Matt Dixon: prediction

Transcript context

…not a top priority for them or their organization. It's got to be one of those reasons. What salespeople have been armed to do is go out and dial up the FOMO and make the customer sweat a little bit. The first thing they do is they say, "Lenny, remember the demos and the proof of concept trial, how excited you were and those benefits, you got to pay for it. You're not going to get all those great benefits for your organization unless you sign the agreement." If that doesn't work, I'll try to kind of scare you into action by dialing up the fear, uncertainty and doubt and saying, "Lenny, you told me about these problems in your business. You guys are really struggling right now. By the way, did I mentioned, we're working with all of your competitors and they're seeing tremendous benefits from our product and you're going to be left in the dust and those problems you brought up with me, they're not going to solve themselves." I'm trying to create that burning platform a little bit for the customer and get them to realize the cost of their inaction. There is a cost of doing nothing, and if those two things don't work, what most salespeople go to is the 10% discount that's only good this quarter. It's like the price driven urgency. Maybe this will be the thing you need to just get you over the finish line. What we were so surprised by which led us to the question you asked, Lenny, was that 87% of the time when salespeople do that dial up the FOMO in those moments, especially with a customer who says that they're ready to move forward, but they start to backpedal and waffle and waiver and become hesitant dialing up the FOMO backfires 87% of the time. In other words, it increases the odds, the deal will be lost to no decision. If it weren't for that finding, we never would've even bothered asking the question about why do people end up, why do we lose deals to no decision, why do customers make no decision, but this was really puzzling because it flew in the face of everything we talked about, including in Challenger, to be totally candid. We talked about how challengers are exceptional at breaking the customer's status quo bias by showing them the pain of same is worse than the pain of change. Again, overcoming that inertia, that not just individuals but organizations suffer from. Challengers are really good at that. Here, we see that the tactics that you might associate with challenging actually kind of backfire, which was, as the author of The Challenger, still a little bit troubling to me, but we'll come back to that, but I think what we realized was we got it right, but we got it kind of half right. We went into the data and we asked a slightly different question, which is why are deals lost in no decision? What drives that? We found that actually, there are a lot of deals that are lost because the customer does actually prefer their status quo. That is status quo bias. They believe what they're going to say is good enough, what you're talking about, it's not a compelling enough reason to change or this is not a top priority. heir status quo. That is status quo bias. They believe what they're going to say is good enough, what you're talking about, it's not a compelling enough reason to change or this is not a top priority. Those are all status quo preference reasons, but it turns out those are only 44% of the no decision losses, 56% of no decision losses are customers who want to buy but can't buy because they're stuck in this no man's land of indecision, and that indecision itself stems from their fear of failure, which you put your finger on earlier, and this is the part I found so fascinating, so we dug into the psych research. We read probably 30 years of cognitive psychology journal articles, many of them from Dutch universities, which I find very interesting, but a fairly very big into this stuff. A lot of the Kahneman and Tversky work around loss aversion and prospect theory, et cetera, and one of the big findings we came across is that there's actually a more powerful human bias, even more powerful than status quo bias that rears its ugly head and causes indecision, and that is called the omission bias. The omission bias is, if you get down to it, is the fact that people don't want to be blamed for making decisions that lead to a loss. In the human mind, there are two types of loss that we think about. We all like to avoid loss, but not all loss is created equal. There are losses that happen when we do nothing, and then there are losses that happened because we did something. We made a decision, we picked a vendor, we executed a contract, and then something bad happened. It turns out that in the human mind, people are okay with missing out. They are not okay with messing up and being blamed, and this is really powerful. It's even more powerful than status quo bias, as I said. The shorthand for salespeople is this, dialing up the FOMO can be very effective to overcome status quo bias, but knowing that every human being, including all of your customers, who I include in that definition of human beings are definitely afraid of being personally blamed if things go wrong. The FOMU actually matters more than the FOMO. The FOMU is the fear of messing up or in the not safe for work version of your podcast, I'd say FOFU, but your listeners can figure out what that stands for on their own, but this is really powerful for salespeople, right to understand. Look, if you are trying to scare your customer into action, you're going to miss out on these benefits. You're going to miss out on solving these problems. You're just going to pay more later if you don't say yes now. What you're really doing is using scare tactics, but you're trying to scare somebody who's already afraid. The problem is they're not afraid of the thing you think they're afraid of. They're not afraid of missing out, they're afraid of messing up. We've got to address that as salespeople. We've got to help instill the confidence in the customer that you're making a great decision. I've got your back. You're going to look like a hero, not like a fool and that's really what The JOLT Effect is about. It's about how the very best salespeople execute that. e making a great decision. I've got your back. You're going to look like a hero, not like a fool and that's really what The JOLT Effect is about. It's about how the very best salespeople execute that. It wasn't that we're wrong with Challenger, it's just the story was kind of incomplete. You got to break status quo bias. If you don't do that, you're never going to have an indecision problem, but even once you overcome the customer's indifference and their status quo bias, you got to second battle you've got to fight, which is you've got to instill the confidence and make them feel good about this. Frankly, leap of faith they're about to take and their fear, you got to deal with the fear that if something goes wrong, they're worried that they're going to be blamed for it.…

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