The Cost of Inaction: Reversing the Effects of FOMU

It’s rough riding out there in Sales. There is nervousness in businesses surrounding making an investment. We’ve seen changing macroeconomic conditions force businesses out of the growth-at-all-costs mindset and into a more conservative stance. Cash ain’t cheap and as a result, businesses are more focused on protecting what they currently have and conserving cash flow. All of this means that ROI messaging, which was once effective, is no longer.?

I’m sure you’re familiar with the “sell me this pen’ scene in Wolf of Wall Street. If you’re not, the majority of people when asked to sell something will talk about how great it is, getting caught up in the features and functions.

In the film, there’s a scene where Brad, when asked this question responds “Write your name down on that napkin for me” - creating a demand.

While this is moving focus to the outcome - the solution to the problem - In the current climate leading with value isn’t enough. Because we’re salespeople, we are quite literally compensated on how many people we can move to the next stage whatever that may be,?so in our buyer’s eyes we are biased; we have an ulterior motive. So why would they trust us?

In fact, HubSpot found that only 3% of people trust salespeople?and Miller Heiman found that only 23% of B2B professionals think Salespeople are trusted resources for solving business problems.?

This is all further heightened given the state of the economy. At the best of times, our buyers don’t believe the value that we’re trying to sell to them, now they don’t even listen to it, they drown it out!

The Fall of ROI

Value lead messaging was so effective because it played on buyers’ FOMO (Fear Of Missing Out). Particularly as other players in our buyers' space, their competitors, were growing rapidly (particularly in the tech) and they wanted to ensure that they could stay competitive. This bred the growth-at-all-costs mindset. Businesses were more willing to take a risk on an investment that may be great but also may fall flat on its face; because the risk of falling behind the competition seemed far worse.

…And as such sellers would encourage people not too miss out on this opportunity to drive enhanced value.

However, given the current climate, people are nervous about making an investment, Why??

Well, because if it all does go wrong their head is on the chopping block. They are experiencing FOMU (Fear of Messing Up). With the underlying “war-time” narrative when resources are bare and laying people off has become a rather worrying trend (particularly in the tech)… businesses are much more inclined to get the 6 figure salary off their wage bill.

Because of this, people are opting to stick with the status quo and deals are lost to inaction. As a result, In the last 2 years, we have seen close rates drop by 42% (winning by design)?

In the Jolt Effect, Matt Dixon and Ted McKenna found that out of those deals that we’re lost due to inaction:

44% was as a result of a preference for the status quo (in other words they would rather not take the risk to make things better, out of fear that it would have an adverse effect)?

56% customer indecision (people weren’t able to justify the risk)

So what can we do?

ROI —> COI

Well, if we want our message to resonate then we need to align it to how our buyers are thinking.?

Instead of focusing on the Return on Investment, talk to the Cost of Inaction (the missed opportunity cost). Our buyers were likely already thinking this way during the Growth at all cost phase (How far will we fall behind competitor x if we don’t do this). But by focusing on the Cost of Inaction, we are flipping the FOMU (Fear Of Messing Up) on its head. Rather than buyers having FOMU about the investment in a new solution. It’s creating fear/uncertainty about their current state.

“If they don’t do X what impact is that going to have on their job security and their team”

“If that number Y isn’t hit, who will that impact”

“What’s the consequence of not doing Z”

The Science…

The Cumulative prospect theory (Kahneman & Tversky) found that we are 2x more likely to avoid a loss than make a gain. Simply, people are more motivated to not lose than they are to win!

The University of Pennsylvania ran a study with 281 adults suffering from obesity. They were set the target of walking 7000 steps a day.

They were split into 4 groups:

Group 1 - Goal Incentive -? If the goal was met, they were given $1.40

Group 2 - Lottery Incentive - If the goal was met, they had a chance to win $1.40

Group 3 - Loss Incentive - If the goal was not met, they had $1.40 taken from them

Group 4 - Control Group - No incentive?

Group 3, with the loss incentive, was the winner. They hit their goal 50% more than any other group.

…And we’ve all likely experienced something similar:

“Pay Me ￡500 and in the future, I could give you ￡5,000”

Vs.

“Pay me ￡500 and in the future, I could prevent you from losing ￡5,000”

The first is gambling or maybe investing in the stock market.?

The second is Insurance. Almost everyone has some form of insurance, yet not so many gamble.?

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If you’re looking to align your messaging to the COI (Cost Of Inaction) a good first step is to just reverse engineer your current ROI/value-based messaging.

If you help businesses to book 4x more net new meetings and generate 4x more SQOs, then the messaging would focus on their current state only generating 1/4 of the pipeline that they could be generating.

…Given that the majority of businesses (that I speak to, at least) have a major pipeline gap then this should reverse the effects of FOMU and help to increase response rates and the amount of conversations that you are having with your ICP.?