Why You Should Put All of Your Cards on the Table When Selling

Research shows that cynicism among buyers runs high. In fact, it runs so high that most buyers walk away from transactions that would benefit them. As one set of researchers concluded, “buyers’ disbelief was costly.”

The Results

The study, published in Judgment and Decision Making, examined how buyers behave in two different scenarios. In the first setting, the buyer engaged with an in-person seller. In the other scenario, the buyer interacted with a computer.

When communicating with a computer, the buyers made the “value-maximizing decision” 79 percent of the time. That is, most buyers did what was in their best financial interest.

However, buyers displayed different behavior when working with a person.

The presence of a seller made buyers suspicious of seller-centric behaviors. In this setting, buyers made the value-maximizing decision only 45 percent of the time. More than half of the buyers walked away from a deal that favored them.

The computer was better at closing the sale than the person.

The Hidden Card Game

Researchers designed the study by using a simple card game. There was a deck of cards marked consecutively from 1 to 100. The seller pulled two random cards from the deck. The buyer was permitted to see the card with the lower value of the two. Additionally, the buyer knew that they were seeing the lowest value card of the pair. The buyer had the option to spend 100 “experimental dollars” to buy the two cards. The value of the two cards was the sum of their two numbers.

The academics focused on the scenarios in which the expected value of the pair would be higher than the 100 experimental dollars spent to acquire them. In these instances, the buyer would be better off buying the cards. However, with a human seller present, most buyers walked away. They left money on the table.

Moreover, the buyers were less likely to buy from a person than a computer, even “when information about the card is revealed that suggests the card is valuable.”

The Persuasion Context

The researchers wanted to know why buyers behaved as they did. The researchers had a hunch that “a persuasion context seems to draw more attention to the persuader’s motives and makes buyers act more conservatively.” The buyers knew that they were being sold to, and that made them hesitant.

The buyers tried to assess the if the seller was trustworthy or untrustworthy. However, they were unable to do so effectively because the mere presence of the seller made the buyers cynical.

What is so surprising is that the buyers didn’t just dismiss the sellers’ communication as “cheap talk,” as the researchers call it. If the buyers had ignored the sellers’ talk, they likely would have purchased the cards more often than they did. Instead, buyers were cynical. They believed that the seller was making statements designed to benefit themselves. Some buyers remarked, “I think you’re lying.” The sellers, it seems, unintentionally pushed the buyers away.

In contrast, the scenario in which buyers engaged with a computer involved no communication. Therefore, the buyers were less likely to believe that the transaction only favored the seller.

The researchers still weren’t satisfied. They wanted to reveal the specific factors that made buyers cynical of sellers. So, they devised a second experiment.

Measuring the Real Value of Talk   

In the second experiment, researchers once again set up two scenarios. In the first, a seller and a buyer played the card game described above. In the second, new scenario, a buyer and seller played the game in silence. This was the “no-talk” version of the game.

In the "talk" situation, 55 percent of the buyers who were presented with a value-maximizing deal purchased the cards. In the no-talk situation, 75 percent of the buyers presented with a value-maximizing deal bought the cards.

“Interestingly, the sellers were not aware of this detrimental effect of communication on buying,” explain researchers. Most of the sellers (77 percent) in the “no-talk” scenario believed that they could sell more frequently if they had been permitted to talk.

This second experiment shows that the problem is not due to whether the seller is a computer or human. After all, the “no-talk” buyer-seller scenario resulted in the same rate of selling as the buyer-computer scenario. The problem is communication.

So, what are sellers to do? The researchers have a few suggestions.

Overcoming the Buyer’s Cynicism

Cynicism kills deals. It encourages buyers to retreat from a transaction that is to their benefit and has more value than what it costs. Here’s what the researchers think sellers should do:

1. Reduce Informational Advantage

The researchers suspect that communication prevented selling when it reminded the buyer that the seller possessed more information. The authors call this “informational advantage.” They cite studies showing that communication worked when both parties held the same information. Sellers should share information and make themselves an open book.

2. Focus on Relevant Information

Sharing information is not enough. The information must be relevant. The content of the communication is key to success. Studies illustrate that communication builds trust and cooperation when it's relevant to the problem.

3. Acknowledge the Limitations of Perspective

Most sellers made the reasonable decision to take the buyers’ perspective. While admirable, this decision may have limited their ability to sell. The reason: “sellers who tried to take the buyers’ perspective misjudged them to be more positive towards persuasion attempts than they were.” When considering the buyers’ perspective, sellers should remember that their insight is limited.

All three of these suggestions are summarized in one takeaway: put all of your cards on the table.

Sellers are more likely to succeed when they reveal all of their information and intentions. Withholding only destabilizes the sale. Buyers often start from a default position of cynicism. Sellers must erode this impasse and earn the buyers trust. Sellers who assume that they have the buyers’ trust will face failure.

Lay out your cards.