How Irrational are Your Sales

With all the buzz about the latest CRM programs combined with Marketing Automation and some solid content, there’s a tendency to think that all a wise marketer needs to do is push a button and sales will flow. Maybe with a little analytical help on the side. Yet what is often forgotten in the rush to automate the process and systematize the content is the psychology of the buyer. Ignore it at your peril!

No matter how we want to believe that our customers behave in a logical, rational fashion, there is plenty of evidence that customers often behave in a completely irrational manner. Unlike Mr. Spock, these customers make decisions on purchases not based on a logical progression but based on outside factors, some of which are completely outside of the marketer’s control. Here’s a few instances where an irrational decision may occur:

1. Regret – many buyers behave in a manner overly influenced by the fear of feeling regret, passing up benefits to avoid the small risk of feeling they failed. Sticking with a trusted brand, even though a new upstart may offer superior features across the board, may be loyalty or the power of the brand, but often is this fear of regret. The old adage “you’ll never be fired for hiring IBM” is partly paying homage to the brand, but partly acknowledging that buyers avoid risk and fear regret in how they behave.
2. Cognitive dissonance –this means the holding of a belief completely at odds with the evidence usually because this belief has been held and valued for an extended period, commonly called ‘denial’. I come across clients on a regular basis who display cognitive dissonance with the ‘we’ve always done it this way’ mentality in their decision making. It took my father, a WW2 vet, over 40 years to accept that he could buy a Japanese made car without being seen as (a) unpatriotic or (b) sacrificing features and benefits that only an American made car can provide.
3. Anchoring – this is the basis of so much of social media marketing, the notion that people can be hugely influenced by outside suggestion, even if the person giving the suggestion is not better informed. This factor is one of the reasons why researchers struggle with some focus groups where an overly influential participant can skew the results. It’s also how some brands get crucified by buyers based on word-of-mouth from colleagues who may have no direct experience of the brand, but perhaps don’t gel with the salesperson’s appearance or attitude.
4. Status Quo Bias – some buyers make decisions involving potentially bigger gambles to maintain the status quo than they might have when buying originally. We often see this behavior when a buyer accepts a decrease in service standards or increase in price to avoid the hassle of re-pitching or running an RFP. Many corporate buyers prefer a quiet life, and will go to some quite irrational efforts to maintain it.
5. Compartmentalizing – this behavior is quite common in larger enterprises, a tendency of buyers to focus on the small picture instead of the big picture. Many IT decisions at some of the largest, most respected companies in the 1990’s are now seen as patchwork temporal solutions without a broader picture of where IT was headed. Isn’t the term ‘legacy systems’ today seen as a dirty word among IT professionals (and increasingly marketers) attempting to cope with the speed of change in the market? When we worked with British Telecom many years ago, the excuse for why we couldn’t move quicker with marketing initiatives was invariably ‘legacy systems’ set up primarily for billing and service issues, rather than marketing. This narrowcasting of decision making is hopefully becoming an historical form of behavior; I suspect it isn’t. Compartmentalizing can also occur when a buyer makes a decision based on a single or minor aspect of a seller’s proposition, even though an outside observer acting rationally might behave differently. It’s why having a superior price offering and features/benefits doesn’t always win.
6. Availability Heuristic – this is where buyers focus excessive attention on the more recent or visible events or facts, rather than the bigger picture. Hiccups that occur prior to the submission of a major RFP can skew perceptions. A hard working supplier who perhaps doesn’t speak on the corporate speaker circuit may find itself on the outside to a higher profile, but potentially less capable, competitor.

Marketers need to face the fact that despite what the data tells you, despite how close you may get to your customers, despite how clever or entertaining your content, there are always factors in the buyer’s psychology that create behavior that runs counter to what you expect. It’s why marketing is still equal parts ‘art’ and ‘science’, never able to get it ‘right’ 100% of the time. And that we all behave, in certain circumstances, irrationally.


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