The Presentation Mistake You Don’t Even Know You’re Making

For the first time ever, I am re-publishing a fascinating article that recently appeared in the Harvard Business Review, sent to me by one of our clients. In fact, it was so compelling that I have featured it in our December newsletter. I have not yet had the pleasure of meeting Dr. Heidi Halverson, but It’s clear that I like the way she thinks! And, I think you, too, will benefit from her perspective as well. Enjoy!

 

The Presentation Mistake You Don’t Know You’re Making

By Dr. Heidi Grant Halvorson  |   December 7, 2012

During an interview, your potential new boss asks you to briefly describe your qualifications. At this moment, you have a single objective: be impressive. So you begin to rattle off your list of accomplishments: your degrees from Harvard and Yale, your prestigious internships, your intimate knowledge of essential software and statistical analysis. "Oh," you add. "And I took two semesters of Spanish in college." Not technically an impressive accomplishment, but since the company does a lot of business in Latin America, you figure some Spanish is better than none at all.

Or is it?

Actually, it isn’t. You’ve just fallen victim to a phenomenon that psychologists have recently discovered, called the "Presenter’s Paradox." It’s another fascinating example of how our instincts about selling — ourselves, our company, or our products — can be surprisingly bad.

The problem, in a nutshell, is this: We assume when we present someone with a list of our accomplishments (or with a bundle of services or products), that they will see what we’re offering additively. If going to Harvard, a prestigious internship, and mad statistical skills are all a "10" on the scale of impressiveness, and two semesters of Spanish is a "2," then we reason that added together, this is a 10 + 10 + 10 + 2, or a "32" in impressiveness. So it makes sense to mention your minimal Spanish skills — they add to the overall picture. More is better.

Only more is not in fact better to the interviewer (or the client or buyer), because this is not how other people see what we’re offering. They don’t add up the impressiveness, they average it. They see the Big Picture — looking at the package as a whole, rather than focusing on the individual parts.

To them, this is a (10+ 10+ 10+ 2)/4 package, or an "8" in impressiveness. And if you had left off the bit about Spanish, you would have had a (10 + 10+ 10)/3, or a "10" in impressiveness. So even though logically it seems like a little Spanish is better than none, mentioning it makes you a less attractive candidate than if you’d said nothing at all.

More is actually not better, if what you are adding is of lesser quality than the rest of your offerings. Highly favorable or positive things are diminished or diluted in the eye of the beholder when they are presented in the company of only moderately favorable or positive things.

Psychologists Kimberlee Weaver, Stephen Garcia, and Norbert Schwarz recently illustrated the Presenter’s Paradox in an elegant series of studies. For example, they showed that when buyers were presented with an iPod Touch package that contained either an iPod, cover, and one free song download, or just an iPod and cover, they were willing to pay an average of $177 for the package with the download, and $242 for the one without the download. So the addition of the low-value free song download brought down the perceived value of the package by a whopping $65! Perhaps most troubling, when a second set of participants were asked to play the role of marketer and choose which of the two packages they thought would be more attractive to buyers, 92% of them chose the package with the free download.

More just seems like it must be better when you are on the presenter’s end, even though it doesn’t seem that way at all when you are on the consumer’s end. And somehow, despite the fact that we are all both presenters and consumers in our everyday lives, we just don’t make the connection.

The same pattern emergences when you are creating deterrents or negative consequences to discourage bad behavior. In another study, participants were asked to choose between two punishments to give for littering: a $750 fine plus two hours of community service, or a $750 fine. 86% of participants felt that the fine plus community service would be the stronger deterrent. But they were wrong — in fact, a separate set of participants rated the $750 with the two hours of community service as significantly less severe than the fine alone. Once again, they reasoned that the overall punishment was on average less awful because two hours of community service isn’t so bad.

If the bias in presenter thinking is so pervasive, how can we stop ourselves from making this kind of mistake? The short answer is that we need to remind ourselves when making any kind of presentation to think of the big picture. What does the package I am presenting look like taken as a whole, and are there any components that are actually bringing down its overall value or impact? Three 10’s and a 2 is not better than three 10’s. A free carwash with the purchase of any new car is not going to make your cars seem more valuable. If your very expensive luxury hotel rooms offer ocean views, silk sheets, and a Jacuzzi, don’t mention the ironing board in the closet or the coffeepot. And unless you speak Spanish well, keep your ability to count to ocho and ask where la biblioteca is to yourself.

HEIDI GRANT HALVORSON

Heidi Grant Halvorson, Ph.D. is a motivational psychologist and author of the HBR Single Nine Things Successful People Do Differently and the book Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). Her personal blog, The Science of Success, can be found at www.heidigranthalvorson.com. Dr. Halvorson is available for speaking and training. Follow her on Twitter @hghalvorson.

Don’t Drop Your Towel

A husband was just entering the shower as his wife was getting out. Unexpectedly, the front doorbell rings. So, the wife quickly wraps herself in a towel and goes to the door. Bob, their next-door neighbor is innocently standing there.

When he sees that she is wearing only a towel, Bob says, “I will give you $800 right now to drop that towel.” She thinks for a moment and realizes that $800 is a lot of money. Sure enough, she drops the towel and presents herself to him. “Nice,” he says and then hands her the $800 he had promised.

Back in the bathroom, hubby gets out of the shower and inquires, “Who was at the door?” “Bob, from next door,” she replies. “Great!” he says. “Did he bring over the $800 he owes me?”

The moral to this metaphor:  Know the whole story before you act on partial information.

Overcoming Customer Skepticism

With the Thanksgiving holiday just around the corner, most of us are counting our blessings. The short list of what we are thankful for may include family, friends, customers, and the camaraderie of fellow employees, just to name a few.

One thing I am thankful for is new ideas, especially ones that can give our clients a considerable advantage in their respective marketplaces. Perhaps the generation of new ideas is why Question Based Selling has continued to evolve, from its early beginnings as a questioning strategy, to today’s fully vetted methodology for engaging more prospects in more productive sales conversations.

Another area of continued change is the level of customer skepticism toward vendors with the stress of tightening budgets, smaller work forces, and the looming deficit. This should be of no surprise for those of us in sales and marketing, particularly as we head into 2013. After all, our customers feel much the same as we do. For example, how long does it take you to identify a credit card solicitation you receive by mail and throw it in the trash?

Overcoming the customer’s natural skepticism can be risky business. One approach to try is to push harder and harder, except that this usually causes prospects and customers to push back. You could also try to grovel or beg for the business, but that usually puts you in a weak negotiating position down the road.

In Question Based Selling, we don’t try to “overcome” the customer’s natural skepticism. Instead, we embrace their skepticism as a way to cull out many of the pretenders who would otherwise be competitors. Allowing the competition to be held at arm’s length is a great strategy if you can get an “in” with an otherwise standoffish customer. How can you give yourself a strategic advantage? Great question!

Since I first developed QBS in the mid-1990’s, I’ve spent a great deal of time on the idea of leveraging curiosity. The question for salespeople is simple: “What are you doing to leverage curiosity in the sales process?” The most common answer I hear back when asking this question is, “Huh?”

Isn’t that strange? Curiosity is the genesis of each and every sale, yet it continues to be the least talked about subject in traditional sales training courses. Let me put it this way. If a prospect or customer isn’t the least bit curious about who you are or what you can do for them, they won’t want to spend time with you. Would you agree? Fortunately, the opposite is true. As prospects become more curious about who you are and what you can do for them, you get more mindshare and find yourself interacting with key people in target accounts.

So, why not take a look at your own approach. Ask yourself, what am I currently doing to leverage curiosity in the sales process?

2013 QBS Boot Camp: March 7-8

“There has never been a better time for sellers to do everything possible to make themselves invaluable to their customers, colleagues, and their company.”         -T. Freese

We’re very happy to announce our next QBS Summit! If you would like to renew your focus on increasing your own sales effectiveness, or give your entire sales team an unfair advantage over the competition, join us on March 7 - 8 for the 2013 QBS Boot Camp.

The event, featuring QBS Research founder Tom Freese in Atlanta and will be held on Thursday, March 7th and Friday, March 8th.

The learning environment will be highly interactive, with participants from a variety of industries including technology, financial services, healthcare, consulting, insurance, real estate, manufacturing, advertising, hospitality, and retail, and feedback from previous QBS Summit events has been “off the charts.”

With limited seating, reserve your seats early since we are expecting a full house. You might also want to bring extra pencils and a stack of writing pads for note taking.

“Tom! I wanted to thank you for an amazing training two weeks ago-my head is still spinning from all of the great info. I met with our Regional Manager yesterday and he wants you to train the rest of our team. You will be hearing from us very soon…”    -Liz B., Michigan…your newest QBS groupie!

Click for Early Enrollment Discount &  SUMMIT DETAILS.

Flattening the “Hockey Stick”

One of the challenges many sales organizations face these days is the hockey stick pattern as sales tend to spike at the end of a fiscal quarter. This phenomenon occurs in response to the pressures of Wall Street, which drive companies and salespeople to pull in every piece of business they can to meet quarterly financial goals. As a result, lucrative discounts are often dangled in front of prospective customers to entice them to move forward with a purchase. Of course, after quarter-end passes and the special discounts go away, sales slow down again until this spike recurs at the end of next quarter.

Quarterly spikes in sales pose significant challenges for the revenue side of a business. They jeopardize the accuracy of the revenue forecast and increase the risk of missing the company’s sales projections. A quarterly spike in revenue is also problematic for the operations side of the business. To stay ahead of demand, companies either need to be able to accurately predict how much product to manufacture or risk potential delivery problems when the sales backlog exceeds production.

While I was always focused on achieving my sales goals by the end of each quarter, my employer wanted us to flatten this hockey stick pattern. They wanted the revenue, but they did not want the sales organization to wait until the end of the quarter to close business. Therefore, in an attempt to achieve consistency throughout the quarter, I stopped trying to entice potential buyers with quarter-end discounts and instead changed my approach.

Here’s what I’d do. For deals that have a legitimate chance of closing by the end of a fiscal quarter, I approached the customer (in advance) and say, “Mr. Prospect, we are very interested in earning your business. But since Wall Street follows our company very closely, we would also like to meet or exceed analyst’s expectations for the quarter. Therefore, we would much rather consummate a sales transaction on March 31^st, than April 1^st. We don’t want to push you into anything, but we would like to offer an additional discount or incentive that makes a March transaction mutually beneficial. The question is, does it make sense for us to have a more specific conversation about the possibility of wrapping this sale up in March?”

This positioning will intrigue most customers enough to ask, “What’s the incentive?” Although theirs is a legitimate question, now is not the time to get into specifics about the special offer. Your objective here is not to propose a discount, at least not yet. You are simply conveying that your company is interested in pulling business into the current quarter and you want to know if it makes sense to pursue a more in-depth discussion. If they indicate that an end-of-quarter transaction is indeed possible, then I set up a meeting where we can sit down and discuss possible incentives. If they push you to tell them the incentive up front, you say, “I don’t know what we can offer. I haven’t yet gone to management on your behalf. At this point, I just wanted to know if you were close enough to make a decision to warrant the conversation.” If a decision is close, your prospect will want to see your offer. This creates a window of opportunity for you to package and propose an incentive that will make a March transaction mutually beneficial.

Talk Dollar Discounts, Not Percentages

When offering special incentives, I encourage salespeople to stay away from percentage discounts. Percentages usually are non impactful. So many companies out there are offering such steep discounts (all the way up to 70% off), that if you are not prepared to offer an additional 30%, 40%, or 50% off, your percentage discount will likely sound small and insignificant to someone who is constantly hearing about larger discount percentages.

In fact, I never talk percentage discounts. Instead, I put any special incentives I plan to offer in hard dollar terms. This gives your discounts more teeth by making them sound like better incentives. When I want to wrap up a quarter-end deal, for example, I might say, “Mr. Prospect, when we last talked, I asked if it would make sense to offer you a special incentive to move forward with a decision this quarter.” With my revised quote in hand, I would then add, “If you are ready to move forward with a purchase, we would be willing to discount your cost by an additional $4,500. Essentially, it’s worth $4,500 for us to book your order on March 31^st, as opposed to April 1st.”

I also say the following as a disclaimer. “Mr. Prospect, this incentive is not intended to pressure you in any way. We merely want to offer those customers who are ready to make a decision a mutual incentive to pull the trigger one day sooner.” Taking the pressure off with a softer approach is almost always more productive. We’ll talk more about this later.

This positioning also protects sellers against having their prospects come back in a month asking for the same special discount. This happens a lot to those sellers in corporate sales who just slash and hope. Offering a specific discount for a specific reason, however, puts you in a strong position to explain to prospects that the discount was offered as an incentive to book the business in March, and there is unfortunately no way to go backward in time.

Pulling Deals Forward into Months One and Two

After offering special incentives at the end of a quarter, and wrapping up their deals, sellers are often left with a skimpy forecast. Of course, buyers have learned to hold off another three months knowing that the best deals won’t come until the end of next quarter. As a result of this built-in buying cycle, the hockey stick pattern becomes a self-fulfilling prophecy. Fortunately for sellers, the same strategy we used for closing deals at quarter-end can also be used to pull deals up into the first two months of the current quarter.

For those customers who were not ready to have a conversation about moving forward with a purchase at the end of last quarter, don’t offer a special incentive at the end of the quarter. Why bother if they’re not ready? Instead, I wait until the deal begins to ripen, say on April 17th. At that point, I approach prospects saying, “We are very interested in earning your business. But one thing my company is trying to prevent is the traditional hockey stick spike in revenue that occurs at the end of every fiscal quarter. Essentially, we would like to pull deals forward in the quarter—into months one and two. Therefore, we would like to see if it makes sense to explore opportunities that would create a mutual incentive to consummate this sale earlier in the quarter rather than waiting until the end of June?”

I would recommend against offering customers a special incentive in December, and then if they don’t move forward with a purchase, showing up again in January. I addressed this issue earlier by making the point that I only offer special incentives if there is a legitimate chance that the sales will close within the targeted timeframe.

The hidden beauty of this technique is that it gives salespeople many more milestones (twelve month-ends) for closing sales. Most of your competitors will only be offering special deals four times per year. You, on the other hand, can craft all kinds of scenarios that will accelerate your customer’s timeframe and satisfy your objectives for pulling revenue forward into October and November, instead of waiting until the last week of the fiscal year.

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