Three cognitive biases that influence your sales results

In part 1 of our cognitive biases in sales, we discussed some of the biggest biases that influence sales teams and prospects. We talked to some of the top sales leaders at Zoho and asked them what they see in the field, and which biases felt relevant to them. We couldn't cover all of the biases that they frequently saw pop up in sales situations, so we'll take a hard look at some that did not make the list last time. Let's kick things off with the halo effect.

The Halo effect  

This cognitive bias is particularly relevant to sales teams. According to this heuristic, when a person has a positive impression about one aspect of something, it leads to a general positive impression about that thing. For example, we tend to automatically credit attractive people with more positive attributes than they may possess. The same applies to popular brands introducing new products. We are far more open to trying and purchasing new products from brands we know even if they are new to the product category.

When it comes to cognitive biases in the sales process, the focus is often on counteracting cognitive biases that prevent prospects from agreeing to a deal. However, in the case of the halo effect, there's actually an opportunity to leverage this bias when it occurs.

How it affects sales:

If a prospect has great rapport with the sales person the've been talking to, then that goodwill extends to the entire organization and brand. This is why sales reps need to prepare for every interaction, and understand that the work they put in is bigger than a single conversation or meeting. The effort they put into researching the prospect yields dividends, such as understanding their pain points and gathering as many relevant details about aspects like the nuances of their industry. A combination of charisma and the willingness to get close to the prospect's problem will not only impress them but thanks to the halo effect, this positive association will reflect on the entire organization.

The IKEA effect 

Ever made a piece of art and thought it was fantastic, only to see it again much later and realize that it wasn't that great after all? The phenomenon that obscures your judgment and filters it through rose-tinted glasses is referred to in psychology as the IKEA effect. It's a cognitive bias that increases your estimation of something if you were involved in its creation. It prevents us from taking an objective stance towards things that we create. Our powers of objective analysis and critique are quite healthy when it comes to someone else's work but when it comes to our own, the IKEA effect can blind us to flaws and shortcomings.

How it affects sales:

You can leverage the IKEA effect in sales scenarios quite effectively. In fact, it kicks in a lot of times without you being particularly conscious about it. It happens when your prospect works with you on developing a solution plan. They become attached to it personally, and have a greater stake in seeing it succeed, and pushing it to other stakeholders in their organization. So leverage the IKEA effect. Involve your prospects actively in drafting a blueprint for their solution. Draw out their input and ensure that they feel engaged in the creation of the proposal that you will be presenting. They will want to see you succeed in closing the deal, since the success of the proposal will feel like their own brainchild and part of their own success story.

Mere exposure effect 

"Oh yeah, I've heard of them."

"Oh, I haven't heard of them."

If you're recommending something to a friend, which response would you be happier to hear? Maybe if you're introducing them to something like a new song or musician, it would be the latter. But in most other cases, in situations where you want them to take your recommendation seriously and have them accept and adopt it, you know that there's a much better chance of them doing so with the first reply. This is the mere exposure effect at play. Just being familiar with a thing makes a person much more open to it. On the other hand, a lack of familiarity breeds a sense of suspicion; people tend to take on a more skeptical attitude.

How it affects sales:

Unfortunately, for sales teams at startups and small companies, the mere exposure effect will usually be working against them. When fighting against incumbent players, the familiarity of the brand name itself acts as a psychological barrier for sales teams to overcome. Competitors of JCB and Xerox had to fight fierce battles to gain market share in India since to most people, the product categories were synonymous with the brand names.

What sales teams can do is to contrast their offerings against the better-known brands, and highlight how their solution offers relatively better business outcomes. Hard data and statistics will help in making the pitch more convincing. Also showcase any awards or other plaudits earned by your organization. This shows the customer that you are an established player in your space—and help them remember you favorably in the future.

Gathering customer testimonials is another effective approach that leverages this psychological effect. Try to capture the testimonials from those who have switched over from a familiar brand to your product and enjoyed the benefits of doing so. Skeptics will find this reassuring and it will make it easier for them to trust you.

There is also a way to make the mere exposure effect work for you despite being a relatively unknown company. If you have worked with renowned or well-known organizations, the familiarity of their brands will boost your organization's credibility in the prospect's mind. It's a no-brainer to slip these names into your decks and interactions (after getting consent from the client of course).

Navigating biases

Cognitive biases affect every aspect of our lives. Unfortunately, they also play a big role in sales teams achieving their targets, both positively and negatively. But the good news is that being aware of biases and identifying them in day-to-day situations is a great first step in counteracting their influence. When you develop strategies that take advantage of these cognitive effects and offer relevant training to your team, it makes your sales reps more successful in navigating cognitive biases in sales. Your business's bottomline will thank you.

Are we a little biased when we say this? Of course, we wrote the article; it's the IKEA effect at play. But you don't just have to take our word for it! These effects are well researched and you can learn more about both the underlying psychology and how these ideas apply to sales.