I want you to participate in a decision making game that comes from Kahneman & Tversky (1984). Simply read this scenario and write down the answers before going through the evaluation.
Imagine that we are preparing for the outbreak of a dangerous disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the scientific estimates of the consequences of the programs are as follows:
- If Program A is adopted, 200 people will be saved.
- If Program B is adopted, there is a 1/3 probability that all 600 people will be saved and a 2/3 probability that no people will be saved.
What do you advise? Program A or Program B? Once you record your answer, read on.
There are two other options now.
- If Program C is adopted, 400 people will die.
- If Program D is adopted, there is a 1/3 probability that nobody will die and a 2/3 probability that all 600 people will die.
Write down your choice of program C or D then read on…
Kahneman and Tverskey found that 72% of their subjects chose the “sure thing” program A over the “risky gamble,” Program B. However they obtained almost the OPPOSITE results when the question was framed the opposite way. 78% of the same people (doctors) then chose option D which is identical to option B. (C is identical to A)
In other words if someone chose A they logically must also choose C. If someone chose B they logically must also choose D because they are the same exact responses. However, the framing or perspective that is given seems to shift people’s thinking significantly. PERSUASION KEY : The majority of people will do far more to avoid losing something they already have than they will to get something they don’t have. KEY: Fear of loss is a much greater motivator to most than the possibility of gain.
Need more evidence? (Say “yes”, as that is the logical response!)
Fear of Loss…
The same Princeton researchers that did the above research project looked at another situation. They told one group of students to imagine they have arrived at the theater only to discover they have lost their ticket. Would you pay another $10 to buy another ticket? A second group were asked to imagine they are going to the theater but they haven’t bought a ticket yet. When they arrive at the theater, they realize they have lost a $10 bill. Would they still buy a ticket? 88% of those who lost the $10 in cash said they would buy the ticket BUT only 46% of those who LOST the ticket (which they paid $10 for) would still buy a ticket!
There is nothing logical or rational about the way people buy or make their decision to buy from you. Logic would tell you that people want the best product. They don’t. Logic would tell you that people want the most choices possible and that they make decisions logically…Nothing could be further from the truth.
I have a confession to make. I’m not completely logical either. [SHOCK!] I haven’t worn a seat belt (except in Seattle, Warsaw and Boston) for 20 years. My step dad was nearly killed in a car accident. He was struck by a farm vehicle and didn’t have his selt belt on. Had he been wearing it, he would have been crushed to death in the car. Because he didn’t have it on, he was thrown through the window…140 feet…and barely lived…but lived. That emotional imprint has kept the seat belt off…and yet, my kids wear a seat belt or we don’t put the car in drive. How’s that for logic?
Now, let’s talk about how all of this should change the way you sell, buy and influence others to your way of thinking.
Freedom of Choice…or Barrier to Selling?
Even more interesting is research that was just released from Stanford. Researchers went to a grocery store and set up tasting booths in the store. On one table they had 24 jams that the people could taste. On another there were six different kinds of jams. As you would expect 60% of all people who stopped at the table with 24 jams tasted a jam. Only 40% of those stopping at the table with six jams tasted there.
What’s shocking? Listen carefully: 30% of all people who stopped at the table with SIX jams purchased one of the jams. Only 3% of people who stopped at the table with 24 jams purchased any of them! The ramifications are enormous…another of our famous $10,000 KEYS that I like to offer you every few months.
The larger number of options (in jam, religion, spousal choices, jobs) creates what we call cognitive dissonance. Cognitive dissonance is what happens when you hold two or more beliefs or ideas and don’t know which to choose. It makes us feel overwhelmed. People like to have choices…it gives them freedom. But, if you give people too many choices they will simply freeze and do nothing.
This is clear in a casino…where I have been known to spend a few hours. Bettors will drive themselves crazy trying to figure out which team, horse or color to bet on. When they place their money, they become certain they are on the correct side… Later when their team loses, they can say, “I KNEW it was going to go that way, I SHOULD have listened to myself.”
Similarly, women do this when they buy a dress. They see blue, they see black…they stand there helpless. Finally they buy the black and THEN they FEEL better inside…in fact…RELIEVED!
When faced with too many choices (usually two or more) most people can become paralyzed and do nothing at all. People who feel overwhelmed simply drop everything…do nothing and give birth to procrastination.
If you tell someone “you can have any of these 100 choices of paint” there is a good chance they will freak out! People are NOT used to deciding between so many options. They won’t be able to decide what to do. If you say, “I can give you one of these four options,” then the person finds it much easier to choose.
The truly devastating impact of the internal desire to be directed instead of being given a few options happens in brainwashing and sudden conversion experiences. Here, there is only one correct “way” or “ideology” and all others are wrong. This solves the problem of cognitive dissonance and creates what Hoffer called, The True Believer. How do YOU utilize your new found knowledge about cognitive dissonance?
The first $10,000 key of the year:
Every 4 year old child will tell you that the most important toy in a room full of toys is the one that the other child is playing with!
- People crave direction. Give them direction that wires into their unconscious drives.
- People want to believe they are in control…and feel better when they perceive they are.
- Help people resolve their cognitive dissonance by narrowing options and alternatives quickly and decisively.
- Realize that your profits will increase with fewer choices for your clients and customers. There are NOT 64 color choices for the new Lexus or Honda. There are 7.
- Remember the Pareto Principle. 80% of almost everything that happens comes from 20% of the participants or options. (80% of the money is made by 20% of the salespeople and so on.) Use the Pareto Principle to design the very FEW options you need for your clients.
- Too many choices means that people will freeze and not know what to do. Always be prepared to direct people to the best choice for them.
- Always think long term. Your clients look to you for guidance and will remember the results.
Covert Hypnosis: The Introduction to The Secrets of Unconscious Communication… LIVE! DVD!
Join Kevin Hogan in front of a standing-room-only audience of over 400 people. Kevin reveals tips on how to sell, work with clients, communicate effectively and utilize the space around you to take command of every situation you find yourself in.
This fast paced one hour video presentation filmed with studio equipment is a must to enhance your unconscious communication skills. This is a dynamic and exciting presentation. Never more fun. If you miss this video you have missed a real treat. This video introduces you to covert techniques using body language and body positioning to gain compliance fast.
- We found that people make decisions based on how a proposition is framed. (positive vs. negative for example…)
- We discovered that people typically are more likely to purchase something when there are FEWER choices to choose from instead of having many options.
- We also found out that people who have purchased a ticket to the theater and lose it are not likely to replace it, but someone who loses money (the cost of the ticket) will still buy a ticket. Owning “money” and owning “a future event” are different things…
None of these things should matter in whether we buy or don’t buy but they do…Just taking these three simple facts should be enough to help you increase your sales by 15-25% IF you apply them to your product, your mode of RECEIVING payment, your specific situation…Now… How can we top paradigm shaking facts like these?
Glad you asked!
You’ve probably thought that as a therapist or a salesperson (the two largest demographics of Coffee with Kevin Hogan) that if you can just get people to change their attitudes you can get them to change their behaviors…(in fact you could say that persuasion is about influencing attitude and compliance is changing behavior)
But perhaps you haven’t thought of the opposite. Change the behavior FIRST and you can change the attitude forever. Here are some examples of successful behavioral changes to influence long term attitude change. Once people “own their actions” or once people own “something” their behavior and attitudes both begin to change. In fact, once people own something or possess something they believe that what they own is worth more than it really is, whether it is an idea or something tangible.
Ziv Cameron, a French marketing professor and MIT’s Ariely divided a group of nearly 100 Duke U. students into 2 groups. One group was asked to state the highest price they would pay for a ticket to the NCAA Final Four basketball tournament. The other group was told to imagine they had such a ticket and was asked for the lowest price at which they would be willing to sell it. The median SELLING price was $1,500. The Median BUYING price was $150! The sellers perceived their ticket as worth 10 times what the buyers thought it to be worth!
(Could it be that what a person will LOSE once they no longer have their product/idea is a cause of the inflated price? Keep reading Coffee and you will see that you are right! Fear of loss plays a big role in decision making… a much larger role than it should!)
This effect has been proven effective for generations. In the profession of selling, everyone knows that the “puppy dog” close is the technique of getting your product into your customers office or home for a short period of time. Why? Because like taking a cute puppy dog home, once we own it, we value it higher than we did when it was in the store and once we do that, the “price” of the goods goes up in the human mind and that price is more than what was on it at the store and the individual then buys it.
What ideas currently utilize this psychological quirk in human nature as an influential strategy to make sales?
- Book of the Month Club
- Columbia House CD Club
- magazine subscriptions
- office supply sales (especially photocopy machines!)
- art galleries
So many different companies utilize the endowment effect in selling it’s a wonder that everyone doesn’t. Key learning strategy for today: How can you use the endowment effect without actually having your product/idea in their possession?
From your life:
Have you ever had someone from a church or organization invite you to their meeting or service? That didn’t change your attitude (or say, your religion). You simply went as a favor. But then after some period of time you decided that you liked this church or group and decided to join. Later as time went on you decided that your new found group was indeed the “right” group to belong to.
Many groups do NOT ask you to change what you believe, they simply ask you to take part in their service/group/organization and “test drive” it. See how you “feel,” for example, see if it “works for you.”
The brain is a funny thing. Once you start to perform a set of actions you become accustomed to the actions and you feel a void if those actions would no longer be there. Therefore your attitudes begin to change.
Now, none of this is good or bad, it’s simply an example of how you can utilize actions which you “own” to change attitudes. In fact, there is little that is more effective in changing attitudes than regularly performing a set of actions or rituals. Rituals are remarkably important in attitude change.
Secrets of Sales Success
with Kevin Hogan
FOUR DVD program
I’ve never believed you should just get out there and knock on doors or make phone calls. My belief is that you should let everyone buy from you. But almost no one sells like that. Sales is art and science and for people who want to sell more than the “average” you need better than average new information to compete. It’s that simple.
Asked to put together an inexpensive program that incorporates what you want most to sell more, I’ve taken these DVD’s and put them together into one program that is heavily discounted for your acquisition.
Here’s what you get:
DVD ONE: Selling Yourself to Others: 21 Key Ideas in Selling (That No One Ever Taught You!)
People buy YOU not just your products and services. This brand DVD contains new selling strategies never released before based upon scientific advances in behavioral genetics and tested in real life selling situations! This one hour presentation will help you increase your sales in a scientific fashion. Best? It’s amazingly easy to learn and apply this material!
DVD TWO: The 10 Laws of Persuasion
Taped “live” in a beautiful television studio at a Fortune 500 company, Kevin Hogan gives you the foundation for persuasive communication. Whether you are a leader in business, own your own business, or are a salesperson, you cannot successfully gain compliance without knowledge of the laws of persuasion.
In order to fully comprehend the process of persuasion, you must understand some basic concepts, or principles, of persuasion. These concepts provide the foundation for the paradigm of persuasion.
Included are the nine principles that come into play in daily life as well as in persuasion settings, whether you’re a salesperson, public speaker, consumer, husband, wife, father or friend. These are the Laws of Persuasion.
DVD THREE: The Attraction Principle: How to Manifest Your Every Desire in Life
Learn the difference between success and failure in bringing about what you desire in your life. What is the EXACT formula that will enable you to manifest the dreams and desires you have been nurturing? Learn it all here. Kevin Hogan presents his Attraction Principle.
DVD FOUR: 21st Century Selling: Selling the Way People BUY!
Learn all the key triggers that cause people to buy in the new millennium. Based upon cutting edge research into sales psychology and years of experience, you will learn how to be the obvious answer to many of your clients’ problems.
You will discover how to program the neurology of your brain so you literally FIND success in selling yourself. You’ll also learn how to create the outcomes of sales interviews BEFORE they happen. Most importantly, you will uncover the secrets of developing personal mastery…the focal point of how most of your customers will judge you and deem you worthy or not of buying from.
Everything in this presentation has been TESTED in real life by real salespeople whose lives depend on their making the sale. Every concept, strategy, tactic and game-plan in this program has been PROVEN successful at raising your closing ratio and igniting your personal self motivation levels to new highs.
Altogether you get over four hours of truly astonishing information. Easily worth thousands of dollars, this is the equivalent of Kevin’s $25,000 one day sales training.