The Hidden Forces Shaping Your Sales Success

We’ve all had sales that went smoothly while others hit roadblocks. Sometimes it’s simply timing (e.g. you got into the deal too late to really be considered), or a re-org. Other times someone new came in and worked to kill the deal, since it didn’t start with them. There are a million reasons why a sale can turn stale. While we can’t control when the buying organization chooses to do a re-org, multithreading relationships inside the client’s organization helps. There are also many ways to help turn around a deal, or help a great deal close smoothly and successfully.?

Moving a deal through to close is more than just luck or skill. In my previous post I explained the Perception Formula: Perception = f(Heuristics, Hormones, History). This simple equation can help you understand why people buy and how to improve your sales approach.

Understanding the Perception Formula in Sales

The Perception Formula shows us that three main factors affect how people make choices: mental shortcuts, body chemicals, and memorable past experiences. When we understand these elements, we can better grasp how customers decide to buy.

Dr. Robert Cialdini, a leading expert in the science of influence, states, "People's ability to understand the factors that affect their behavior is surprisingly poor" (Cialdini, 2007). This insight highlights why it's crucial for salespeople to understand these hidden forces.

Heuristics: The Mental Shortcuts That Drive Decisions

We all use quick thinking tricks (aka heuristics) to make fast choices, and this stays true in corporate environments. For example, when looking for a solution to an internal issue most enterprises will choose to purchase whatever platform Gartner or Forrester states is the leader in the space. In sales, these shortcuts can help or hinder your efforts.?

One of the most important heuristics in enterprise sales is the "social proof" principle. As Robert Cialdini notes, "We view a behavior as more correct in a given situation to the degree that we see others performing it" (Cialdini, 2007). The example above of Gartner and Forrester rating a platform as a leader is a great example of social proof. Another is repeatedly seeing a company at industry leading conferences. Seeing the company year after year shows a level of stability in the company's finances.?

Social proof can be used in multiple ways to help your prospects feel more at ease with the idea of working with you. We often showcase case studies and testimonials from respected companies in our prospect's industry. This approach leverages the social proof heuristic, potentially increasing confidence in our solution.?

Another important heuristic in enterprise sales is the "authority principle." Coming from the Milgram experiments in the 1960’s, this heuristic shows that “that individuals tend to obey authority figures, even when asked to perform actions that contradict their moral beliefs.” Fortunately for us, software sales don't require anyone to go against their moral beliefs in order to purchase. Converting the authority principle into a business context, this could mean highlighting our company's expertise, industry awards, or thought leadership. This goes well with a consultative approach to sales.?

The "anchoring effect," described by Nobel laureate Daniel Kahneman, is also relevant in enterprise sales. Kahneman states, "The anchoring effect is the disproportionate influence on decision makers to make judgments that are biased toward an initially presented value" (Kahneman, 2011). Which is basically saying, state your number first and make it high, thus anchoring the negotiation to your advantage.?

One great way to anchor high is to ask, “...what the cost of doing nothing” to your prospect. By presenting your solution with a clear value proposition, you set a favorable anchor. Begin by discussing the industry-wide challenge your product addresses and the typical cost of inaction, before introducing your specific solution and pricing.

By understanding these heuristics, you can present your enterprise solution in ways that align with how decision-makers naturally process information and make choices. Remember, the goal isn't to manipulate but to communicate your value proposition in the most effective and relevant manner.

Hormones: The Neurochemical Influences of Buyer Behavior

Our body's chemicals are often triggered by our internal heuristics and affect how we make choices. When people feel stressed, they're less likely to take risks. The cybersecurity industry runs on a message of de-risk. “Don’t get hacked, use XYZ”. Using examples of hacked companies and the financial consequence of the hacking makes paying for a platform cheap in comparison.

Cortisol, often called the stress hormone, is often triggered while selling cybersecurity, anything regulatory (e.g. ESG), and insurance. Dr. Daniela Kaufer, a neurobiologist at UC Berkeley, explains, "Chronic stress can affect a person's ability to make decisions and assess risks" (Kaufer, 2013). High cortisol levels in your customers could make them more likely to purchase something that allows them to de-risk and sleep better at night. On the other hand, if you’re launching a new product with no previous precedent your buyer may be more hesitant to purchase, especially if they perceive any risk in the transaction.

Dr. Paul Zak has studied the role of oxytocin in trust and decision-making. He found that "Oxytocin is responsible for trust, empathy, and relationship-building" (Zak, 2011). This hormone plays an important role in sales interactions. Everyone wants to work with someone they trust.?

What do your prospects need to feel in order to move forward with your product?

History: How Past Experiences Shape Future Sales

Every time someone buys something, it affects how they'll approach future purchases. If they've had positive experiences, they'll be more open to buying again. But negative encounters can make them hesitant. These negative experiences don’t have to be from you, they could be from another company - which means your buyer can already have negative attributions to your industry which you need to overcome.?

This concept aligns with the psychological principle of conditioning. As psychologist B.F. Skinner noted, "The consequences of an act affect the probability of its occurring again" (Skinner, 1953). In sales, this means each interaction you have with a prospect is shaping their future buying behavior.

The way around this is to find out about their past experiences with products like yours. This research can help you understand their concerns and address them proactively.

Dr. Elizabeth Loftus, a cognitive psychologist known for her work on memory, focuses her research on the concept that memory is malleable, and many factors can change what a person recalls. (Loftus, 2005). This malleability of memory means that how we frame past experiences can influence a customer's perception of them.

Putting It All Together

By using the Perception Formula, you're not just selling – you're understanding how your buyers think and decide. It's about making it easy and natural for customers to say Yes to your offer.

Good selling isn't about tricks or pressure. It's about understanding people and showing how what you're selling fits what they need and want. When you master this approach, you'll likely see more people agreeing to your proposals.

Daniel Pink, author of "To Sell Is Human," argues that we're all in sales now. He states, "Like it or not, we're all in sales now... Whether we're employees pitching colleagues on a new idea, entrepreneurs enticing funders to invest, or parents and teachers cajoling children to study, we spend our days trying to move others" (Pink, 2012).

This perspective broadens the applicability of the Perception Formula beyond traditional sales roles. Whether you're in sales, leadership, or any position requiring persuasion, understanding these hidden forces will enhance your effectiveness.

Practical Applications: Perception Formula Recipes

Recipes are the implementation of the Perception Formula: Perception = f (heuristic, hormone, history).

Trustworthy = f(Authority Heuristic, Serotonin, Positive Past Interactions)

• Authority Heuristic: The tendency to comply with and believe those in positions of authority.
• Serotonin: A neurotransmitter that contributes to feelings of well-being, happiness, and emotional stability. It plays a role in regulating mood and social behavior.
• Recipe:?Showcase your company's expertise and credentials, create a comfortable, personalized, and thoughtful environment for meetings, and highlight successful past collaborations or case studies.

Worth the effort = f(Consistency Heuristic, Cortisol Management, Learning from Past Challenges)

• Consistency Heuristic: The desire to be and appear consistent with one's past behaviors, commitments, and beliefs.
• Cortisol: Known as the "stress hormone," high levels can impair decision-making and increase risk aversion.
• Recipe:?Remind clients of their past commitments and stated goals that align with your solution, address concerns calmly to reduce stress, and use past objections as learning opportunities to improve your approach.

Worth the investment = f(Anchoring Effect, Dopamine, Historical ROI Data)

• Anchoring Effect: The tendency to rely heavily on the first piece of information or number offered when making decisions.
• Dopamine: A neurotransmitter associated with pleasure, motivation, and reward anticipation.
• Recipe:?Present industry-standard metrics or costs first to set a reference point, highlight immediate benefits to trigger reward anticipation, and provide concrete examples of ROI from similar implementations.

The right choice = f(Social Proof, Serotonin, Past Decision Patterns)

• Social Proof: The tendency to look to others' actions to guide our own behavior, especially in uncertain situations.
• Serotonin: A neurotransmitter that contributes to feelings of well-being and happiness.
• Recipe: Share testimonials from respected industry leaders, create a sense of accomplishment at each stage of the sales process, and align your sales process with the client's known decision-making style.

Invest in a partnership = f(Reciprocity Heuristic, Oxytocin, Cumulative Positive Experiences)

• Reciprocity Heuristic: The tendency to reciprocate when others do something for us.
• Oxytocin: (As defined earlier)
• Recipe: Offer valuable insights or resources without immediate expectation of return, foster personal connections beyond just business transactions, and consistently deliver on promises to build a track record of reliability. Set anniversaries to remind the customer how long your history goes and how much you’ve accomplished in this time.

These recipes demonstrate how different elements of the Perception Formula can be combined to achieve specific sales objectives in enterprise contexts.?

Remember, ethical application of these principles is non-negotiable. As Cialdini emphasizes, "The proper use of the principles of influence is ethical, it's appropriate, and it's socially beneficial" (Cialdini, 2007). As your network is your net worth, burning bridges by manipulation doesn’t make for a lasting, thriving career.

In conclusion, understanding and implementing the Perception Formula can transform your approach to sales. By considering heuristics, hormones, and history, you can create more effective, customer-centric strategies that lead to better outcomes for both you and your clients.

What factors have you noticed affecting your sales success? Share your thoughts and experiences in the comments below!

#SalesSuccess #PerceptionFormula #SalesStrategy #LeadershipInsights

References:

• Cialdini, R. B. (2007). Influence: The Psychology of Persuasion. New York: Collins.
• Kahneman, D. (2011). Thinking, Fast and Slow. New York: Farrar, Straus and Giroux.
• Skinner, B. F. (1953). Science and Human Behavior. New York: Macmillan.
• Loftus, E. F. (2005). Planting misinformation in the human mind: A 30-year investigation of the malleability of memory. Learning & Memory, 12(4), 361-366.
• Pink, D. H. (2012). To Sell Is Human: The Surprising Truth About Moving Others. New York: Riverhead Books.

Thank you to Andy Jolls , Chris Georgiev , and Jessica Michael for giving this post a read-through before I hit publish.