Psychological Biases: Why They Matter When Closing Enterprise Deals
What’s the ONE thing you really want someone to do when they visit your website?
The answer is any action—you want every bit of traffic to be pushed into the funnel and, ultimately, converted to a sale. You want every visitor to sign up for the newsletter, download an e-book or, better still, book a demo.
The last bit is the most crucial for sales teams. More interest in demos means more qualified leads, and more qualified leads mean higher chances of conversion.
Sounds straightforward, but in enterprise sales, the buying process is not as linear as it may seem.
Unlike self-serve products with preset prices, enterprise packages usually have customized pricing, leading to a lot of back-and-forth between teams and thus a longer, more involved sales cycle.
There are umpteen factors that can make the deal sway in either direction. After speaking with a lot of sales experts over the years, I have come to conclude that enterprise deals are often influenced by factors that aren’t always rational or logical.
At first, that may sound like bad news for sales professionals. But we can actually leverage these factors to close deals, by understanding psychological biases and their impact on enterprise sales.
Psychological Biases: Just Another Buzzword?
According to Psychology Today, a bias is a “tendency, inclination, or prejudice toward or against something or someone. Whether positive or negative, such cognitive shortcuts can result in prejudgments that lead to rash decisions or discriminatory practices.”
But do these so-called “psychological biases” really exist? Is there any research backing this idea? Legit question! There sure is.
Daniel Kahneman, psychologist, and author of Thinking, Fast and Slow, won the 2002 Nobel Prize in economics for studying human judgment and decision-making under uncertainty. His original study and research on this topic has revolutionized our assumptions about decision-making, forming the basis of biases as a concept.
Likewise, University of Chicago economist Richard Thaler won the 2017 Nobel Prize in economics for his contributions to behavioral economics and the study of decision-making. His study confirmed that humans have flaws and biases that restrict us from making rational economic decisions.
Now that we’ve established that the concept of psychological biases is more than just pop psychology, let’s look at some common biases and how you can use them to close enterprise deals.
5 Psychological Biases That Can Influence Enterprise Sales
Not all psychological biases are relevant to sales, so let’s look at five that are especially meaningful for sales teams.
Yale University psychologist Stanley Milgram conducted a famous experiment that forms the basis for authority bias. His conclusion, in short: we listen to people in charge. We attribute great importance to the opinions or commands of authority figures.
From a sales standpoint, authority bias means your audience is more likely to listen to you—and ultimately buy from you—if they perceive you to have authority or credibility.
One of the simplest ways to leverage this authority bias is to display solid social proof on your website– the place your prospect is bound to visit. Proving your credibility is becoming even more important for B2B businesses—according to a report by SAP, more than two-thirds of B2B buyers wait longer to initiate contact with vendors than they did two years ago because they are doing more research themselves.
Testimonials or case studies from your best clients are crucial for convincing buyers of your credibility. Here’s an example of Vidyard using authority bias to their advantage by showcasing testimonials on their pricing page:
Unlike authority bias, confirmation bias is not one you want to leverage. It is one you must learn to overcome.
For many enterprise sales teams, the first touch takes the form of a call. During this opening call, the account executive aims to understand the prospect’s needs and offer a solution that suits their business.
Unfortunately, sales professionals often approach these calls with a mind that’s already made up, offering solutions that they assume are the best, rather than what’s actually best for the prospect.
That’s confirmation bias—a tendency to favor our existing beliefs and attitudes—and it can actually keep you from closing a deal.
How can we ensure that this bias doesn’t get in the way of an enterprise sale?
Simple: Ask your prospects open-ended questions. Let them speak candidly about the problem they are facing and what they expect from your product. And listen to what they say before offering a solution. When you do so, you’ll be able to clearly see their pain points, and will be better equipped to suggest a customized solution, and design a sales proposal that matches their expectations.
You know this one—the bandwagon effect is our tendency to change our opinions or actions in order to follow the crowd. Think about all the times you’ve decided to root for a certain team, or check out a new book, or wear a particular style of clothing because you saw other people doing it.
How can you use the bandwagon effect to help you close enterprise deals? One way is to display on your website how many satisfied users you have. By revealing that a lot of other companies trust your brand and invest in your product, you’ll make it easier for prospects to do the same.
Hootsuite, for example, smartly shares that more than 800 Fortune 1000 companies use their service:
That’s pretty convincing, isn’t it?
This tactic can also be used as a selling point during offline negotiations, especially when the potential buyer has explicitly mentioned a competitor. Talk about the number of successful customers you already have—especially well-known brands—and the results they’ve achieved by using your products. And if you’re able to favorably compare numbers with your competitor, do so!
Humans react to choices in different ways depending on how the information is presented to them.
Here’s a good image to illustrate what I mean:
Which yogurt brand would you go with? If you’re health-conscious, chances are you’ll pick the 80% fat-free version. But in reality, there’s no difference between the two yogurts—it’s the same message, just framed differently.
Enterprise sales teams can use the framing effect in a couple of ways:
- Frame your offer in a way that makes it hard for the prospect to ignore. For example, inject a sense of urgency into your negotiations. Offer sweet deals (discounts, coupons, etc.) if they close soon, or stress on the limited availability of a discounted price.
- Frame your offer to highlight how your product or service is better than your competitor’s products. A good example of this can be found on the Appcues website. Appcues is a user engagement tool, so it is essential for them to offer high-level support and SLA to their buyers. The company knows that. That’s why their enterprise landing page does a good job of highlighting both those key aspects.
“Birds of a feather flock together”—no doubt you’ve heard that statement a few hundred times. That’s because it’s true. We are naturally drawn to people who share our interests and values. This is called the likability effect.
Now, you can’t expect every prospect to like you, but by introducing people or companies that share their goals or pain points, you can invariably make potential buyers like your product and tilt the deal in your favor.
One way to achieve this is by showing real, happy customers on your website rather than using stock images. Include photos in your case study articles, or present case studies as videos. Here’s an example from the Wootric website:
Remember: 84% of B2B decision-makers start the buying process with a referral. It’s possible that a prospect will see a brand that they already have a relationship with on your website, and will feel more inclined to sign up.
When it comes to enterprise sales, a lot of the decision-making happens earlier than you think. More than 50% of buyers today invest in research—gathering information from third-party sources, reviews, social media, and from conversations with peers before they even show interest in your product.
Selling to such a customer is difficult, but by understanding the psychological biases inherent in the sales process, you can empower your sales team to excel at negotiations and close enterprise deals faster.
Which psychological bias resonated the most with you? Have you ever incorporated them in your enterprise sales process? Let me know in the comments below.
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