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 money, and seeing how that fits into the problem -> solution -> benefit sales chain, you will become a much more effective tax consultant. Once you understand what your customer needs, why they need it or want it, and what benefits they will gain from it, you are then in a position to satisfy that need.

In order to satisfy that need, you still have to close the sale, of course, and that will be the topic of tomorrow’s article.