Moneyball Selling

Six biases working against you and what you can do about them

 Bob Hatcher
CEO, BetterSell Solutions
www.bettersellsolutions.com

Click here for a printable version…

The book Moneyball, by Michael Lewis and the movie starring Brad Pitt were huge commercial successes. They told the story of Billy Beane who totally changed the way baseball chose its players. It was the story of how Beane decided not to rely on the advice of scouts in the field and instead to rely on statistics. It was a remarkable story, but, even Michael Lewis, the author now admits he missed the whole point. He missed the “why”.

The “why” wasn’t that Beane looking for a way to spend his money more wisely than other general managers. Rather he was looking for a way to remove the bias from baseball. His solution was to rely on statistics more than scouts. It turns out he was right, we now know statistics (now call “analytics”) are a far better predictor for the success of a major league baseball team than the opinions of scouts. Scouts are biased. Rather than look at the numbers, scouts would often make statements like “He’s got the best body in the draft. He reminds me of a young Ted Williams.”

Beane changed all that. Little did he know he was leading a revolution based upon behavioral economics. It turns out that even though we think we are rational, bias is a part of human nature. It’s built into all of us whether or not we like it. It turns out that most major league baseball was built upon the bias of scouts in the field!

We’re doing the same for selling. As a seller, bias is holding you back and working against you every day. Obviously, we can’t rely entirely on statistics but in this paper we’ll talk about how dangerous bias is, how to deal with it, and in certain situations, how you can use it to your advantage.

Before getting into how bias affects us in the world of selling, let’s talk about bias in general. We all do three things every minute of our waking lives. We are either receiving information or we are giving information. In between receiving and giving information our mind is busy processing information. Bias affects each of those three processes.

We can first look at how bias affects the world of big-ticket, B2B selling, the selling that involves a salesperson interacting with a prospect either in person or by phone. As a salesperson, you know your job is to help your customer buy. Sometimes it’s about helping them decide about whether they should buy at all, and, often it’s about persuading them to buy from you.

Many of us think we are great salespeople and our prospects will listen and understand the pearls of wisdom that come from our mouths. Foolishly we think that’s all we need to make the sale. Unfortunately, that‘s not likely the case. Your prospect gets information from many more places than directly from you. It inundates them from direct contact with vendors, review of online support discussion forums, LinkedIn groups, and reports from analyst groups such as Gartner and Forrester. Then, they process and filter all that information through their own set of biases.

I couldn’t find much written about behavioral economics applied to selling. In my mind, though, I think it has major applicability because, at its core, buying is about decision-making and that’s what the field of behavioral economics is all about, how people make decisions. As a word of clarification you might wonder why the word “economics” is used. It is because much of the research pertains to how people make decisions regarding money. But the research applies as much to general decision-making and is highly relevant to the world of sales.

Bias affects us two ways…

First, it affects how we accept and put information into our brain. It’s a filter through which everyone (us as sellers and them as buyers) view and interpret the world. For example, our brains interpret ground beef as 90% lean much differently than 10% fat even though they are factually equivalent. Similarly, we hear “we need to move into the enterprise space” and quickly apply our own understanding of what that means. How things are presented to us and the filters we use affect us a lot. Stereotypes also affect us. We see someone driving a Ferrari and we think “Wow, he must be really rich.” Many times our bias turns out to be correct (the average income of a Ferrari owner exceeds a million dollars, and 90% are male). Stereotypes help us use simple rules in a complicated world.

The second way bias affects us is when it’s our turn to talk. We’ve digested info from the prospect(s) and we think we know what we can offer them. The conclusions we draw from the knowledge gleaned from our sales training and our discussions with our prospects affect how we put it into a speech, paper or article. In short, bias has a lot to say about the conclusions we draw from our observations. This is the world of bias and unless we, as sellers understand our own biases and the biases of our prospects, we’ll have an exceedingly tough time selling. For example, we might draw inferences from incomplete data or not ask a question because we think we know the answer already.

Wikipedia lists almost two-hundred cognitive biases so a thorough discussion of each is well beyond the scope of this paper, but there are a few that greatly affect us and deserve attention so we are aware of how, as salespeople, they affect the way we get, receive and process information.

We’ll first discuss how bias affects our understanding of the world, how when we’re out talking to customers and prospects, we may be making big mistakes in receiving and interpreting information.

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(Next page, Loss-Aversion Bias)