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Two stumbling blocks when trying to persuade customers

Category: Blog & News

When you stop to think about it everything in business boils down to influencing people to change their behaviour. From browsing to buying, from reading to clicking, from not investing to stumping up money.

That means most of us spend our time and energy trying to convince people that change is worthwhile. Marketers run campaigns, finance professionals present options, sales people pitch and managers meet. The bad news is that many are going about it the wrong way. The good news is there is a solution.


The persuasive power of Loss Aversion

There are two stumbling blocks when it comes to influencing someone to change their behaviour and they are both related to the behavioural principle of Loss Aversion.

Loss Aversion means we are more motivated to avoid loss than seek gain. In other words, the pain of losing something we already have is more significant than the promise of getting something new.

This was cleverly tested in a study that looked at performance bonuses for US teachers. Those who received the bonus upfront and had to give it back if their class failed to achieve were much more likely to succeed than those who were only given their bonus at the end of the year. The anticipated anguish of having to repay a bonus was hugely motivating.


Where businesses are going wrong

When we focus on what our customer (supplier, staff member, stakeholder) has to gain rather than what they have to lose we are setting ourselves up to fail. These are the two problems we need to address;

1. Too much bad tension

Bad tension is the negative anxiety your customer feels about changing. This is where Loss Aversion works against you because they feel they have more to lose than gain by taking the course of action you are suggesting.

I strike the issue of bad tension all the time when I am reviewing websites. An absence of supportive cues like testimonials, industry affiliations, secure payment icons and guarantees means the prospective customer is left to speculate about whether you are a trustworthy business. As soon as you make them guess about how credible you are you have introduced negative tension and dramatically reduced your chances of success.

2. Insufficient good tension

Good tension is the anxiety your customer feels about leaving things as they are. This is without doubt the fundamental catalyst for behavioural change. With good tension you are using Loss Aversion to your advantage by making the risk of sticking with status quo seem worse than the risk of change - in essence, not changing is unpalatable.

FOMO (Fear of Missing Out), or Scarcity, is one of the techniques commonly used to stimulate good tension.

Unfortunately too many businesses skip over the process to build good tension and think that the benefits of the change are themselves sufficiently persuasive. They rely on 'grass is greener' when they should also be talking about why the current grass doesn't make good eating.

With good tension you are looking to create contrast between what the customer has now vs what you are proposing. Your task is to point to the gap between the customer's current and desired state.

With positive tension your objective is to;

  • get the customer to agree that what they have now is unsatisfactory,
  • build positive tension about what they really should have and then
  • propose your solution.

Do it right and even if the customer decides not to proceed with you they will walk away feeling unsettled about their decision and receptive to future proposals.

So how are you feeling about your status quo right now? Do you feel you are the most effective you can be at influencing behaviour, or do you find you are getting frustrated that people are not willing to change as easily or quickly as you would like? I'd love to help so get in touch if you would like to know more.

P.S. Never thought of yourself as a behavioural change agent before? Check out this short slide pack I put together on why we're all in the business of behaviour change. So far it's been viewed by over 14,000 people!

This article also appeared in Smartcompany.