29 Jun

Why people buy and why they say no

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Would you try and sell a Porsche 911 to a couple with a £10,000 budget and four young children? Your immediate response is likely to be: ‘Of course not – why would you?’ And yet, this happens often. Salespeople jump in with a pitch instead of a question – and then wonder why they’re not hitting their targets.

So why do people buy – and why do they say no?

If you want to convert more customers, you need to understand System 1 and System 2 thinking– expressions coined by the world-renowned Daniel Kahneman and which refer to two types of thought process: (i) instinctive; and (ii) emotional. Using key aspects of Kahneman’s approach, we’ll show you how to change a customer’s thought process by making them think analytically (instead of habitually).

 

Why people buy: 5 big reasons

1. Because they can afford to

Expense is a relative term – which means what’s affordable to one person is a small fortune to another. An affluent person wouldn’t think twice about spending £100.00 on a bottle of Bollinger – but someone on a low income would need to give that serious thought. Sometimes a buying decision boils down to something as basic as affordability.

2. Because they’re loyal to a brand

People become attached to brands. So much so, the buying process becomes habitual, rather than something they interrogate. Brands also make people feel part of an exclusive group. Following the herd becomes an inclusive experience that the customer is reluctant to give up – no matter how well a rival product might solve their problems.

3. Because they don’t want to miss out

The less there is of something, the more people want it. These buying panics often happen around Christmas. Remember when toy shops couldn’t supply enough Buzz Lightyear toys – or when gaming retailers ran out of Nintendo Wii’s? Demand spiked and sales went through the roof (as did cost). Why did this happen? The fear of missing out (FOMO) was driven by a fear of not fitting in. Parents didn’t want their children to be without the latest gadget – so did everything possible to get one.

4. Because they really want to

This might seem a bit simplistic. Why do people buy? Because they really want to. And yet impulse is one of the primary drivers that pushes people to purchase something. The product or service in question is something they can’t do without – and they won’t think twice about parting with their hard-earned money to get it.

5. Because they really need to

Sometimes, impulse can be driven by an urgent need that necessitates paying for something  without much forethought. Examples could include replacing a car exhaust, servicing a boiler, or a last-minute supermarket pitstop to get supplies.

 

Buying behaviour can, therefore, be divided into two categories: impulsive and planned. To successfully sell, you need to identify your customer’s mode of thinking so that you can ask the right questions and tailor a solution to their needs.

 

Why people say no – system 1 thinking

System 1 thinking requires little or no thought. Buying a chocolate bar is a prime example. Do you stop to look at the price of a Wispa or Kitkat? Unlikely. You buy while on automatic pilot – because you know and like the brand. This status quo thinking is learned, biased, illogical, and resistant to the idea of change.

Why people say no – system 2 thinking

System 2 thinking is unbiased and logical. A range of options must be considered, thereby removing a gut reaction from the buying decision. The person has to stop and think: can they afford a brand new car? Which model should they get? Which is the most economical? 

 

How to overcome objections

Whichever system your prospect is stuck in, there are tactics you can deploy to turn the situation around. You can read more details about handling objections here.

Here are three examples 

  1. Move bias out the way. Instead of hearing what you want to hear, listen to what your prospect is saying – then use questioning to fill in gaps where responses are unclear. 
  2. Prospect stuck in status quo mode? Then ask them a provocative question that forces them to consider alternative outcomes. Any question that starts with “What would it mean to you if…” or “How would it impact your business…” will provoke a considered thought process about the outcomes of a new direction, or inaction.
  3. Have you identified all objections? Sometimes a prospect doesn’t know there’s another problem. It’s essential that you to tease out any other issues that the prospect might have, or be facing.

 

Next step – shifting gear from system 1 to system 2

Let’s flip the scenario. When you talk to a prospect, do you let bias get in the way? It’s all too easy to think: ‘I’ve heard this objection before – then refer to your telesales script to reel off the pre-prepared answers.

How about reframing the prospect’s question into one of your own. What problems would they experience by not buying your product or service? At this point, they’ll go into problem solving mode and be more receptive to any solution you provide.

 

Apply this method to your marketing messages too

System 2 thinking isn’t a method reserved exclusively for telesales or face-to-face meetings with prospects. You should apply this approach in your marketing messaging too. Show your audience you recognise their pain points, get them to reflect, then reveal the solution.

 

However you’re communicating, take control of the situation, position yourself as the problem solver, and focus less on relationship building. Solid research exists to back this up. The authors of the renowned book The Challenger Sale – Brent Adamson and Matthew Dixon – assert that helping customers make a decision is the more successful approach.

 

We can help you get more customers

We’re a team of business mentors with experience of running, setting up, and growing many companies companies for ourselves and our clients.  Based in Brighton, we’ve helped startups nationwide accelerate their growth and revenue. Contact us to learn more.

 

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Written by Ben Bennett

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