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Today, I will be taking you to the next level of persuasion and influence. I want to give you 2 nuggets to apply in your business.
There are many different areas where mental shortcuts can be helpful for you. In this episode, I will go through 2 more principles from Robert Cialdini’s book, Influence.
I will be covering #3, Contrast, and #4, Scarcity today. I’ll back them up with real-life sales examples to show you the power of the principles and help you apply them directly in your life and business.
The Contrast Principle:
A big mistake that startup founders, salespeople, and even VPs of Sales make is that they do not always have a tangible ROI.
If you have a solution to save money, you need to be very specific about exactly how much it will increase your revenue.
When a buyer wants to use contrast to help them decide if the value on a return is worth giving up a certain amount of money, they need to know exactly what the value of that return will be for a different amount of money.
For example, if one company has a 36-month sales cycle for a $1,000,000 deal, and another company has a 9-month sales cycle for a deal of the same size, the second company’s sales cycle is only 25% of that of the first company.
Money comes in terms of speed as well as in terms of revenue. So if you look at it that way, after 4 years, the company with the 36-month sales cycle will have $1,000,000 in revenue, whereas the company with the 9-month sales cycle will have $4,000,000 in revenue. That is a difference of 400%!
When you talk about the value that your solution creates, the solution for your ROI needs to be identified clearly as a tangible outcome. You need tangible numbers to show how you are reducing costs (from invoices, for example). If you do that, it will be possible for your potential prospects to process their potential revenue faster, so they would get to their number quicker.
In terms of the contrast principle, everything needs to be made as clear and simple and as black and white as possible for your prospects.
If you do not know the exact outcome, you can give a range of examples to help your prospect understand.
When you can get deep and make your value more tangible, your sales cycle will speed up, your margins will go up, and you will see your competition melt away.
The Scarcity Principle:
In human psychology, people want something more if its availability has decreased recently. That’s because they think that the trend will continue and that thing will no longer be available.
So, people want something more if:
- Its availability has decreased recently
- There is competition for the same service
When the movie, The Poseidon Adventure, came out, the rights for it got sold in an auction format. It was the first time that had happened, and many TV companies were bidding for it. The bidding went up until Barry Diller from Fox News got it for $3,000,000. All the networks were aggressively going after the rights, so there was competition, and there was also recently decreased availability because it was the first time it happened. That was one of the highest amounts ever paid for a movie.
The scarcity principle also works well in marketing when there is a count-down clock for a special offer.
Links and resources:
Apply here for a Revenue Growth Consulting Session with me, Ryan Staley.
Robert Cialdini’s book, Influence
Saas, Saas growth, Scale, Business Growth, B2b Saas, Saas Sales, Enterprise Saas, Business growth strategy, founder, ceo: https://www.whalesellingsystem.com/closingsecrets
