Is your sales pitch based on gains or on pains?

Sales people have a natural tendency to try to pursue potential clients with the prospect of positive outcomes of a decision. That’s why most sales people emphasize the gains of their solution in their value propositions and pitches. But this focus on potential gain comes with the risk of ignoring one of the most important elements of buying behavior theory:

The Loss Aversion Effect.

According to this theory, people are more willing to take risks to avoid a loss than to take risks to experience the pleasure of gain. The Nobel Prize winning behavioral economist Daniel Kahnemann and his colleagues have proven, that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. To put it into different terms, people are willing to pay double the amount of money and take double the risk to not lose something, then winning that same something.

B2B customers are well aware that any change involves risk, and that the management of change is a difficult and complicated mission. Faced with potentially risky decisions, they tend to rather stick with the status quo - even if they are aware that choosing to change could bring the possibility of positive impact. This behavior is described as the Status Quo Bias.

People are afraid of a bad outcome that results from new actions more than negative consequences that result from inaction.

To sum it up: If people don’t understand a compelling and urgent reason to change, they will always choose to avoid any decision to purchase and implement an innovative solution. They will fall into a kind of decision paralysis.

This behavior is especially reinforced, since there’s not just one person involved in a decision. According to CEB (now Gartner) a complex B2B buying process involves an average of 6.8 actively engaged decision makers. It’s no surprise that sales cycles are slipping and that losing deals because of “no decision” is more common than losing to the competition.

This means:

Before promoting the gains to be made from implementing your solution, you need to amplify the “cost of inaction” - the negative consequences that are likely to follow if the prospect decides to stick with the status quo.

Remember: Without selling the upside of change, you are unlikely to win. But at the same time don’t forget that without highlighting the downside of sticking with the status quo, you are likely to lose.

Sources:

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk.

Samuelson, W., & Zeckhauser, R. J. (1988). Status quo bias in decision making. Journal of Risk and Uncertainty,