Tune in to this episode. Paul dives deep into the driving forces behind customer decision making in tough times.
In tough times, the most dominant driver of customer decision making is ...
“Cost cutting is an opportunity in disguise.”
Remind the customer of the value of your solution.
During tough times, “our instincts for self-preservation kick in.”
Help the customer realize that, even in tough times, now is the time to act.
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What drives customer decision making in tough times?
(Transcribed from podcast)
Today’s episode is all about how customers think. Specifically, we want to know: How did tough times impact your customer’s decision-making process? Remember that when your customers are making decisions, they’re not just making decisions based upon how they think, how they feel. External factors are also going to come into play. So, that’s the question we are going to answer on today’s show: What drives customer decision making in tough times? We’re going to dive deep into that question today.
Before we do, a quick shout-out to Andrea over at The Creative Impostor Studios. You probably have an idea for a podcast. Think about podcasting. It’s such an easy way to connect with your audience, to build a brand, to support your customers even. There are so many different podcasts out there. I’m sure you have an idea for one. If you’re thinking of getting started, now is the time to do it. Make it your New Year resolution. So, reach out to Andrea. If you need some help, we’re going to have a link to Andrea’s webpage on this episode. Check it out. Andrea is your go-to guide and resource to start your podcast. Visit with her; reach out to her. She can help.
Also, Value-Added Selling has a complete section on the psychology of decision making. Some of the concepts and ideas we’re going to talk about today also appear in the book. So, pick up your latest copy. Hey, the holidays are around. Pick up a copy for your sales colleague, your sales manager. Pick up two or three. Spread the word.
Let’s get back to that question. What drives customer decision making in tough times? It’s important that we understand how buyers think. If we’re going to change someone’s mind, if we’re going to influence them, we have to understand how they think. Meaning, we have to understand what motivates them. What are their desires? And, just so you know, that can change. That can change depending on the current environment. When things are good, things are going well, people have different motives. When things are tough, their motives change. We’re going to dive deep into that idea.
Now, there is one thing you need to know about customer decision making in tough times. Fear is the most dominant driver of their decision in tough times—fear. Fear is always at play when we’re making decisions, but during tough times, fear becomes a bigger factor. Fear is going to be that primary motivator, and customers are fearful of a lot of things during tough times. This fear leads to uncertainty. They’re not sure what the future holds. They’re not sure what is going to happen. They have trouble seeing past the tough time that they’re currently in. And this includes the pandemic that we’re currently facing, or it could be during a recession. They’re just uncertain about the future. And that uncertainty is because of their fear.
The other attitude of buyers is that resources are scarce in tough times. Resources are scarce, and buyers believe this because of their fear. Their fear of their company losing sales; the fear of their company not performing at levels that they’re accustomed to. This fear drives this perception that there’s a scarcity of resources. And sometimes this perception is true, and sometimes that perception is not. But, either way, buyers now believe that resources are scarce. Now, anytime resources are scarce, buyers will fear misusing that resource. Let’s say you’re given a hundred dollars to buy groceries for the entire month. That means every dollar that you spend is going to be heavily scrutinized. You’re going to be fearful of misusing it. You want to make sure that you get the most for the money that you do have. That stems from fear, once again.
Also, another form of fear that will manifest as an attitude is the fear of missing opportunities in tough times. You know, that’s another fear that people have during tough times is they fear missing out on opportunities. Some buyers will look at tough times as opportunities to invest in new equipment, buying opportunities to expand their inventory. And some of their fears include missing out on those opportunities.
Let’s talk about how all of those feelings, those thoughts, translate into action. So again, buyers are fearful. And because they’re fearful, they’re going to perceive resources to be scarce, they’re going to be uncertain about the future, and they’re going to fear missing out on an opportunity.
So, let’s see how that translates into action. First of all, because of the buyer’s fear and the uncertainty, they will cut costs. Don’t be surprised if many of your customers decide to hold back on some spending. They cut their budgets; they reduce the projects that they have scheduled with you. They’re going to cut costs in any way they can. Some salespeople look at this and they think that this is a negative thing. But remember that cost cutting is actually an opportunity in disguise, because cost cutting opens up the door to all the ways that you can help save cost for your customer. Think about this. If you’re selling a solution that can save labor hours, or they can save on inventory costs, whatever it might be, now is the time to re-present that solution to your customer because they’re more open to cost cutting ideas during tough times. That presents an opportunity.
Now, another thing buyers will do, because of their fear, they are uncertain, and because of the uncertainty, they’re going to hit the pause button. Let’s say you were working on a project, maybe it’s to implement new software, whatever it might be. Due to the uncertainty of everything, it will cause people to hit the pause button. They want to wait it out; they want to see what happens. And they might tell you, “Hey, let’s move on this next quarter. Let’s see how things shape up by the end of the year and then we’ll revisit this.” That’s the action we’ve got to be aware of is that they might hit that pause button.
To counteract that, we’ve got to remind the buyer that, “Now that we have time on our side, now is the time to act. Because once things do pick up (which they’re going to pick up into next year) we might not have the time to move forward. Let’s work on what we can work on now and continue progressing forward.” We have to remind the buyer that that resource of time might not be available next year.
Another thing buyers will do, because of their fear, because of the uncertainty, they will herd. You hear that term, herding or herding mentality. You think of goats and sheep and everyone getting into a herd. It’s an animal instinct. Animals get into herds because there is strength in numbers. You know, a bunch of sheep are going to get together and work with each other to combat a wolf that is out there in the wing[s], trying to grab some of them. Herding is a safety mechanism. It’s a survival mechanism, and many of your customers are going to begin doing this. Because they’re fearful, they’re uncertain, they’re not sure what’s going on, they are going to herd. They’re going to herd around other decision makers within their organization.
Think about this. Let’s say, you presented a solution to your customer. Now they start experiencing tough times. They’re feeling a little bit uncertain. They’re not sure what to do. They don’t want to make the wrong decision and they don’t want that decision to be scrutinized: “You know what? I have all this fear as a decision maker, I’m going to get more people involved. I’m going to get my boss involved. I’m going to get other departments involved. That way, if they are all involved in making this decision, nobody can pinpoint me as the one person who made the bad decision.” Groups mitigate risk. And that’s why many of your buyers will start to incorporate more decision-makers when they go through tough times. Be aware of this; be prepared for it.
One final thing we need to think about, when people are fearful, when they’re uncertain, when they’re not sure what’s going to happen, our instincts for self-preservation kick in. Think about this. The Great Recession wasn’t that long ago. During the Great Recession, many companies experienced layoffs. Many companies experienced tough times that forced them to get rid of thousands of employees. Many of our customers remember those tough times. And now that we’re knocking on the door of tough times once again—with this pandemic, with everything, we’re not sure how it’s going to end up—some people are concerned, and those self-preservation instincts are going to kick in. They’re going to realize, “Okay, I need to do what I can to create value for my employers so they keep me around, so they don’t cut me, so they don’t realize that maybe my job isn’t as important as it was pre-pandemic.” People are thinking about that. And you can help your customers that are thinking like that.
I’ll give you an example. I was working with a group and they are selling solutions into the automotive industry, without giving too much information. The automotive industry was facing tough times while we were engaged in this training. And the salesperson said, “Look, here’s the problem. I’m reaching out to this buyer, and our solution will save them money. I’ve documented cost savings. Yet, this buyer does not want to move forward. They said there’s just too much going on right now. It’s just not the right time.”
And so, I talked to the salesperson. I said, “Look. Remember that this group that you’re trying to sell to—this buyer, this decision-maker—they’re in the auto industry which was hit really hard with layoffs in the last great recession.” I go, “We need to hint at some self-preservation here to motivate this buyer.”
So here’s what we did. We put together a message. And here’s what the message basically said:
Dear Mr. Customer. I realize that, right now, the timing might not look great. But this is actually the perfect time to move forward. The solution that we have presented to you is going to help save cost in the long run. Right now, your industry is facing tough times, which means your management is going to be more open to cost-cutting ideas. If you can present this idea to your boss, they’re going to be appreciative for your effort in helping to save the company money. Wouldn’t it make sense to move forward now versus later?
All we did there is we hinted at self-preservation. We hinted at the fact that, “I know times are tough right now. You better demonstrate the value you bring to your employer.” Now, obviously the buyer was able to read in between the lines and the salesperson was able to progress things forward.
When we’re facing tough times, we think different, we buy different, we have different motives. Remember that during tough times, your buyer’s primary motivator is going to be fear. Because of fear, they’re going to feel uncertain. They’re going to think about the perception that resources are scarce. They’re going to have a fear of missing out on certain opportunities. And all of that is going to translate into different action, like cost-cutting and herding, and also, self-preservation instincts. We have to be aware of that. We have to immerse ourselves in the customer’s mind. We have to think as they think. And once we think as they think, then we can begin persuading them.
Make it a big day.