Can Milos Raonic and Serena Williams help you improve your selling game?
Australian consultant Bri Williams, an expert in behavioural economics, thinks so, pointing to their service game. They are amongst the players with the fastest serves in tennis. They go all-out on their first serve, when they can risk a fault. But if that fails, on second serves they are more conservative, slowing it down to increase the odds of keeping the ball in play and not forfeiting the point.
It's an example of loss aversion. Avoiding loss is more important than seeking gain, both for a tennis player holding serve and many others in risky situations. "If loss aversion was not at work, tennis players would hit their second serve as hard as their first, and care more about winning the point than losing," Williams writes in a blog post at SmartCompany.com.au. "This reminds us about the importance of perceived risk when it comes to customer behaviour. When it comes to doing business with you, what does your customer stand to lose?"
She suggests four things your customers stand to lose and how you can ease their fears:
- Financial: This perhaps looms largest, because it is so tangible and scary. A customer doesn’t want to find, at the end of the day, that what they bought doesn’t work out and that they’ve blown their money. They worry about return on investment. To counter those fears, she suggests offering them money-back guarantees, staggered installment payments, or waiving shipping or administrative fees.
- Time: Consumers spend time doing business with you, and they worry about wasting that precious resource, given there are many other ways to allocate their time. To reduce this fear, keep communications and meetings brief and to the point, simplify your sign-up processes to eliminate needless steps, and from the start tell them all the things you will do on their behalf to save them time.
- Effort: You are delivering a product or service that, if new, will require mental and physical effort. You may not have given that aspect of your customer relationship a lot of thought, but Williams argues it’s not small potatoes: “Your customer will have to think about you, which chews up their mental reserves, and they may have to expend physical effort meeting you, travelling to your store, clicking buttons or filling out forms. Are their exertions going to be worthwhile?” Her suggestion is to eliminate friction in the process (Amazon did this for its customers with one-click shopping), reduce data entry required by the customer, have a website and store that is easy to access and navigate, and keep your communications jargon and acronym-free.
- Credibility: If the product or service doesn’t work out for their company, the person authorizing the purchase can lose a lot of credibility. They likely won’t talk about this, but you can bet it’s on their mind. You have to develop their confidence and trust in you. That means building media coverage, testimonials and case studies that stress your credibility. Obviously you want to maintain your accreditations and affiliations. Finally, ensure you do what you say you’ll do.
Loss aversion is powerful. It occurs not just on the tennis court but on the selling court.
Assessing digital tools
As we keep developing new digital tools to aid us (and wondering whether they only serve to distract and oppress), digital minimalists warn us to be more intentional about the technology we allow into our life.
Georgetown University professor Cal Newport, author of two books on productivity, sets out on his blog three types of value that technology can offer to your life, as a first step to evaluating new possibilities:
- Core value: If the new technology so significantly affects an aspect of your life that you couldn’t do without it, that represents core value. It adds up to a life well-lived. He gives an example a soldier deployed overseas who can connect through FaceTime with family. That’s essential, core value.
- Minor value: A technology might simply provide some moderate positive benefits in the moment, as when you browse a comedian’s Twitter feed for a laugh or play a quick online game to relax.
- Invented value: A technology offers invented value if it solves a problem that you didn’t know existed before the tool came along. “A Snapchat user, for example, might note that it’s the most convenient app for keeping friends posted on what you’re up to throughout the day (it doesn’t even require typing!). But this same user, in an age before Snapchat, probably didn’t even know he wanted constant updates from his friends -- the app created the behavior that it optimizes,” he writes.
That may seem esoteric, but it helps you evaluate the technology that you use so you can build a sensible strategy. For example, he suggests you might actively seek out technologies that provide core value, be selective about those that only provide minor value and avoid technologies that only provide invented value.
How to improve communication with your staff
British leadership coach Barbara Nixon has a simple technique for improving your communications with staff that takes just 15 minutes to plan out:
- Step 1: Start by setting the timer on your phone to five minutes and quickly scribble down all the ways you can communicate with your staff. Don’t limit yourself to what you – or others in your company – do. Think broadly.
- Step 2: Draw a triangle and split it into five sections from top to bottom, labelled: annually, half-yearly, quarterly, monthly, and weekly. Now, in the remainder of the four minutes assigned to this task, choose something from the previous list that you feel will be effective for each time frame. For example, performance appraisal might go into the annual slot. If a certain time period seems inappropriate for your team, leave it blank.
- Step 3: In the next six minutes, plot dates for each to happen in the next half year.
- The time to double down in a casino is when you’re ahead and playing with your winnings – the “house money,” notes consultant Alan Weiss. Similarly, he argues that the time to market even more ferociously is when you are doing well and there is no pressure to pay the bills.
- Dilbert cartoon creator Scott Adams says analogies are a good tool for explaining a concept to someone for the first time. But because analogies are imperfect, he feels they are the worst way to persuade: Discussions using them inevitably dissolve into arguments about the quality of the analogy, not the underlying situation.
- Only 2 per cent of companies met or exceeded their sustainability targets, according to a study by Bain & Co. that interviewed managers at 300 companies. A major reason was that the key driver of company efforts in this field was “public reputation” rather than a genuine desire to help the environment or improve workplace conditions. The consultants argue CEOs must lead by example on this matter, and companies should make their goals public, even if it means extra scrutiny.
- Trainer Dan Rockwell says one bad apple can distract and defeat teamwork. Therefore, throw people off your team who give in quickly, those who can’t let go when they don’t get their way and smug know-it-alls who are content with their own growth but unconcerned with the growth of others.
- Way of Life is a free app that keeps score and provides a visual record as you try to break a bad habit or create a good one, says consultant Suzi McAlpine.
Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online column, Power Points. E-mail Harvey Schachter