In a perfect world, we would all make decisions based on logic alone. But the science tells us that the majority of our choices are influenced by biases—automatic modes of thinking we don’t even realize are controlling us.
Better understanding these 8 cognitive biases lets sales reps like you get in the heads of your buyers, subtly influence leads, and secure your sales success.
1. Anchoring Bias
The first cognitive bias is called the anchoring bias. When making decisions, humans rely more heavily on the first lot of information they receive over any subsequent lots of information that come their way.
The issue is, the first lot of information isn't always the most reliable.
For example, say I'm selling a product and I tell you it's worth $20,000 a month. Then two days later I come to you with a credible story that I can now offer it to you for the low, low price of $10,000 a month. Seems like a complete bargain, right? This is because your judgment on what pricing is fair is based on the initial information that you received.
This is an example of how “anchoring” is used as a tool of influence. Many organizations sell their products by anchoring a fictitious price that the product never actually sells for. Then they pitch the lower price afterward to secure a deal.
This can also be used more subtly too. For example, if I ask you whether the tallest building on the planet was more or less than a thousand feet high, I've already anchored this number in your brain which can skew your response.
So if you were thinking of a number between 800-1300 ft, then my question that mentioned 1,000 feet specifically skewed your answer.
As it turns out, the world’s tallest building is in Dubai and is 2700 feet tall!
See how that works?
2. Availability Bias
The availability bias is when people overestimate the importance of the information they've already accepted. And that causes them to ignore other information that might contradict what they think they already know.
A good example here is that a lot of people in the Western world consider terrorism a very real threat to their safety. Why? Because terrorism is screamed in our faces every single day through newspapers, TV shows, and of course Youtube videos.
So most people assume because of the availability bias that you have a real chance of being killed by terrorists, and something needs to be done about it…
The reality is, you're more likely to die from a coconut falling on your head or being struck by lightning than being attacked by a terrorist. Yet most people don't worry about these things.
If you live in America, you're 130x times more likely to be killed by a police officer, the people who are there to keep you safe from terrorists, than die from a terrorist attack. How crazy is that?
This cognitive bias works because most people do not make decisions based on facts; they make them based on stories as stories sink into our brains easier.
This is an essential cognitive bias to remember when you're selling. The lesson here is you should blend facts about features and benefits with customer success stories. That’ll leave an impression on your potential customer's mind that will be hard for a competitor to change.
3. Bandwagon Bias
See, people tend to believe what other people think.
People like to be a part of the crowd rather than nervously looking on as they make a decision that doesn’t fall in line with everyone else.
And in sales, you can really use that to your advantage. If you position yourself as either the industry-standard product or the hot new start-up service or service that everyone is flocking towards, you're instantly given an incredible amount of credibility.
If everyone is using your product, it must be the best right? That’s how the potential customer will see it anyway. All because of the bandwagon bias.
The bandwagon effect is especially devastating when you look at the financial markets. The world economy can technically be in a recession for months or even years before anyone pays attention to it. But when people start selling their shares, it encourages other people to sell theirs too. And that causes a scare and eventually a full-blown market crash.
People aren't selling their stocks because they've analyzed the company and its performance. They’re doing it because everyone else is doing it.
And that’s the bandwagon bias at play.
4. Decision Bias
People tend to defend themselves once they've committed to a decision. This defensive stance is essential for sales professionals to understand. Because if you annoy a potential customer and they say they won’t do business with you, they’re usually going to stick to their guns.
And that means you should just move on. Or better yet, don’t annoy them in the first place!
Another example of this is what people call “fanboyism”. You can see this with nerds that love Apple products such as the iPhone or MacBook. Feature-wise, these devices aren’t very different from the competition.
But even still, Apple fanboys will only buy Apple products. So even as the price of these products goes up and up, they’ll defend their purchase and proclaim they are far more differentiated than what they are.
5. Confirmation Bias
When people search for information, they usually pay attention to content that confirms what they already believe.
So if you were born into a religious household, you’re much more likely to follow the religion of your parents. You’re more likely to watch YouTube content about that religion, more likely to have friends in the same religious group, and so on.
The flip side of this is some religious people haven't chosen their religion at all. It was dumped onto them as a child, and they've never questioned it or researched other religions that with hindsight, with objective thinking, may be more appropriate for them.
You see this an awful lot within the world of health and fitness too. For example, if you enjoy drinking red wine, your brain pays attention to the scientific publications that suggest red wine is good for you. But, if you think alcohol is bad, you'll naturally pay more attention to the studies that show links between alcohol and cancer.
So make sure you're genuinely open to the opposite side of discussions; otherwise, you might also fall into the…
6. Ostrich Bias
The ostrich bias is the subconscious bias that encourages you to ignore any negative information that comes your way. This goes beyond not proactively looking for negative information by watching the news, for example. This bias causes you to become blind to the negative information, even when it’s staring you right in the face.
An example of this could be when you know you're behind on your sales numbers but you “put your head in the sand”, like a cartoon ostrich, and choose to ignore this fact.
You continue procrastinating and you don't do anything about the issue. Until eventually it’s too late to make a difference.
Now in the short term this bias can relieve some stress that we might face if we embrace the gravity of the situation. But over the long term, this bias always makes things worse.
7. Outcome Bias
The outcome bias is the tendency for us to evaluate decisions based only on the results. Even when those decisions were crappy ones.
This is easiest to understand with an example. Say you were in massive credit card debt and decided to take out an additional loan to buy a bunch of lottery tickets. Then by some miracle you won, managed to pay off your debts and still had money leftover. The outcome bias would push you to believe that you made the right decision.
But the reality of course is that this was downright idiotic. You just got lucky.
This happens a lot in business too. Let's say a manager is making a purchasing decision. His team and all of the data tell him to buy product A, but his gut tells him to purchase product B.
On one occasion, his gut decision to buy B happened to be the correct decision, even though it went against all of the logical evidence.
The outcome bias will then make this manager trust their gut on purchasing decisions in the future. And guess what? They’ll make countless mistakes in the future because of it!
8. Survivorship Bias
This final bias is when you judge something based on the surviving information rather than all the information that you have.
Example. Right now you’re watching this video. And we’re nearly at the end. So you will have a different opinion on the content than someone who viewed 30 seconds and clicked off because they were bored.
When we only listen to the people who have actually completed the process, we ignore lots of feedback from the people who didn't. And that feedback can actually be some of the most valuable.
This is a real problem in the sales training industry. You get lots of middle-aged, angry dudes in suits that don't fit banging on about cold calling and all the other weird sales techniques that worked in the 90s.
Because these techniques worked back then, these guys had some success and so started training others.
Now they have survivorship bias and will only focus on what worked for them, ignoring the facts that the marketplace has changed, and nobody answers cold calls anymore, and also their audience isn’t like them. Otherwise, they would have already had success cold calling. Right?
This is one of the reasons that the Salesman.org training platform includes an assessment that then tells you, specifically, what training will work best for your personality type. This is the most effective way to ramp up selling results, fast.
Because it doesn’t rely on the faultiness of survivorship bias.
