July 14, 2019

In today’s online landscape, neuromarketing and neuroscience can largely boost your return on investment. Any firm or business must also take into consideration how the new buyer behaves and pays for products. Furthermore, the background of tech consumers is largely changing. Marketing efforts should adjust accordingly. 

Previously, before the spread of digitalization, customers used to purchase products in one lump-sum payment. While marketing campaigns took longer to prepare, a single sale covered most of the associated expenses. Moreover, a customer sales rep that knew how to utilize a sales script and deploy selling psychology proved to be a valuable asset. 

Having said that, this strategy is almost ineffective in the online marketplace. The neuroscience behind digitalized sales is completely different. Not only do buyers prefer to remain anonymous, but the absence of physical interaction makes it more difficult to retain their attention online. 

How You Sell 

By the time that a digital buyer contacts a firm’s customer sales representative, they already went though 60-85% of the decision-making process. This makes engaging and attention grabbing content incredibly valuable. Neuroscience and neuromarketing techniques are a central part of making this process successful. 

Digital consumers rely more on self-education than those who walk into a store. This means that they research products online and consult with their network before contacting the seller. Consequently, any business that motivates consumers to engage with their content is more likely to increase their sales. Even more when their product descriptions are easy to understand. 

One way of being digitally effective is through video content. Unlike static pages, videos do a much better job at highlighting a product’s features while retaining users’ attention and keeping them engaged. A short, descriptive video makes it very easy to connect with customers and helps them make a buying decision more quickly than an article does. 

Why You Sell 

In the tech industry, IT professionals and chief information officers (CIOs) dominated the traditional marketplace. Today, however, business executives make the majority of software product purchases. It is important for marketers to understand the different psychologies of these two sets of consumers. 

IT professionals are mostly interested in technical product descriptions. Business executives, on the other hand, have one thing in mind: How does this software help my business? Neuroscience requires marketers to focus on practical and direct details. 

For example, instead of advertising a payment processing software as “WordPress friendly”, sellers should highlight how the product can lower transaction fees or accept all major credit cards. Similar features to focus on are how quickly the funds will be available for withdrawal or that they can be connected to a Paypal account. 

When You Sell 

In a physical store, consumers buy products in one lump sum payment. This immediately covers all related marketing expenses. Online buyers, on the other hand, prefer to pay through increments and monthly installments. 

While this diminishes immediate returns, neuroscience and neuromarketing will boost your overall number of sales. In turn, this increases both short and long-term returns. The key to success in the online marketplace is creating engaging content that showcases the right product features. 

Want to learn more?

Click Here to learn the factors of effective emotional selling!

The post How To Use Neuroscience To Accelerate Your Sales Cycle appeared first on .

July 14, 2019

If you run a marketing team or business, you probably focus on three key metrics: revenue, profit, and cost.  No doubt, your goal is to minimize cost and maximize revenues. You may be considering working with a finance leader to help you set long-term growth goals for your organization.  

This mainly covers tasks that involve pricing service and products to add value to your business and make profits. But how can you do that effectively? What are the strategies you can use to price your product to increase sales and profits with little effort? 

One way is to master the skill of pricing your product. And to do that, you need to not only understand psychological pricing but also leverage the right strategies.

Below we discuss some key strategies deduced from the theory that certain prices have a huge psychological impact than others. Whether you’re a customer service manager, business leader, or professional service leader, the strategies are helpful for all. 

Psychological Pricing Strategies 

1. Charm Pricing

A research study conducted on psychological pricing found that consumers perceive prices lower as compared to prices that are one cent higher when you change the left-most digit to a lower level.  

The strategy is also referred to as charm pricing as it involves prices that end on “9” or “99”.  In this strategy, businesses reduce one digit in price by rounding off one cent.  For instance, the human brain processes $4.00 and $3.99 as two different values: to your brain $3.99 is $ 3.00 and is cheaper than $4.00.    

2. Prestige Pricing 

This strategy is an opposite of charm pricing. It makes values into rounded values, like $19.99, can be converted into $20.00. It happens because rounded numbers, like $20.00, are more appealing to consumers than non-rounded numbers (e.g., $19.99). That means rounded figures “feel right” to consumers. 

3. BOGOF– Buy one get one free

This is one of the most popular pricing strategies where customers pay the full price for a service or product to get another one free. Many entrepreneurs make some changes, like: 

• Buy one get four free
• Buy one get 25% off on the next purchase
• Buy one and get two bonuses valued at $70, for free

4. Visually Highlight Prices

According to Keith Coulter and Robin Coulter research, this strategy triggers an immense fluency effect.  The consumers interpret any visual difference to a big numeral distinction. That means, if you change the color, font, and size of the signage for the existing price and place it away from the previous price, it will likely increase the number of purchases.  

The customer sees the new price as a better deal than the last placed price. 

Final Thoughts 

Overall, the given psychological pricing strategies are effective for various types of businesses, but it is important to test different strategies on different products to determine if they suit your business.  

Sources 

• https://production.wordpress.uconn.edu/businessmarketing/wp-content/uploads/sites/724/2014/08/size-does-matter.pdf 

• https://www.jstor.org/stable/10.1086/678484?seq=1#page_scan_tab_contents 
• https://psycnet.apa.org/record/2005-05742-007 
• https://www.entrepreneur.com/article/279464 

Want to learn more?

Click Here to learn how to craft your perfect pricing, and click here to learn how we can help!

The post Psychology of Pricing: What Strategies Can You Choose?  appeared first on .

July 14, 2019

Negotiation is the way we get what we want, no matter what it is. In today’s world, every decision involving more than one person goes through a process of negotiation, which determines the outcome for everyone involved. While negotiating usually results in a profitable outcome for the more competent side, it’s possible to improve this final result through learning about the neuroscience of negotiations.  

History of negotiations 

The modern human brain has been developing its own negotiation skills since the beginning of the genus ‘Homo’. As negotiation in all forms has been a crucial part of our species’ survival, we have developed greater instincts for it, making us the best negotiators in the natural world. Today, the negotiation process is highly influenced by our fight-or-flight responses, as well as by secretions from our adrenal glands. Many psychological and physiological factors highjack us during negotiations and affect our ability to think on our feet. We are motivated by an inherent reward–seeking system, which in our competitive modern era, is often driving that instinct to function as a threat-based system instead. Natural negotiation is the human body’s way of assisting us in securing everything we need to survive – shelter, food, water, socialization, protection and even procreating partners. All of this points to a direct link between neuroscience and negotiation. Money is emotional. Winning vs. losing is emotional.  

What is it? 

The neuroscience of negotiations is, quite simply, the manipulation of the hormonal and psychological responses of the brain. Negotiations trigger a relational impulse in our brains, and by learning to control that impulse, we can improve the results of our endeavours. The neuroscience of negotiations deals with tweaking one’s mind and one’s natural responses to increase one’s influence over the opposite negotiating side. The battle between oxytocin and cortisol is the battle between trust and fear in our bodies. To be a successful negotiator, one needs to emanate trust and comfort while reaching a high level of control; one either has to practice a lot, or learn about neuroscience and its influence in negotiations.  

Why it matters for your sales approach 

Negotiation is how we succeed in life. It’s the one simple process that applies to everything we do, and the better we are at it, the better results we can achieve. Negotiation coaches teach us how to keep our own thoughts hidden while reading the other side; though this is just one part of the neuroscience of negotiations, it’s crucial to master this step before moving on to anything else. The point is to be able to make one’s interlocutors comfortable enough that they don’t come forward with demands, but rather with needs and concerns. It’s far easier to debate a need or an inability to do something than it is a demand or anything else shrouded in negative connotations.  

Conclusion 

Understanding the way our bodies work is crucial to understanding how we communicate with people. Negotiating is one of our natural bodily responses, but it can be controlled and streamlined to fit our needs. Throughout negotiations, barriers such as language, prejudice, preconceptions and emotions all fall under the category of neuroscience.  

Want to learn more? Click Here!

The post The Neuroscience of Negotiations appeared first on .

Unless you can read your customer’s mind like Dr. Xavier, you’ll have to rely on other skills to avoid being taken advantage of during IT negotiations. If you’re not careful, your approach will lead to one of two results: you lose the business, or win but leave money on the table. As a lawyer for IBM and Thomson Reuters, and as a purchaser for numerous billion-dollar corporations, I’ve negotiated for 25 years on both sides of the table for large IT acquisitions and sales teams. And I’ve seen negotiators crash and burn by making these self-destructive mistakes:

1   Arrogance

You’re negotiating for a big company, and your attitude is, “Hey, we’re great, and you’re stupid if you don’t pick us.” No one wants to do business with someone like that. The customer expects you to be arrogant, and you confirm their bias. Imagine how they’d react if you surprised them with some humility.

2   Acting Like a Robot

You’re not a machine, and neither is the customer. It won’t kill you to act like a human, and you may even enjoy it. Instead of getting right down to business, ask them about their family, where they grew up, what they do for fun. It’s a small thing, but you’d be amazed at how some friendly chit-chat at the beginning of negotiations will help you get what you want at the end. They say once you learn how to fake sincerity, you’ve got it made. Not true. Real sincerity and interest in another person will serve you well. Remember, if you do this right, your customer will buy from you again and again. It’s not a one-shot deal.

3   Acting Like a Used Car Salesman

There is nothing weaker than a salesperson who repeatedly says, “I think we can agree to that price (or that term), but I have to run it past my manager first.” It sounds like you’re buying a car, and soon they’ll ask you to add floor mats and undercoating. As a seller, go into the negotiation with a bottom-line price or set of business terms in your head, knowing you can make decisions up to that threshold. Otherwise, you may as well bring in the decision-maker early.

4   Stepping Over Your Line in the Sand

Never say, “This is absolutely my best offer,” unless it is. Once you lower a price you said you could never in a million years lower, you are at the mercy of the negotiator (and customer). Forever.

5    Filling Every Silence With Talking

“The next one to talk loses,” is a common negotiating maxim. Sometimes, it’s better to say nothing, and wait to see what the other person says, especially when the silence becomes uncomfortable. The customer may be ready to say “OK, I’ll buy,” but you keep talking until you’ve talked yourself out of the deal.

6   Trashing the Competition

You know how your mom said, “If you don’t have anything nice to say about a person, say nothing?” Well, that works in business too. The moment I hear trash-talking about a competitor, I have serious doubts about the ethics and professionalism of the negotiator. Long-term relationships don’t start there.

7   Being Afraid to Walk Away

Everyone wants to hit their number for the month, the quarter, the year. You always want the deal, right? But if you sound desperate, the customer will surely smell blood; before you know it, you’ve made huge concessions. Be willing to walk away – not fake walking away like you’re buying a rug in Marrakech – and you’ll either get the deal you want, or avoid a poor deal for your company.

In Conclusion

Are there only seven big negotiating mistakes, you ask? Of course not. There are as many negotiating mistakes as there are stars in The Cloud. Stay tuned for the next seven. And the next seven….

SaveSave

SaveSave

SaveSave

SaveSave

The post 7 Self-Destructive Negotiating Mistakes You’re Probably Making appeared first on .

Have you had a proposal or project that you worked so hard on get ripped apart?

Thought you had a deal in the bag and then they called to say “sorry, we aren’t choosing you after all“? 

Shared a great idea that you were proud of until everyone else thought it wouldn’t work?

Worked hard for the past year, having great results, but moved to a different position with less responsibility and influence? Meanwhile, others who didn’t work as hard ended up with a promotion.  

Are you terrified of public speaking? (or wonder why in a research study on fear public speaking ranks unnaturally highly out of all our fears?)

Each time you get rejected by others it hurts. It hurts a lot more than we like to admit to ourselves or to those around us. Why? Is it because we are a little insecure, looking for approval and worry too much about what others think? Or is it simply rooted in our own individual dysfunction? Why can’t we just shake it off, not take it personally and get on with our work or our life?

I can do a workshop with 40 partners and get 5/5 on all evaluations except for one, and all I can think about is what I could have done to win over that one person that gave me a 4.5.

What’s the Science?

Thanks to social cognitive science and the advent of newer, faster brain imaging technologies (think MRIs or EEGs), we can now monitor what really happens to people when they are rejected or disappointed and see what region of their brain is activated and how it responds.

For example, when we twist our ankle and experience physical pain, we say it hurts. When we lose a loved one, we say it hurts. When a spouse leaves us, we say we have a “broken heart”. We would never tell someone with a broken bone to “get over it”.  Yet when it comes to our social losses, we often do give that response.

UCLA Professor and author of “Social: Why Our Brains Are Wired to Connect”, Dr. Matthew Lieberman, claims in his research that our brains fire and respond to social pain the same way as it does to physical pain. Meaning that social pain can actually feel as bad as physical pain. One study even showed that taking a Tylenol each day reduced social pain. No wonder it feels so bad to be rejected by those we love or care about.

Interestingly, at the Shulman Laboratory, studies were conducted to determine what is happening in our brain when we stop doing cognitive or motor work; that is, when we are not accounting, writing a proposal or reading a blog. Rather than observe what happens when we have a task to do, Dr. Shulman studied what the brain does when it’s “off duty”, “resting” or in “default mode”. His research showed that our default thoughts shift from the task at hand to thinking about social relationships. When our brains are on a ‘coffee break’, so to speak, certain parts of it light up and get more active when we are doing “nothing”. So why do portions of our brain become more active when you are finished performing a math problem? When our brain is not put to work, its default neural network starts to process social and emotional content. Think about it: when you get in your car, go for a walk, or just before you fall asleep, do you start to think about things like recent arguments, something someone said in the hallway at work, or a recent conflict with your partner? Close your eyes now for 30 seconds. Do nothing. Did your thoughts instantly switch to your social world? The default brain network is to work on interpersonal issues when otherwise not put to use. This leads to the simple question of why? Why has our brain evolved to work on social belonging when resting?

If 93% of 13,000 people studied have good eyesight, you would think that our survival in this world would depend on our eyesight improving and evolving. 95% of people also report having friends. So, is this an accident? By the way, in the theory of Dunbar’s Number, it’s determined that if you know 150 people, there are more than 10,000 relationship pairs to consider. Each of us needs to maneuver within complex social networks to survive in our personal and professional lives, so we pay close attention to all that goes on in this sphere of our world.

An Ancient Brain in a Modern World

Ultimately, we are no longer hunter-gatherers roaming from place to place. Instead, we’ve settled into spending most of our lives predominantly in one location with a community of similar people. Our survival in the modern world depends on our ability to interact and co-exist with others. Our income, jobs, power, and influence all depend on being able to interact harmoniously with others. So, when we are rejected, criticized or face disapproval by our “tribe members” even slightly, we feel threatened and at risk. We are triggered by fear (to fly) or anger (to fight) or apathy (to play dead). In ancient society, if the tribe decided someone didn’t belong, they would be banished, kicked-out, and would surely die of starvation or be eaten. Not that far back, we were burning people at the stake for practicing witchcraft.  We shift into a base fight or flight response to deal with this perceived threat or danger. If someone doesn’t like me, I might lose my job or not get my bonus. And although most of this rejection or criticism doesn’t amount to any “real” physical threat or danger, our primitive, emotional, old brain (responsible for monitoring our environment and alerting us to danger) triggers a strong physiological response regardless. It doesn’t distinguish between real danger and perceived danger. It reacts the same when you get demoted, insulted by a peer in a meeting, or lose an important high-profile deal as it does when you find a bear on your patio or a cougar in the trees (yes, these are in fact real threats up here in Canada) So no, you are not crazy or emotionally dysfunctional. You are just perceiving all these moments of rejection, criticism and disappointment as a real threat and danger to your survival, even though you are safe from physical harm. At our core, we are wired to be social; our survival and success depend on it (as does the survival and success of websites like Facebook or Instagram, for that matter).

So, the next time you are selling your product or services, help your prospect realize that your solutions will not only solve their business problems but —more importantly— will also help them look good to their peers, acquire more power and recognition, and maybe even land them a promotion.

Want to learn more about how our brains are wired to connect with each other? Check out Matthew Lieberman’s book social. 

The post The Persuasive Power of Rejection appeared first on .

We are all aware of the power of language; good jokes make us laugh, sad stories make us tear up, and curse words make us cringe. But that’s just the tip of the proverbial iceberg. The stories you hear, articles you read, and conversations you have day-to-day hold the power to inspire, repulse, or galvanize you, your community— even the society you live in.

Despite the immense amount of power language holds, companies still manage to continually miss the mark when entering into a conversation with their prospective clients. Dry, banal vocabulary riddles websites across industries, describing products and services in a manner akin to your standard operating manual: “here’s what we do and here’s how we do it”. The end.

Taboo Triggers

Luckily, large amounts of psychological research exist to describe the emotional weight of specific words and phrases. For instance, many studies have effectively demonstrated the physiological arousal experienced by subjects who hear or read curses and taboo phrases (Harris, Gleason & Ayçiçegi, 2005). In this specific study, subjects showed higher galvanic skin response (or electrical conductivity of the skin) when presented with a taboo word or phrase. Put simply: telling someone to “shut up”, for example, has the ability to increase heart rate, raise blood pressure, and heighten respiration rate. From there the science is quite simple; when you are in a state of physiological arousal you’re alert. You’re focused.

The Unexpected Power in Negativity

But we ask that you please not curse at your clients! The point of this data is merely to demonstrate the affective power of emotional language and its ability to push a prospect from a passive state to an active one. This leads us to the next point: in a similar study, it was found that people spend longer processing and paying attention to emotionally negative and taboo words than neutral —or even positive— ones (Eilola & Havelka, 2010). In this study, subjects were asked to identify the font colour of words presented to them on a screen. Neutral words had a reaction time of 698.2 ms (with 3.4% errors), whereby subjects took 764.8 ms (with 4% errors) to recognize the colour of the taboo words. So what does this mean for you, someone who’s looking to increase margins on your product or service? When messaging is framed from a perspective of loss, prospects will statistically spend more time engaging with it. For instance, a message to the client outlining a product or service’s ability to save shrinking margins or fix a convoluted sales cycle will be more effective than a message simply outlining how robust or effective a product is.

Who, Me?

Finally, language appeals most to the emotional buyer’s brain when it uses “terms derived from interpersonal communication”, like the words “we”, “you”, or “us” (Sela, Wheeler, & Sarial-Abi, 2012). Language that refers to the customer from a detached, third-person point of view is much easier to forget or ignore according to psychological research, whereas language that is interpersonal is reported by subjects to be more satisfying and interesting to consume. Therefore, it’s much wiser to include language on your website or in your promotional material that says something like “We work hard to provide you with an effective solutions package”, as opposed to “we work hard to provide our customers with effective solutions packages”. Language like this immediately activates the emotional centres in our brain, as we begin to make unconscious associations between the personal pronouns in marketing material and the personal pronouns we hear in day-to-day conversations.

To recap: we’ve seen data indicating that negative words physiologically arouse us and capture our attention, and interpersonal language is people commonly considered to be relevant and important to them. And these are only a few examples of the potential power language can have over prospects; more studies exist that outline the importance of poetic devices, trust-based language, and bilingualism in written material. This type of research is virtually endless, but one thing we can be certain of in the midst of it all: to not utilize the simple power of language in your PR, marketing, and relevant sales strategies would be an awful waste of words.

The post Lessons in Language appeared first on .

Have you ever visited an airline’s website intending to just buy a flight, and then had to actively deselect in order for the add-on trip insurance, hotel and car rental to be removed from your flight purchase? If you’ve encountered this, you’ve been a part of a default option marketing strategy.

What exactly are default options?

According to Christina Brown and Aradhna Krishna in their 2004 research paper The Skeptical Shopper: A Metacognitive Account for the Effects of Default Options on Choice, a default option is “the choice alternative a consumer receives if he/she does not explicitly specify otherwise.”

In the case of the airline example, the default option is the full upsell: you would purchase all the bells and whistles along with the flight unless you opt out of those options one at a time. As you might expect, default options can be powerful up selling tools. In Skeptical Shopper, Brown And Krishna tell us how the research confirms this:

“Park, Jun, and Maclnnis (2000) found that when buyers are presented with a fully loaded car and given the opportunity to remove optional features for a cost savings, they end up with a more expensive set of features than those presented with a basic model and given the opportunity to add features for more money.” So, if you are presenting cloud buyers with a set of monthly license packages to choose from, add in some options like an extra bundle of 5 hours of customer support and let them decided if they want to de-select the additional option.

 

Why does it work? According to some of the leading behavioural economists of our time, the default effects occur because of a mental framing that happens. We begin to think of the default option as the standard, and anything less– feels like an emotional loss.

The power of default options is the key message of the best-selling 2009 book, Nudge: Improving Decisions About Health, Wealth, and Happiness by researcher Richard Thaler, and the book’s companion blog, Nudges. Both great reads by the way!

But be careful not to over do it, the process of perceiving a default option is not as passive as you might initially think. There is a “correcting” of inclinations and could counter your default effect. If your offer default appears biased (in the sense opposed to the buyers natural tendencies) ot may reduce the size of the default effect … or even suffer a negative (backfire) effect…”

In Skeptical Shopper, Brown and Krishna explain that “there is a fairly involved cognitive process in which buyers review the information provided by the default, draw a conclusion about the risk, trustworthiness, or competency of the seller, and correct their initial inclinations according to this conclusion.” So, there it is. Default options can work, if your buyer believes that you are trustworthy.

How can you make yourself trustworthy to a customer?

Ideally, you can build trust by offering your customers genuine value with your default options. The key here is offering default options with the products and services that they really want and need – such as training, customization, integration with other systems, etc. (Not what you want them to want.) Including these options as a default, should help your customer get up and running quickly and improve the adoption of the system and accelerate their return on the investment, or help them alleviate key problems you know they will likely run into. Funny enough, once you stop trying to use default options as “up selling” and start using default options to solve your customers’ needs, the defaults will also work in your favour!

Examples – great default options:

• An automatic renewal system so that customers can continue their existing service without the hassle of renewal administration. The renewal system is:
  1. Well-advertised to customers,
  2. With clear reminders sent in advance, and;
  3. An easy process to avoid the renewal, optimizing customers’ trust and transparency.
• A default option that’s customized to a specific user type, and his or her specific pain. For example, adding a weekly email marketing campaign service to a CRM subscription would likely be a useful, customer-relevant default option for a large corporate marketing team. Default options should be grounded in a deep understanding of who your customer is.

Examples – poor default options:

• Adding a feature to your standard CRM product that’s clearly an upsell, something that your customer does not always need and won’t enhance their ability to get up and running quickly with their new solution.
• An automatic renewal program for clients without any warnings about the upcoming renewal, or any automatic renewal program that is difficult to find or to cancel.

How to create great default options:

1. Use Empathy. With your key customer personas in mind, put yourself in each persona’s shoes, and design default options based on their needs.
2. Co-create them. Have your customers help you create default options, consisting of the products and services that they would want to have as choice defaults.
3.  Test! As you create default options, test them out on customers before you unveil. This way, you can avoid any backlashes well before anything ever goes live.

Here’s how you can think about it: default options can be a great tool to help guide your customers to the best products and services for their needs. If you keep your customers’ interests at the forefront, then there’s nothing to worry about.

The post Are Default Options Going to Increase Your Revenue? appeared first on .