9 New Ways to Nudge Your Customer to Buy

Figure 1: 9 New Ways to Nudge Your Customers to Buy

Why Won’t The Buyer Go Faster?

Sellers are often frustrated by the speed of the buyer. The problem is obvious – they go too slow!  It is not the sales persons fault.  The seller has clearly analyzed needs, defined the optimal solutions and provided the information that is required (including ROI calculations and case studies).   Yet the buying decision is moving at a snail’s pace.

The problem is that the information you are providing is not enough to nudge the buyer towards a decision. There can be many reasons why this happens and it may have little to do with the real merits of your sales proposal.  However, it could have a lot to do with how it is being interpreted by the buyer.

Why Information Alone Is Not Enough

Buyers are supposed to make decisions based on reviewing the information and analyzing the facts.   The process is meant to be rational and objective.  However the reality of how people decide is somewhat different.

There are inherent flaws in how people process information and make decisions (at least when judged from a rational economic perspective).  This has been the focus of much scientific research.

Human fallibility means that people are prone to; misread the information, be unduly influenced by others, or be swayed by impulse and emotion.   The research has listed the flaws very well.

More important still, it has started to show how they can be compensated for.  The result is a menu of ways by which the seller can adjust his, or her message to nudge the buyer more effectively towards a decision.  You can find out more about the science behind ‘nudging’ by clicking here (LINK).

The Power To Nudge 

Below is a list of 9 ways to nudge the buyer to make a decision – it is taken from a number of the leading books in the field of cognitive research (link to list).  We have taken some short-cuts in the explanations and simplified some of the concepts to help the seller apply it fast.

The objective is to help you to nudge the buyer by adjusting how your information is communicated and the choices presented to the buyer. So, have your message or pitch to hand as you review the list. 

1. Simplify The Choice

As humans we have a tendency to simplify. One way in which we do this is through assumptions, heuristics and rules of thumb. If something is complex and convoluted then it slows our thinking down.

The customer simply doesn’t have the time, or attention to pay attention to all the detail. The role of the salesperson is to help simplify the decision for the buyer.

Here are some implications for the salesperson:

- Know the assumptions and rules of thumb used by the buyer

- Understand the buyer’s appetite and requirement for information and protect against information over-load

- Help the buyer to focus on the most important stuff (including the results or outcomes required)

- Make sure there is a ‘helicopter’ or high level view available to the reader of any of the seller’s pitches or proposals (especially important for senior level executives)

- Help the buyer to present a simple and compelling message to stakeholders.  Ensure there is a big headline and a compelling elevator pitch.

- Provide the buyer with a menu (rather than a tonne) of information allowing him, or her to choose what is relevant to them at a particular time

How can your message be simplified for the buyer?

To find out more about the implication of decision simplification strategies on the part of the buyer click here.

2. Fuel The Buyer’s Optimism

In general people have a tendency towards over-optimism. They tend for example to overestimate their strengths and down plan their weaknesses.  It is called an optimism bias, or to use the less technical term ‘glass-half full thinking’.

There is a likelihood that the buyer sees himself or herself as above average, so the seller must appeal to the buyer’s positive self-concept. At the same time the seller can carefully help the buyer to more objectively benchmark themselves with others.

How can your message support a more positive (and yet realistic) self-evaluation?

The buyer may have an optimistic expectation regarding outcomes, or results achieved. The down side here is that the buyer may be overlooking some of the risks involved. At its simplest, the seller must help the buyer to envisage their future success while managing any risks involved.

How can your message provide the buyer with a more optimistic and yet realistic expectation of success? 

3. Preserve Some Element Of The Status Quo

Inertia can have a powerful hold over us. We often cling to what is familiar, shying away from what is new and unfamiliar.

The tendency is to stick with what we know, versus taking a chance on what we don’t know. That is until the tension for change becomes so great that the binds with status quo are separated. In the meantime it can result in a resistance to change and leave people settling too long for unsatisfactory situations.

The seller needs to understand how the various stakeholders are invested in the status quo and the risks associated with change.

What aspects of the buyer’s Status Quo should be preserved? 

Sellers must help the buyer to build a bridge between the past and the future. That means connecting with the good aspects of the buyer’s present status quo and bringing them forward into any proposed new solution.

The seller must help the buyer to build tension for change creating awareness of the limitations of the status quo and the prospects of ‘a better tomorrow’ with their solution.

Sellers make a virtue out of what is new and are quick to dispense with all that went before. However, the seller needs to gauge receptivity before telling the customer that what he /she has being doing up until now is no longer working.

Sellers often under-estimate the adoption challenges their solutions place on customers. They need to recognize that their solutions often require changes in terms of the buying organization’s broader ecosystem (e.g. process, system, structures, strategies etc.). In addition they need to help the customer to set realistic goals and plans around adoption/implementation.

Does the message protect at least some aspect of the status quo?

Helping stakeholders to be explicit about trade-offs is an important ingredient of embracing change. While sales pitches often focus on the benefits they often overlook what are people going to have to lose or give up.  Helping the buyer to recognize that some short term sacrifices may be required for longer term gain is important.

4. Ensure Your Message Fits With Existing Beliefs

Most people are stubbornly consistent in terms of their attitudes, as well as their behaviors. Indeed, psychologists tell us it is hard to be otherwise.

The technical term is cognitive dissonance and it is something that unknowingly de-rails sellers. It is the discomfort experienced by buyers when simultaneously holding two or more conflicting: ideas, beliefs, values or emotional reactions.

This can mean that the buyer:

- Interprets experiences to fit with our existing attitudes and beliefs

- Screens out information or ideas that are in conflict with our existing core beliefs

How we see ourselves (and the world around us) can be rigid and often sets the parameters of our thinking and our behavior. In short it is hard to act in a manner inconsistent with our self-concept, our values or beliefs.

What are the key beliefs (both positive and negative) held by buyers in relation to your solution space?

Changing attitudes and beliefs ain’t easy. Especially those that are wrapped up with how people see themselves, or their organizations. Yet we may not even be aware of beliefs and attitudes as they are often subconsciously held.

For the seller drawing attention to beliefs is first step in change. The role of the seller is to help the buyer to hold a mirror up to their needs and their beliefs.

Does your message resonate with existing attitudes & beliefs?

Sellers need to understand the strength and rigidity of buyer attitudes and beliefs and tailor their message accordingly.
For the seller some tension among the buyer’s existing attitudes and perceptions may be important to creating the demand for their solution. However if the tension is too great, then the seller’s message is likely to flounder.

5. Connect With The Buyer’s Emotions

As humans we are hard-wired for emotion. That means until computers start making buying decisions, emotion and impulse will have a role to play in how we chose products and suppliers.

Sellers must connect with the buyer’s emotions. There are as many as 48 different emotions ranging from pride to fear. They add context and depth to how even the most hard-nosed rational decision criteria is applied.

Does the message connect with the audience’s emotions?

The buyer’s interpretation of information, people or events related to the sale may be determined by pre-programmed emotional responses (often subconscious). For example an immediate like or dislike of a salesperson, or a gut instinct that something either does, or does not feel right.

Such emotions may be helpful or unhelpful, they may be rational, or not. Regardless, they are of interest to the seller.

Does the message sooth any negative emotions involved in the buying decision?

Understanding the buyer’s motivations and emotions is an important element of any fact-find, or needs analysis. Sellers need to ask their customer’s how they feel about the decision. However, eliciting the buyer’s true motivations requires that the seller gets closer than is normally the case – buyers are slow to open up to strangers.

6. Help The Buyer To Avoid Risk

Fear of loss can be a greater motivator than prospect of gain. That is a very old sales adage which research shows is often true.

The implication, as sellers know, is that people will pay to avoid the risk of loss.

However their calculation of the likelihood or the extent of the loss tends not to be very scientific. It can be easily swayed by emotion and other factors.

Do your customers suffer from probability blindness?

Cognitive research shows that most people are not very good when it comes to calculating risk. They are for example prone to overestimate the likelihood of rare events (such as a terrorist attack), while under-estimating the risk of more common ones (such as cancer). The implication is that sellers need to sell risk as effectively as politicians and newspaper headline writers.

How can your message emphasize the avoidance of risk or loss?

Sellers need to understand the buyers understanding of the risks involved in the decision, the likelihood of occurrence and the cost when they do occur. Then they need to help the buyer to re-calculate the risk.

7. Provide The Buyer With A Powerful Peer Comparison

We are social creatures – our success depends on our interaction with others. This is particularly the case in large organizations and it adds a political dimension to the decision.

In addition, we are continually looking over our shoulders to see what others are doing. This is manifest in what scientists call a ‘conformity bias’, where our decisions being swayed by our peers.

Does the message convey a powerful social comparison?

Social comparison can play an important role in our decisions. This in part explains the power of case studies, customer stories and sectoral reports for the seller.  Telling the buyer about what their peers are doing (and how they are using your solution) is probably the most effective way of telling them about your product.

Some customers and markets are influenced by a tendency of conform, or what is otherwise called a ‘herd mentality’. However, to leverage this effect it is important to know just what herd your customer belongs, or aspires to belong to.

Who does your customer compare themselves to?

Understand the buyer’s peer reference group is important, so ask your customers: ‘Who in your industry, or indeed in another industry, would you see as a good reference point for your business?’

8. Ensure Your Message Is A Familiar One

Familiarity is generally a good thing. Information and events that are recent and familiar have more power over us. It is not just that we are more likely to remember it, it goes further than that.

Familiarity with a company or solution can create a preference for it over the unfamiliar. This is something that scientists have shown can operate at a subconscious level.

How can the familiarity of the message be increased?

What is recent and familiar can also shape our perception of the likelihood of an event. For example the buyer who has just attended a webinar with real world case studies of network security failures, is likely to attach a higher probability to such a failure, than a buyer who has not.

If we know of, or can recall an event or a situation, then we estimate its probability as being greater. This is a key rationale for demand generation-type marketing. More fundamentally, it is a key reason for consistent repetition of the sales proposition or  marketing message over time. Familiarity is created with repetition, or to be more precise with marketing dollars.

Has your message been repeated enough?

Familiarity isn’t necessarily fussy about the source, indeed the real sources of information and experience can become blurred. Something we read or were told, can become part of our own personal experience. For example the buyer may end up telling a story in a meeting about a company that he, or she knows about, but may have long forgotten the source (i.e. a vendor case study).

Sellers must strive to ensure that all those involved in the buying decision have some level of familiarity with their company and its solution. They must also deepen their appreciation of marketing’s role in building marketplace familiarity for their brand.

If the seller’s company or solution is not in itself familiar, then it should be linked to other things that are familiar to the buyer.  This might be achieved by using analogies, metaphors, or parallels from other areas.

There is a flip side to the familiarity bias as there is to many of the others. If something is very familiar we stop paying attention to it. The challenge is to draw attention to what is new, but not so new as to be unfamiliar and inconsistent with past attitudes and experience. It is to add novelty to familiarity!

9. Focus Your Benefits On The Short-Term

We are often biased in favor of the immediate, putting short term gain ahead of long term consequences.

Scientists have shown that for some people the bias for immediate results/gratification is present from childhood. While adult maturity is often defined as the ability to make short term sacrifices for longer term gain, quarterly corporate performance targets often reinforce similar short-termist behaviors.

Are the benefits promised sufficiently close to hand, or short term?

As sellers when we present our ROI and Payback we must be aware that a far-away in the distance benefit is often worth less than a smaller more immediate one. As sellers we need to understand whether the buyer wants short term or long term benefits from our solution.

The above list condenses a lot of the science in the area of buyer decision making, so it is worth reviewing more than once.  However, the best way to get started in nudging your customer is to pick one or two of the above factors and apply it to your next communication with the customer.

Putting It To Work

Now you know a little about nudging and its power, how can you apply it in your sales interactions? Specifically, how many of the above nudges can you integrate into your pitches, presentations and proposals? 

References  

Ray Collis: 9 New Ways To Nudge Your Customer To Buy Retrieved February 20, 2014 from http://buyer.sellerinsights.com/2013/05/23/9-new-ways-to-nudge-your-customer-to-buy/

Dragan Simeunović
Senior Sales Consultant

What are the Buyer’s Next Step?

The Steps Your Prospect Will Follow

The likelihood is that 8 out of 10 of your prospects are following buying steps that have been heavily influenced by just one particular procurement model. For the seller that means that it can be used to improve pre-qualification, forecasting and closing. 

In the absence of full information on a prospect-by-prospect basis, the seller can refer to the industry standard – that is The 7 Step Strategic Procurement Model – for guidance. 

In the case of tight-lipped buyers the model can tell you what the buyer won’t. It can help you to:

• Predict the buyer’s next step. 
• Predict how long and complex the buying decision is going to be. 
• Predict how quickly a decision can be made. 
• Predict the type of information that the buyer is looking for. 
• More effectively qualify and forecast the opportunity. 

The Generic 7 Step Strategic Procurement Process

The 7 Step Strategic Procurement Model is ‘the origin of the species’ when it comes to buying process. It is a model in which pretty much every procurement professional has been schooled and is to be found in many office bookshelves, or drawers.

Despite its importance to buyers and its influence on buying, the 7 Step Model is unknown to most sellers. It represents a powerful yet unused sales tool.

What Are The Steps Of The Generic Buying Model?

For sellers the 7 Steps Model can best be understood in reverse, that is from the point of working with the new supplier backwards and that is how it is examined below:

Step 7: Implementation & Review, including making the switch to the new supplier and thereafter ongoing supplier performance management (or supplier relationship management for the more enlightened buyer).

Step 7 is the feedback/continuous improvement loop whereby performance and compliance are reviewed with lessons learned and corrective changes made.

At this step compliance both internal (e.g. the extent to which preferred supplier has been adopted throughout the organization) and external (contract compliance by the vendor) is of key importance.

Step 6: Negotiation and contracting with the chosen supplier(s) – a step that is pretty much self explanatory.

Step 5: Solicit & Evaluate Bids. Identify Suitable Supplier(s) based on the RFx, or competitive bid process (including proposals or tenders, presentations and interviews). That is the process for pitting suppliers against each other in order to get the best solution at the best price/terms.

Step 4: Set Sourcing Strategy. This links assessment of requirements and the supply market analysis to business strategies and objectives to determine what the needs are and how best to meet them. It may include factors such as; volumes (min and max), regularity of orders, order sizes, supplier concentration/dependency, supply chain management and integration, risk/resilience, compliance and other factors (e.g. the company’s supplier policies on sustainability, ethics/standards and diversity).

Step 3: Supplier Search. Casting the net in terms of suppliers and working from a long list to a short list of suppliers who will then be asked to bid.

Step 2: Supply Market Assessment including: Who offers what? What are the key trends with regard to supply? Who are the emerging suppliers? What should it cost? Is now the right time to source?

Step 1: Internal Assessment. Analyze the company’s current requirements, including an element of spend analysis (i.e. analysis of what is bought, where and at what cost) and demand management (i.e. How can what is bought be reduced, consolidated, or managed more efficiently?). This often takes place at a category level and will form the baseline for the procurement initiative.

Click to download a white paper on The 7 Step Strategic Purchasing Model.

References   

John O'gorman: What Are The Buyer’s Next Step? Retrieved January 22, 2014 from http://buyer.sellerinsights.com/2013/06/28/what-is-the-buyers-next-step/

  

Blaž Mertelj
Managing Director&Senior Consultant

How You Can Become More Strategically Important To Your Customers

Are You A Strategic Supplier?

The question is not ‘Are you are a strategic supplier?’   That is because a ‘Yes’ or ‘No’ is generally insufficient.  There is for example no point in saying ‘we are not strategic’ and giving up in a sense of helplessness.

Think of it this way.  Becoming a strategic supplier is not a matter of flicking a switch, but rather turning a dial.  It is not an ‘On’ or ‘Off’ switch that determines whether you are strategic.  Rather think of strategic importance as a dial – one that can be adjusted up, or down.

The real question is ‘How strategic are you?’ and more to the point ‘How strategic can you become?’  Let’s start with the first question.

How Strategic Are You?

With some of your most important customers in mind, answer the ‘How strategically important are you?’ question using a scale of that ranges from 0 to 10. 

Remember to answer the question from the customer’s perspective where 10 is ‘very important’ and 0 is ‘not important at all’.

Apply it to your top key Accounts below:

Customer Name:	How Strategically Important Are You? (On A Scale of 1-10 )
1.
2.
3.

If you find yourself today at a 4, or a 6 out of 10 on the dial in terms of your strategic importance to the customer you are not necessarily stuck there.  That is the good news: you can strive to ‘turn up the dial’ in terms of your strategic importance to the customer over time. This is something we will discuss shortly.

How Strategic Are You?

For those who seek to be strategic it is ‘the ultimate quest – the search for meaning, or purpose’. That sounds like a lofty goal, but it begins by asking two simple questions:
These sound like simple questions, but they get to the very core of just how important you are to your key accounts.  For that reason we recommend you fill out the blank spaces above before going to the next page.

Why Do You Matter?

The words ‘strategy’ and ‘strategic supplier’ can get a little confusing.  So let’s strip them back to the core.  Being strategic is simply a question of how important you are to the customer.  More specifically it is about how and why you matter in terms of their performance.

Being a strategic supplier means that you support their strategy and contribute to their success (either directly or indirectly).  Indeed, there is nothing more strategic than success.  So how much youcontribute to your customer’s success is the ultimate measure of just how strategic you are. Measuring and communicating your contribution to the customer’s success is key.

At the highest level the supplier’s importance derives from its impact on the overall performance of the customer’s business and its key business metrics.  That is the zenith in terms of strategic importance and it measures success in a way that ultimately impacts on the top line and the bottom line.

However, it is not just about the top, or bottom line, there are any number of levels at which a supplier can have an important impact on customer’s performance and success.  The strategic supplier can have an important role to play at any point of the customer’s supply or value chain.

A supplier’s importance can be measured, for example, in terms of its contribution to the success of; a particular department, function, project, facility, manager, team, or user.  That is why it is important to answer the question ‘who do you matter to?’

Who Do You Matter To?

Your company may not be strategic at a board level – that may be too much to hope for.  Indeed, if you don’t contribute directly to corporate strategy and its success the CEO or CFO may know, or care little about; your company.

However, that does not mean you are not important in other ways. You may be very important to:

• Specific stakeholders, or departments
• Particular projects, facilities, or functions
• The achievement of particular milestones, metrics, or other results
• The buyer with a specific challenge at that point in time.

Just like beauty, strategic importance is in ‘the eye of the beholder (i.e. stakeholder)’.  A key question therefore is ‘who do you need to be important to?’

It is important to decide whose strategy and performance you want to contribute to and to ensure that these stakeholders have sufficient power or influence over the supplier selection and the buying decision.
There is another dimension of the expression ‘in the eye of the stakeholder’ to consider.  What matters is not whether you think you contribute to the customer’s success, but rather what they think.  Making tangible the link between your product or service and the customer/stakeholder’s success is key.

Q. How tangible is the link between your product or service and the customer’s success?

How Can You Become More Strategic?

When it comes to being strategic most (if not all) suppliers can work at making themselves more important.  There is always scope to become more important to the customer.   We call it ‘strategic scope’.

Suppliers have to believe that they can matter to their customer – not in a delusional way, but in a seeking or aspirational way.  This is at the core of competitive strategy – it is the drive behind so many initiatives in areas ranging from product innovation to customer service.  Here is how one manager put it:

‘Wanting to matter to your customers is a natural desire, indeed it is a competitive necessity. I think of our efforts in this area as our search for meaning.  We need to continually shape and redefine what we mean to our key customers.’

So ask the ‘How can you become more strategic?’ question.  This will get you thinking about:

-        The scope that exists for your company to become more strategic

-        The specific things you can do to matter more to the customer.

Even for companies in commodity markets there are always ways to become more important.  On the next page we will look at an inspirational example of this.

An Inspirational Story

A print company spotted a nationally advertised request for tenders in respect of the printing of inflight magazines for a major airline.  Printing is an industry well known for its price sensitivity, just as airlines are known to be going through difficult times.

With all this in mind you would imagine that there is little any supplier could do to position itself as being strategic in responding to this tender.  Surely, it would simply be a matter of lowest price wins.  Read on, how this particular print company approached the tender offers inspiration or us all.

The print broker spotted the publicly advertised contract for the design and print of in-flight magazines for a large airline.   So too did many others.  However, this brokers proposal separated its solution from the pack by connecting an otherwise low cost commodity item with something that really mattered to the buyer.

In its response the broker showed the airline how it could produce the magazines using lighter paper and a number of other design features so as to greatly reduce their weight.  It provided some rough calculations showing the impact that this could have on airline profitability.

Lower weight means lower fuel consumption for the airline.  With thousands of passengers and hundreds of flights per day those savings were compelling.  The print broker focused the buyer on the total cost of ownership or the total value of the solution in order to beat the competition.

The challenge we all face as sellers is to find ways to connect what we sell, with what the customer cares about most – their strategy and results.

The lesson is that if what you are selling is not strategically important, then find out what is and be creative in connecting your product, or solution to it.  In other words if you want to matter, first find out what matters to the customer.

Connecting With What Matters To The Customer

So, what is your strategy to become more important to your customers?  Take inspiration from the print broker story and explore new ways to become more important to your customers – to matter more.

With this in mind, select a key customer and identify what matters to them.  That is their definition of success, strategy for success, key success factors, metrics for success, and risks or barriers to success.

Your Importance To ‘The New Buyer’

Don’t forget to include all the relevant business functions including for example; procurement, finance and operations, as well as the end user. This is particularly important if what you are selling is traditionally being bought by engineering, IT, or other technical functions who must increasingly defer to these so called ‘new buyer’in making important buying decisions.

The shift in the balance of power in terms of buying decisions has implications for your KAM strategy. It means that you must engage with the business and economic buyer, communicating why you matter in a language that they understand. Increasingly that is the language of numbers and the business case (or economic justification for the purchase).

4 Ways To Increase Your Importance

The objective of this insight is to help you to identify 3-5 ways that you can become more important / strategic within a key account.

To help you complete the above, here are 5 strategies to help you increase your importance:

Strategy 1: Go beyond features & benefits to engage with the customer in discussions about:

• Success & how it is measured (metrics, KPIs, etc.)
• Their strategy, goals & vision
• Any risks, dependencies or challenges

Strategy 2: Influence or shape:

• the design
• the specification
• the standard/metrics used
• the project plan
• the manual
• the workflow
• the process

Strategy 3: Look beyond the customer’s stated needs to What they are really trying to achieve, including:

• The drive for efficiency, cost reduction & innovation
• Their key business drivers
• Their competitive strategy
• What peers & competitors are doing
• What is happening in their industry
• Unmet needs
• Emerging trends and requirements for change

Strategy 4:  Identify the impediments to the customer’s performance or success:

• Hassles & frustrations
• Hidden complexity
• Compliance burden
• Unspoken risks
• Politics (incl. divergent stakeholder expectations & agendas)
• Competing projects & priorities

Strategy 5: Innovate

• Solve problems that matter now
• Resolve conflicts / tensions
• Reconcile divergent views/objectives
• Bring new perspectives
• Enhance capability
• Facilitate / manage  change
• Add new value
• Bridge existing gaps
• Connect functions, or systems

References 

John O' Gorman: Buyer Seller Insights. The Quest To Become A Strategic Supplier. Retrieved January 30, 2013 from http://buyer.sellerinsights.com/2013/11/15/the-quest-to-become-a-strategic-supplier/

Tamara Ćetković
Consultant, Coach & Project manager