Accelerate Deal Closures With These Cognitive Approaches
As a salesperson, the prime numbers that advocate your mettle are the number of deals and the Total Contract Value (TCV) of those deals that you close in a given period of time. It’s common knowledge that the pressures to close deals with agility are immense in the technology industry. After all, the business environment is very competitive and at the end of the day, time always equals money. Converting sales without long delays is the key to survival and growth. However, most sales teams complain that this is usually easier said than done. In this blog, we observe the existing nature of B2B technology sales cycles and try to explore ways to shorten them by employing some tested cognitive approaches.
B2B technology sales cycles are lengthy
It is a well-documented fact that B2B technology sales cycles are typically long. They usually involve multiple decision-makers who ascertain the worth of the huge price tags or contracts in light of their varied interests in the organization. Moreover, the lengthy-time span also brings in the enormous room to change one’s mind over course of time – posing additional challenges to close deals with agility.
Statistically speaking, as per a study conducted by Harvard University, it typically takes about 7 months on average to close a B2B deal. Furthermore, this time span seems to have inflated by 22% over the last five years.
Given the status quo, accelerating deal closure may feel daunting and outrightly un-intuitive to expect quickly. However, as enterprising salespeople, the goal must be to ensure the least deviation from the benchmark time necessary.
Human decision making is a complex phenomenon
Accelerating the deal closure process requires a thorough understanding of human behavior. The mind and its decision-making process are naturally complex by design and have resulted in many study disciplines dedicated to exploring the different human behavioral aspects. As per McKinsey, long before such behavioral economics even had a name, smart salespeople were using it to enhance their conversion.
The fact remains that if only decision-making was purely rational; selling would have been a cakewalk with the neat demonstration of mere logic and expected ROI from purchase. However, the reality on the other hand is starkly different. It is a combination of several factors that influence an individual’s purchase decisions and these factors may not be straightforward or for that matter even entirely rational. In addition to logical reasoning, decision-making has a lot to do with psychology involving emotion, behavioral patterns, and gaps thereof.
Cognitive approaches to accelerate deal closures
In sync with the fact that human decision-making is a complex phenomenon, and involves a combination of both rational and psychological influences; it is pertinent for salespeople to concentrate on developing a sound understanding of human behavior. Being well informed about the curious quirks of the human mind can unfold a tangibly better chance to successfully close deals, and even get through the finish line significantly faster.
In that light, let us explore some tested cognitive approaches to speed up deal closures –
1. Project a likable and interesting demeanor
As a salesperson, you might have a great product to sell at a very competitive price point with a logically defined pitch. However, if you don’t get the prospect to like you in the first place, they’re very unlikely to think much or even consider what you’re offering seriously.
Hence you need to understand the prospect, behave in a friendly manner, and then strike genuine helpful conversations with sticky information. If you do come across as a nice person with a helping approach to their problems, the chances of getting them to respond to you are much higher. Moreover, if you massage your conversation with some interesting and relevant facts, they’re much more likely to remember you and what you have to offer.
As per CSO Insights, 45.6% of B2B buyers suggest that they would love to hear exciting new ideas at the beginning of a sales conversation.
2. Practice active listening at the beginning
As a universal tendency, human beings are naturally engineered to look out for information that confirms their pre-existing set of beliefs. This is referred to as Confirmation Bias and it explains why people universally have a hard time blending with those people with whom their own set of views tend to clash.
As a salesperson, this confirmation bias can have tremendous relevance in terms of navigating prospects towards deal closure effectively – right from the start.
Think about it, if you actively listen to what your client says in the discovery phase, instead of pitching your technology solution immediately – you can discover early on what they believe is the root of their need. This can help you to tailor and tune your storytelling, and ensure that it is in sync with their existing belief system! In short – less chance of conflict and a higher chance of faster success!
As per a research report compiled by Gallup titled “How to Build a Customer-Centric Culture”, as many as 68% of B2B customers are lost because of indifference or perceived apathy, and not because of mistakes!
3. Choose precise storytelling
Unlike a computer, the human brain is not wired to recognize information as data points. Instead, it is programmed with an innate tendency to identify gaps, look for patterns, and organize those patterns into stories. Many a time, these stories may not quite fit into the gross reality, and lead to what is technically termed as a ‘narrative bias’.
As a salesperson selling technology products and services, the SMART thing to do is to ensure that your prospects don’t have the chance to slip into any kind of narrative bias that is stemming from mere guesswork.
Instead, you must make it a point to feed their story right from the start, by providing all the necessary information and hence leading their thought process entirely the way you should. You must skillfully walk them through from pain point to resolution with a clear, concise, and complete narrative while leaving nothing to the imagination.
4. Win their loyalty with their own commitment
Nobody likes to have their effort to have gone to waste, and in this lies a great secret to winning a buyer’s commitment to closing a purchase.
As a salesperson, if you can get your buyer to invest their time, energy into an activity or decision-making process, they are sure to irrationally commit themselves to finishing it. Of course, this needs to be done skillfully without annoying them with unnecessary tasks, while making them feel you’re realistically helping them.
For instance, before the first scheduled interaction, you may send some preliminary questions to understand their mindset. Before the second rendezvous, mail them relevant marketing material to go through, and after the conversation maybe request them to test out the product or watch a demo in the interaction henceforth. This can make the next step including buying seem like a foregone conclusion, simply by gradually raising their level of commitment.
5. Ensure that you practice the right anchoring
The anchoring effect essentially refers to the naturally occurring sticky tendency of the human mind towards the first piece of information they are presented with.
Generally speaking, the tendency of most salespeople for introducing the commercial angle revolves around starting with mentioning the listed price of their product or service and thereafter presenting the deviations.
However, the more effective way to go about with B2B technology products and services is to touch upon industry trends right at the start, and give insights into the general adoption rates early on in the conversation. Many of the times this extremely critical information is kept for later parts of the conversation after disclosing the listed price. By this time the prospect has usually already had many thoughts to make him or her decide if the product or service worthwhile or too expensive. This ends up consuming a lot of their mental bandwidth, wasting time.
Hence, keeping with typical buyer psychology, it’s important to first inform and educate them about what their competitors are doing and what is the industry average spend on your product early on before revealing any pricing. Thereafter, the comparative information or discounts can be shared.
6. Leverage hyperbolic discounting during negotiations
Hyperbolic discounting in simplistic terms refers to the innate human tendency to prefer smaller but sooner rewards over larger rewards at a later point in time. As a sales person, the knowledge of leveraging this cognitive bias can have significant implications in navigating negotiations and closing deals with agility.
The simplest way to use it is to present and focus on the immediate benefits of the technology purchase, as any prospective buyer is likely to be more inclined towards the rewards they get to reap sooner. Secondly, and equally importantly – use it to influence the prospect’s perception of the product or service price and leverage that feeling to negotiate your way towards deal closure successfully.
For instance, if you introduce the option of delayed payment terms, any average prospect is more likely to feel comfortable paying later than spending the same amount immediately. In other words, most buyers are likely to commit faster to paying $1200 three months down the line, as against the same amount immediately now. Alternately, offering monthly payment terms as against yearly contracts that require smaller installments than a big sum at once can also get people to decide and say yes earlier. For instance – a greater majority of prospects would agree paying $100 every month against $1000 in lump sum; even through they actually end up paying $200 dollars extra by going for the former option.
Influencing prospect behavior through a simple and clear understanding of the human mind can be way more effective than the myriad tactics deployed by sales teams such as wine and dine meets, events or other hospitality activities.
The more you understand your buyer, how they think, and arrive at decisions, the better chance you’ll have at addressing the illogical quirks that guide their decision making – winning you better and surely faster results.