A salesperson’s job is to guide prospects through the sales process and nudge them to make a purchase — but it’s not that easy. There are a lot of factors that can affect the outcome of a sales call, many of which are out of your control.
One of the most powerful factors that can influence sales outcomes is something called a cognitive bias. Cognitive biases are mental shortcuts that help us make decisions faster, but can also lead to errors in judgment. This type of bias can affect both you and your prospects during the sales process, making it important to be aware of how they work and how to avoid them.
In this post, we’ll go over five common cognitive biases that can affect sales outcomes.
1. Anchoring bias
When a customer is considering a purchase, they tend to anchor to the first piece of information they receive. This could be a price, a feature, or a piece of data. After that, they compare all other information to the anchor.
This is why it’s so important to put your best foot forward when you first engage a prospect. If you tell them the price of your product is $2,000, but you don’t tell them that until the end of the sales process, they’ll likely be shocked and it could ruin the deal. Instead, be upfront about the price and other key information early on. For SaaS teams, using order to cash software ensures pricing anchors set during the sales process flow directly into contracts, invoices, and billing without manual re-entry that introduces discrepancies later. This will help you set the right expectations and build trust with your prospects.
2. Confirmation bias
Confirmation bias refers to our tendency to look for information that supports our existing beliefs. We also have a tendency to ignore information that challenges those beliefs.
This can be a problem for salespeople when they are trying to qualify leads. If they are overly focused on finding information that supports the idea that a lead is a good fit for their product, they may miss red flags that indicate otherwise. To reduce this risk, many teams are adopting
AI agents in sales to objectively analyze lead data with AI and highlight both positive signals and potential red flags.
3. Bandwagon effect
The bandwagon effect is a psychological phenomenon in which people are more likely to adopt a belief or a behavior if they see that others are doing the same.
In sales, the bandwagon effect can manifest in a number of ways. For example, if a prospect learns that one of their competitors is using your product, they may be more likely to buy it as well. On the other hand, if a prospect learns that no one else in their industry is using your product, they may be less likely to buy. Local service categories run on a consumer version of this, which is why pest control reputation management matters more than most owners realize. A homeowner with 47 five-star reviews next door is the neighborhood’s bandwagon.
4. Recency effect
The recency effect is the tendency to remember recent information better than earlier information.
When it comes to sales, the recency effect can cause problems if a salesperson focuses too much on the last interaction they had with a prospect. For example, if a salesperson had a great call with a prospect and then follows up with an email that doesn’t go well, they may be more likely to remember the email than the call.
This can lead to missed opportunities, as the salesperson may be less likely to follow up with the prospect again.
5. Framing effect
The framing effect happens when people change their decisions based on how information is presented to them.
For example, if you are selling a product and you say it is 90% fat-free, that is more likely to be perceived positively than if you say it contains 10% fat. Even though the information is exactly the same, the way it is framed can change the outcome of the sale. For instance, presenting an offer with price matching can frame the purchase as a low-risk decision, even if the actual price remains unchanged.
Conclusion
Of course, we’re all human, and it’s nearly impossible to make every decision in a completely logical manner. However, we can mitigate the impact of cognitive biases by acknowledging their existence and working to make decisions based on facts, rather than emotions.