The 5 Psychological Factors Behind Customer Decisions

The pace of change in technology is intensifying and the escalation isn't limited to products.

September 26, 2019

7 Min Read
Five, 5


Ben Taylor

By Ben Taylor, Content Marketing Manager, Richardson

Channel-Partners-Insights-logo-300x109.pngThe pace of change in technology is intensifying and the escalation isn’t limited to products. New businesses, services and leaders emerge every day. This changing picture is adding to the complexities facing technology professionals seeking to engage buyers.

Breaking through these layers means returning to the fundamental principles governing the buyer’s decision process. Sales professionals need to understand the psychology behind customer decisions.

Here, we examine the five core psychological factors underpinning the customer’s decision process.

We reveal the hidden biases at work during buying decisions and how IT professionals can address them when positioning the sale. We examine how things like incidental emotional states influence decisions. We look at why something called prospect theory can be used to increase momentum through the buying journey. With these and other findings backed by social psychology research, IT professionals can more effectively cut through the noise, connect with the customer and win the sale.

1. Putting the solution at eye level drives buying behavior. Solutions, especially those in IT, are becoming increasingly complex. Therefore, products and services demand more focus from customers during the buying decision process. This burden can lead some customers to take a shortcut when analyzing a purchase. Researchers at Columbia learned that this shortcut occurs when we draw on the immediate context of a situation to make a decision.

The researchers call this response to context “choice construction.” They explain that “choice construction will be more prevalent under greater uncertainty,” and uncertainty abounds in buying decisions.

To illustrate the power of choice construction, the researchers give an example of a product at eye level on a store shelf. Customers often purchase this item more than other similar products. Therefore, it seems that they are loyal to this brand. However, when that product is moved to another location in the store, customers merely purchase whatever replacement item is in the location of the original product. They prefer what is at eye level, not a specific brand. IT professionals can put this finding to use by remembering to simplify the value proposition of their solution by putting it at “eye level.” They can do so by:

  • Articulating the relevance of the solution to the customer’s specific needs

  • Using ordinary language when describing features and benefits

  • Comparing the solution to other aspects of their business to make the product familiar

2. Short-term emotions drive long-term buying decisions. Researchers at the University of Southern California and Duke University wanted to understand how emotions influence decision making. However, their inquiry had a twist. They wanted to know how an emotion today might impact a decision days later. Participants in the experiment were asked to cross a suspension bridge they believed was dangerous. The researchers were exploring something called the “incidental emotional state.” This concept suggests that “emotions on decision making can live longer than the emotional experience itself.”

The study posits that …

… emotions drive future decisions due to “behavioral consistency” and “false consensus.” Behavioral consistency tells us that initial decisions set a precedent that we’re often inclined to follow. For example, getting someone’s agreement on one issue will increase the likelihood of getting their agreement on another issue. False consensus also drives consistency because people often believe “that others would probably behave like them when facing a similar scenario.” These findings should remind IT professionals that emotions carry enormous weight in the decision-making process. Working through this dynamic means:

  • Helping customers overcome misconceptions.

  • Building alignment among stakeholders.

  • Building rapport to gain access to buyer-side conversations.

3. ‘Sudden-death aversion’ slows the sale. Across different customers and solutions, one selling challenge dominates: the status quo. For a customer, the easiest option is to remain as is without making a change. Researchers at Cornell University and the University of Chicago wanted to know why the status quo keeps so many would-be customers anchored. They discovered a phenomenon they call “sudden-death aversion.” The name is fitting because it derives from their review of data from professional sports teams.

The researchers examined instances in which a team could either kick an extra point to put the game into overtime or choose “sudden death” and try to get the ball into the end zone from two yards away. Their data showed that people overwhelmingly prefer the “slow option that avoids the short-term risk at the cost of lesser odds of success.” That is, people will often decide to evade a short-term risk even when doing so sets them up for long-term failure. This is why we so often avoid purchasing a solution; we become distracted with the near-term risks without fully considering the downstream benefits. IT professionals can help customers overcome this common problem by:

  • Underscoring the risks presented by the status quo.

  • Appealing to the customer’s logic and emotion.

  • Asking the customer to make a small decision first.

4. Defaults influence customer decisions. Can something as simple as a cup of coffee influence someone’s international travel plans? A group of psychologists at Princeton and Columbia learned that the answer is yes. They performed a meta-analysis and discovered that “on average, defaults exert a considerable influence on decisions.” Moreover, the power of defaults is so strong that it often goes unnoticed as it guides our decisions.

A default is a preselected option. To better understand how defaults influence decisions, Dan Ariely, a Duke University psychology and behavioral economics professor, explains giving someone the choice of a free trip to Rome or a free trip to Paris. If you want to urge more people to choose Rome, you only need to add a third option: a free trip to Rome in which coffee is not included. You must pay for it out of your own pocket.

This third option makes Rome with coffee look better than Rome without coffee. More importantly, the research shows that it even makes Rome with coffee look better than Paris. This study shows that defaults guide decisions because they provide a specific context. IT professionals can create an influential context by …

… remembering that:

  • The perceived value of the solution is rooted in the customer’s trust of the sales professional.

  • Ease of implementation often encourages a buying decision.

  • Organize the available options with defaults that support the sales professional’s goal.

5. Perceptions of gains and losses drive buying decisions. Purchasing IT solutions is a complex endeavor. Therefore, the buying journey is long, iterative and full of unexpected turns. This volatility can incite fear on behalf of the buyer. Moreover, this fear exerts more influence over decisions than potential gains of equal size. That is, “losses loom larger than gains,” according to work published in one of the most cited behavioral research papers of all time.

The research continues, “the aggravation that one experiences in losing a sum of money appears to be greater than the pleasure associated with gaining the same amount.” This finding comes from Nobel Prize winner Daniel Kahneman, who gave this concept the name “prospect theory.”

Prospect theory also explains why bronze medalists are happier than silver medalists in the Olympics. Researchers studying the 1992 Summer Olympics noticed that “bronze medalists who were not expecting a medal were happier than silver medalists with gold medal dreams.” For the silver medalists, the sense of loss was greater than the sense of gain experienced by the bronze medalists. These findings illustrate the importance of perceptions. IT professionals can shape perceptions early and often by:

  • Developing agility that allows for smooth transitioning between selling skills.

  • Becoming a trusted adviser who is comfortable asserting a point of view.

  • Using a narrative structure to simplify the messaging.

The Takeaway

Customer needs, solution capabilities and technical capabilities are all becoming more complex. Navigating this complexity means understanding the psychological factors that drive all human decisions. These five findings can equip IT professionals to more effectively move through the increasing number of layers standing between them and the buyer.

Ben Taylor is the content marketing manager at Richardson, a global sales training and performance improvement company focused on helping customers drive revenue and grow long-term relationships. Its sales and coaching methodology combined with an active learning approach ensures that sales teams master new behaviors they can apply in front of buyers. Follow Richardson on LinkedIn or @RichardsonSales on Twitter.

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