referrals from people they know, and people are 4 times more likely to purchase a product or service when they have been referred by a friend.
So, what does this mean for your business?
Well, it means you should probably start asking for referrals. It might sound kind of obvious, but it’s surprisingly rare among sales teams.
You could also consider introducing a referral scheme, offering discounts to people who refer someone they know. This is an excellent way to make your customers happy and create a never-ending stream of qualified leads.
4) Scarcity Is a Powerful Lever
If you asked most sales professionals to name the hardest part of their job, they would probably say prospecting. But second on the list would probably be closing sales.
The truth is that people don’t like making big decisions, or even small ones.
The psychological principles in play here are almost exactly the same as for procrastination. We would rather just kick the can further down the road than sit down and really think about the whole thing.
The most successful sales teams are really good at stopping this endless cycle from repeating. One key technique they use is the creation of scarcity. Or at least, the perception of it.
FOMO (aka fear of missing out) is a strong emotion. Whether it’s a great party or a limited-time offer, we don’t want to regret passing up a golden opportunity.
There are many different ways to build scarcity into your sales process. Running limited-time sales events creates scarcity of low pricing; selling limited edition items creates scarcity of supply.
Ask your sales team to highlight these points, and you should be able to induce that FOMO emotion quite easily. You could even build it into your web design, with countdown timers and live stock counters.
5) Simplicity Usually Wins
During that all-important closing phase, salespeople often start making multiple offers in the hope that one of them will be attractive enough to seal the deal.
This almost never works.
As we noted earlier, people don’t like making difficult decisions. By adding more options into the mix, you’re simply making the task harder. Even if they are interested in your original pitch, they may begin to reconsider if you start providing alternatives.
This is why research is important. If you understand what the customer needs before you make that first offer, you shouldn’t have to alter your pitch down the line.
We’re not saying you can’t be flexible here. Sometimes, you need to adjust your offer to meet the specific requirements of the client.
But when you’re putting together your sales strategy, try to keep things simple. Avoid creating a million different product variations, and go into every sales conversation with a clear idea of the best offer for that customer.
6) Give Them Something, Get Something Back
One of the key principles of sales psychology that Robert Cialdini laid out in Influence was reciprocity.
If you give most people a free gift or do some other act of kindness, they will instinctively see you in a more positive light. And many individuals will actually feel slightly indebted, like they need to give you something in return. Successful salespeople use this psychological hack to their advantage.
To exploit this technique yourself, start giving something up front to new customers. For instance, you could provide access to free learning resources, book in a free consultation, or offer a free trial. In the B2B world, you might even consider sending over a gift box of treats.
To feel the maximum benefits of reciprocity, you need to make sure that your free gift is highly relevant to the lead. If your customer perceives that you are trying to buy them off with a generic gift, the reciprocity effect will simply crumble in your hands.
On the flip side, highly targeted generosity is usually rewarded with a much improved conversion rate.
7) Allow Customers to Make Their Own Comparisons
During the decision-making process before a purchase, many of your potential customers will probably make a comparison between you and your competitors.
In sales psychology, this is known as an implicit comparison. It’s totally fine. In fact, there is a strong chance you will benefit from the comparison if you are making a good offer.
But whatever you do, don’t try to make the comparison yourself.
Explicit comparisons (to use the technical term) are almost always counterproductive for sales.
Some clever people at Stanford actually studied this topic through the medium of eBay auctions. They found that shoppers naturally compared similar listings, and would judge the value of a particular item based on the pricing of competitors — even if that was higher than expected.
However, when shoppers in a different group were specifically told to look at the differences in price, they became a little more cautious…suspicious, maybe.
They took longer to make an offer, and would submit lower bids than the group that made comparisons organically.
The moral of this story: if you want to challenge your competition, allow buyers to judge for themselves.
Before Psychology Comes Targeting
As we have discovered, sales psychology is a deep topic with many core principles. Applying the tips we have mentioned above should help you move leads through your funnel more easily, and help you close deals more efficiently.
However, psychological techniques can only take you so far. If you’re not targeting the right people in the first place, no amount of mental hacks will help you salvage a deal.
For this reason, it’s worth making sure that your targeting is spot on before you start thinking about psychology.
It should begin with your marketing strategy. In the lead generation phase, try to weed out unqualified prospects before they reach your funnel. Make sure your content is aimed at your ideal target audience, and use gated lead magnets so that prospects have to show some commitment up front.
Once you enter the sales process, spend some time learning about your leads — whether through automated data collection or individual research. The latter is particularly important if you are trying to sell premium B2C products or B2B services.
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