Selling psychology: Why humans spend money

If you’ve been reading my articles for very long, you’ve probably figured out that I’m a big nerd when it comes to some things. Once of those things happens to be the psychology surrounding why certain things in sales and marketing work the way they do. Today, I want to give you a very brief overview of some of that psychology. This is good information to know, since your livelihood depends on it. But it’s also good to know so that you can critically analyze your own emotional reactions when YOU are being sold to.

In general, human beings have two dominant buying motives: To avoid pain or to gain pleasure. You’ll see much more exhaustive lists of buying motives in various books or on the web, especially as relating to personality. For example, you’ll see lists that include things such as:

  • to fulfill physical needs
  • to achieve comfort
  • to avoid criticism
  • to be individualistic
  • to make money
  • to have a challenge
  • to be safe
  • to have security
  • to attract the opposite sex
  • to gratify curiosity
  • to be popular or in style
  • to obtain recognition

These are ALL dominant buying motives for different personality types. However, note that they all reduce to one thing, which is to either avoid pain or obtain pleasure. Granted, this is a gross oversimplification of how our brain works, but it has proven to hold true across most of our decision making processes.

Therefore, the benefits that your customer gains from your solution to their need must fullfill one of these two things. For tax software, the solution helps the customer to avoid the pain of doing their tax return by hand. For tax resolution, a client could be driven by both motives. There is the obvious desire to avoid the pain associated with IRS interaction, but also the pleasure to be gained from improving their business processes and increasing their take home income. Some people may also have a spouse involved in the tax situation, which implies obvious pain and pleasure motives. Never ignore the amazing lengths that people will go to in order to keep a spouse happy!

By understanding a little bit about what makes people spend … Continue reading

Offering real solutions that benefit your tax prospects

Yesterday, we discussed the use of a Q&A session to gather information from your prospect that will allow you to offer concrete solutions. Today, we are going to discuss how to create that solution, and how to communicate the benefits of your solution to your prospect.

As we discussed in yesterday’s article, a tax debt always has an underlying cause. Through your Q&A session, you were able to identify that cause. It’s not uncommon for it to be something that is difficult for the prospect to talk about, especially when there is a family member involved. As a tax professional, once you understand the real problem, you are already several steps ahead of your prospect in regards to solutions. In most cases, your solution is going to consist of three components:

1. Fix the underlying problem.
2. Get into current compliance with tax laws.
3. Fix the tax debt.

Fixing the underlying problem is actually the most difficult. If it’s a family owned business and one employee/family member is embezzling money, that employee needs to be fired immediately and legal action taken in order to create a reasonable cause basis with the IRS. If the family is unwilling to take these measures, then there is actually very little lasting recourse for resolving the tax liability. If the problem is a complete lack of a bookkeeping system, then this can be easily remedied.

This starts to create what I call the problem -solution-benefit sales chain. Here is how that works:

1. With a thorough understanding of the prospect’s problem, you can now repeat the problem back to the prospect in a summarized form: “Based on what you’ve explained, the real issue seems to be….”

2. Repeating back the problem creates a segue into your solution: “Based on the issue at hand, my suggestion would be to….”

3. After briefly stating the big picture solution, you can then talk about the benefits of implementing the solution: “By doing this, you will then be able to…”

Why do you want to discuss the benefits to the client? Because, people don’t buy prospects or services. People buy what the product or service gets them. The old saying goes like this: Everybody’s favorite radio station is WII-FM, What’s In It For Me?

Keep in mind that your solution not only needs to meet the prospect’s need, but you need to sell based on the benefits your solution provides, … Continue reading

Uncovering the needs of your prospects with Q&A

Yesterday we were discussing how to delve into what a prospect really needs, and how you can package your services to give them a solution that they will actually buy, even if you really only offer one service. Today, let’s discuss more on the subject of creating options, as this gives you valuable information about a client’s objective.

Let me give you a non-tax example from my newspaper advertising sales days. I was selling ad space for a small, conservative, monthly newspaper that was direct mailed to just about every residence in Fort Collins, a city of about 120,000 people at the time. Being a local, monthly publication, instead of a daily newspaper, one of our biggest benefits to advertisers was that people kept our newspaper sitting around for a week or longer — people that read it didn’t just throw it away. But still, I had one product to sell: Newspaper advertising space in a local monthly publication. However, I had options to sell. For one, what about ad size? Does my prospect NEED a full page ad? Will a 1/8th page ad meet their needs? Even if they can afford a full page ad, if they can get the same response from a smaller ad, isn’t it my obligation as an ethical sales consultant to make sure they purchase what they NEED, rather than what gets me the biggest commission? What about color? If their logo and most other advertising is based around the color red, do they NEED full color, or can we effectively place them on a single color page, which was cheaper for us to have printed anyway?

Let’s take consumer tax preparation software as another example, since in one way or another we’re all in competition with tax software. Most commercial tax prep packages have a slew of options, and they have different versions available for different needs, which can actually create confusion for the consumer. However, there are lesser-known tax software solutions that only have one version – no options, no upgrades. How on Earth do you do needs based selling for that situation?

In reality, it’s easy. The solution is a simple Q&A. Remember, you’re having a conversation with a real human being, and this person came to you because they viewed you as an expert (remember, in our marketing we are always positioning ourselves to be on the right side of the desk). You must ask … Continue reading