FOMU > FOMO

FOMU > FOMO.

This is a secret only the elite salespeople know and use it to their advantage to close more deals. But in this incredible episode, Lenny Rachitsky and Matt Dixon open-sourced this secret for everyone. Absolutely loved this episode for the sheer clarity it brings to a complex sales process. Matt is the author of the best-seller Challenger Sales (which sold 1 million copies) and the new book The Jolt Effect. The scale of his latest research is massive. Here's Matt talking about it.

"We recruited several dozen companies across industry and around the world into a large global study, and we collected two and a half million sales calls and studied them with a machine learning platform at scale." They uncovered that most deals are not lost to competition but to indecision.

"40 to 60% of them will be ultimately marked as closed loss, no decision. That's actually, I think that number is actually on the rise, especially in places like SaaS and the broader tech sector over the past year and a half, but that's a really painful thing." Now, this is not something new. Salespeople understand this and are trained to dial up the FOMO in buyers to tackle this situation. The playbook goes something like this.

"The first thing they do is they say, 'Lenny, remember the demos and the proof of concept trial, how excited you were and those benefits, you got to pay for it. You're not going to get all those great benefits for your organization unless you sign the agreement.'... If that doesn't work, I'll try to kind of scare you into action by dialing up the fear, uncertainty and doubt..." But here's the kicker - this approach is backfiring spectacularly. Dixon's research reveals a staggering statistic.

"87% of the time when salespeople do that dial up the FOMO in those moments, especially with a customer who says that they're ready to move forward, but they start to backpedal and waffle and waiver and become hesitant dialing up the FOMO backfires 87% of the time. In other words, it increases the odds, the deal will be lost to no decision." Why? Because we've been fighting the wrong enemy. "...it turns out those are only 44% of the no decision losses, 56% of no decision losses are customers who want to buy but can't buy because they're stuck in this no man's land of indecision, and that indecision itself stems from their fear of failure." "...knowing that every human being, including all of your customers, who I include in that definition of human beings are definitely afraid of being personally blamed if things go wrong. The FOMU actually matters more than the FOMO." Enter the omission bias - the real culprit behind lost deals.

"The omission bias is, if you get down to it, is the fact that people don't want to be blamed for making decisions that lead to a loss... We made a decision, we picked a vendor, we executed a contract, and then something bad happened. It turns out that in the human mind, people are okay with missing out. They are not okay with messing up and being blamed." Here are three examples from Matt of how omission bias manifests in the sales process: ??Configuration anxiety: "The first one is have I made the right choice? I know I want to work with this vendor, but did I configure the solution of the proposal the right way?" ? Post-purchase information: "The second thing that customers worry about in their second fear of failure is that they're going to learn something after the contract is signed that's going to make the decision look like not such a great decision." Imagine you sign up with a new supplier, sign the contract and then Gartner releases a new Magic Quadrant report, showing them as laggard. Now everyone in the org is looking at you in disbelief - do you even know your job? Did you do any due-diligence when signing up these guys? ??ROI concerns: "The third one is that the customers are worried they're just not going to see the ROI. They're not going to get the full benefits. You might project for them a 5X improvement in sales productivity. What if it comes in at two or three X and my name's on the agreement and the CFO comes asking why we didn't get the benefits we thought?" So, what's the solution? Matt Dixon proposes the JOLT method. Here's what he says. "The JOLT, it's an acronym... The first thing is we've got to judge their level of indecision, we've got to figure out what we're dealing with. The second thing is we've got to offer a recommendation. The third thing is we've got to get them to stop doing endless research and start trusting us and limiting, we call limit the exploration, and the T is we've got to the derisk the deal. We've got to take some risk off the table, and we establish that safety." You should check out the full episode to go deep into the JOLT effect (highly recommended), but here's one technique that stayed with me - "pings and echoes."

"We found a technique, this is actually not in the book, we found it after we wrote the book, called pings and echoes that high performers use... The way this works is that a salesperson will try to articulate but in a non, not to out the customer, but to get confirmation or refutation, if you will, that what they've articulated is actually a concern for their buyer." Here's an example of how to put pings and echoes into action. "What I might say to you is, 'Lenny, I'm just curious if we could calibrate here for just a moment, and there's a reason I'm asking this, which is a lot of the customers at this point in our process of working together, they get almost overwhelmed with all the options, and look, I probably made this worse. We're very proud of what we do. I want to show you, paint the art of the possible, but I also know if we're going to do business together, you told me right away budgets are limited and you can't have it all. You've got to decide what's nice to happen and what's need to happen. I'm just curious, are you and your team clear on what would be in and out of the proposal?" This approach allows the salesperson to address potential concerns without putting the customer on the spot or making them feel inadequate.

Check out the episode here: https://www.youtube.com/watch?v=cUzEgRetmC4