How to Use Psychological Biases to Sell Better and Faster by HubSpot

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This post originally appeared on the Sales section of Inbound Hub. To read more content like this, subscribe to Sales.

For all the powerful processing work the human mind can do, it’s still prone to making bizarre assumptions or jumping to an illogical conclusion every now and then. Problem is, we don’t even recognize these patterns as strange. They’re built into the fabric of our thought — so to us, they just seem normal.

But upon examination, they’re revealed to be anything but normal. Why else would we buy Beanie Babies in bulk? Or consider a rhyming tagline to be “truer” than a non-rhyming tagline? Thanks, psychological biases.

Like it or not, these biases are part of us. So those in the business of persuasion can benefit from learning how to spot and play to them. Below are 10 psychological biases that relate to decision-making. Not only can these help you understand why you make the choices you do, each also has a sales takeaway attached to help reps use these brain quirks to sell better.

1) The ‘Ambiguity’ Effect

Imagine I gave you two lunch choices. I could either take you out to a place you know and like (although it isn’t your favorite), or I could take you somewhere completely random that neither of us have ever been to nor read any reviews about. It could be great, but it could also be awful. 

Which would you choose? If your brain works like most people’s, you’d probably opt for the first option rather than risk a very unpleasant midday meal. 

Ambiguity effect causes people to avoid options with uknown results or those about which they lack information. Now you can tell your significant other there’s a scientific reason why it’s so hard to venture away from your tried-and-true bar or restaurant. 

Sales takeaway: Make sure buyers are informed about what results they can expect if they implement your product, and quickly answer questions or fill in knowledge gaps they might have. If you’re so inclined, you could also cast a shadow of doubt over competitive products — making prospects feel as if your choice is the only sure bet.

2) The ‘Anchoring’ Effect

Like your kindergarten teacher always told you, you shouldn’t judge a book by its cover. Too bad that our brains are hard-wired to do just that. 

Whether for good or for bad, the first piece of information we receive about a person or situation will color our overall perception. Why? The initial detail acts as an anchor — to which all further information is compared. 

Sales takeaway: First impressions matter. Carefully plan out how you will introduce yourself and your product. Make sure the first snippet of information the buyer recieves about your offering sets a positive tone and high expectation for the rest of the buying process. 

3) Hyperbolic Discounting

Offer a toddler a candy bar now, or one (or two or three) later on, and you’ll see hyperbolic discounting in action. Now is always better than later. You probably won’t even finish your sentence before they latch on to the treat and gobble it down.

Turns out, this doesn’t really change much as we grow up. Our brains are naturally biased toward rewards in the short-term than those in the long-term. The “discounting” part of hyperbolic discounting refers to the fact that the perceived value of a reward decreases the farther it is in the future, until the slope eventually flattens out.  

Sales takeaway: Emphasize the quick wins a customer can expect to see shortly after buying your product or service — especially if the main benefit won’t come for months. Build in immediate rewards as much as possible.

4) The ‘Bandwagon’ Effect

Beanie Babies. Pet rocks. Troll dolls. Looking back, these toy fads seem kind of silly. But did you buy or have one? Well, yeah, but … everybody else was doing it!

No need to feel ashamed. There’s a reason why you hopped on the trend. People naturally gravitate towards products or services they see other people using. And the larger the crowd, the more powerful the psychological pull.  

Sales takeaway: Social proof is more powerful than you might think. Play up the number of customers your company has, and introduce prospects to current clients. 

5) The ‘Decoy’ Effect

Are you having trouble deciding between two choices? Maybe adding a third will help. 

… Huh? My sentiments exactly. But although the decoy effect is totally irrational, it’s been scientifically proven.

In a study conducted by Duke University, a researcher gave participants two dining choices: a five-star restaurant that was far away, and a three-star that was nearby. The diners were torn. But after introducing a third possibility — a four-star restaurant even farther away than the five-star — suddenly it was easy to choose the five-star option. It was the best quality and only moderately far away (when compared with the third choice). 

Sales takeaway: Use options to your advantage by presenting multiple versions of an offering or contract. If the prospect is really struggling to decide, introduce a decoy that will reinforce their innate predisposition.

6) The ‘Rhyme-As-Reason’ Effect

“If it doesn’t fit, you must acquit.” With this simple couplet, Johnnie Cochran cemented his defense of O.J. Simpson to the jury during the former football player’s infamous 1994 murder trial.  

While rhymes are naturally easier to remember, Cochran could also have been exploiting the rhyme-as-reason bias. This psychological quirk causes people to perceive rhyming statements as more truthful than non-rhyming ones containing the exact same message. It pays to be a poet — and now you know it.

Sales takeaway: Reformulate your value proposition or a key takeaway about your product into a catchy rhyme. It can also help to apply this tactic to an aspect of your offering that is dubious or unclear.

7) The ‘IKEA’ Effect

There’s no avoiding the inevitable confusion when trying to decode assembly instructions from the Swedish furniture outlet, but that’s not what this bias is about. Instead, the IKEA effect refers to the fact that people value things they had a hand in creating more than similar — or even superior — products created by others.

While this can have a downside for creators (as their ownership of the project could make them blind to flaws), this brain trick can be exploited for salespeople’s benefit rather easily.

Sales takeaway: Get prospects involved in customizing or putting their unique spin on your product or service. The more they feel like the offering is “theirs,” the more positively they will feel towards it. 

8) The ‘Illusory Truth’ Effect

How do hypnotists put people to sleep? At least in movies, they repeat over and over, “You are getting sleepy …” At first, the patient’s eyes are wide open, but eventually their eyelids begin to flutter, and ultimately close. What happened?

One possible explanation is the illusory truth effect, which establishes that the more times a person hears a statement, the truer it seems to become. If this sounds impossibly basic (or maybe even insulting to your intelligence), you’re not alone. “It seems too simplistic that just repeating a persuasive message should increase its effect, but that’s exactly what psychological research finds (again and again),” writes Dr. Jeremy Dean. “Repetition is one of the easiest and most widespread methods of persuasion.” 

Sales takeaway: Determine your core message, and then deliver it over, and over, and over again. 

9) The Peak-End Rule

It’s not just first impressions that matter — speakers often strive to end on a high note. Why? Because people’s brains are wired to remember two moments of a presentation above all others: the apex and the end.

For instance, if you were to attend a mostly boring movie with a fantastic ending and a single stellar scene, this bias holds that you would remember it more favorably than another movie that was good throughout, but never extraordinary. 

Sales takeaway: Make sure that sales presentations hit a deliberate high, and end on a thought-provoking and memorable point. If you’re pressed for time, skew your preparation efforts to the ending and a critical moment rather than spending an equal amount of time on the entire presentation. 

10) Loss Aversion

With the exception of serial gamblers, most people’s brains are risk-averse. Losing something that is already owned has been shown to be far more painful than gaining something advantageous is pleasing. And this knowledge can be valuable when framing product benefits and other sales messaging. 

Sales takeaway: Emotions are powerful motivators. Depending on what you sell, play up what prospects stand to lose by sticking with the entrenched status quo (another cognitive bias!). They’ll be more willing to take a risk if they feel that something they own is at stake.  

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Vine Introduces Vine Kids

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vinekids Vine is today introducing a new layer of the app called Vine Kids. It’s meant to be a safe, kid-friendly space for a younger audience to play around with the app and watch vines. The feature pulls from the millions of Vines being created on the platform and chooses ones that are appropriate for children. The interface of the Kids section of the app has also been tailored to be more fun… Read More

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Rothenberg Ventures’ First Virtual Reality Accelerator Emphasizes Health And Education

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Rothenberg River VR could enlighten and heal, not just entertain. Its immersiveness could distract us from pain, help us face our phobias, or give us first-hand training. “We have a belief that VR will disrupt every industry. And it’s global. So we made efforts to find companies in every different industry and that are global” Rothenberg Ventures’ founder Mike Rothenberg about the… Read More

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How Product Packaging Influences Buying Decisions [Infographic] by HubSpot

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This post originally appeared on Agency Post. To read more content like this, subscribe to Agency Post.

A shopper paces the aisle, looking at one laundry detergent after another. All offer essentially the same thing: clean clothes, fresh smell, easy pour …

So how does a shopper make a decision to buy one over another? Is it the color of the bottle, the price, a familiar logo? Does she spring for the brand her mother is loyal to, or does she care more about a brand with a phosphate-free formula and environmentally friendly packaging?

There’s too many options and not enough time for shoppers to take all the factors into consideration. To make this easier, our brains rely on recognition of brands, colors, icons, associated emotions, and images, all of which ultimately reduce the cognitive load required to make a decision. Using these cues enables us to act quickly. 

By understanding the science behind why we buy and how we buy, brands can create packaging that connects with the undecided consumer. The Paper Worker created the below infographic to outline how typography, color, and icons affect the buying process — and why special attention to product packaging needs to be a priority for any brand. 

product-packaging-buy

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10 Excel Tricks Every Marketer Should Know by HubSpot

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Excel is a useful tool for a number of marketing tasks.  The two most important uses that I have for Excel on a weekly basis is first, as a research tool while writing (e.g. to get original statistics for a blog), and perhaps more obvious and more common, for data analysis and reporting.  

With that in mind, here are ten tricks to help you get more proficient at Excel.

1) How to Summarize Data with a Pivot Table

What is a pivot table? A “Pivot Table” is a spreadsheet functionality that allows you to arrange and categorize tabular data.  

Why are pivot tables important? Data is useful only if you can summarize and extrapolate meaningful trends from it.  Pivot Tables help you do exactly that.  

How do I create a pivot table? Watch the video. Minute 1:05.

2) How to Create a Histogram Using the “=FREQUENCY” Function

What is a histogram? A histogram is a graphical representation (chart) of distribution data.  A frequency distribution displays the number of data points that fall within specified ranges in a sample.

Why are histograms important? Histograms are a convenient way to organize data into similar groups (e.g all grades from 90-100 are an “A” while those from 80-89 are a “B”).  The range between “90” and “100” is known as a “bin.”  Although school grades are less relevant for day-to-day marketing, histograms are commonly used in finance. Since finance affects every single business, understanding how to read, create, and manipulate data in the form of a histogram is critical for business owners and marketers.

How do I create a histogram using the “=FREQUENCY” function? Watch the video. Minute 2:41

3) Understanding Regression Analysis and the Meaning of R2

What is regression analysis? Regression analysis is a statistical process that compares the relationship between different variables in a sample. Excel does all of the hard work for you. The important thing is to understand the meaning behind the numbers that Excel outputs.  

Why is regression analysis important? Two words: correlation and causation.  It is important to know how much of an impact A is having on B (causation) or if A and B are trending along similar paths without having a direct impact on one another (correlation).  R2 is the number you need to understand.

Understanding R2?  R2 is known as the coefficient of determination.  It describes how well the data fits your chosen model.  When you plot your data on a chart, add a trendline (common trendline models are linear and exponential), and then display the R2 value, you will see a number between 0 and 1.  Think of this like a percentage.  R2 = 0.99 is a 99% fit to the model you picked (pretty darn close).  R2 = 0.10 is a 10% fit (not very close).

How do I add R2 to my chart? Watch the video. Minute 6:02.

4) How to Use the VLOOKUP Function

What is VLOOKUP?  VLOOKUP is a built-in Excel function that allows you to search your table for a certain value and then outputs its associated value automatically.  

Why is VLOOKUP important? Searching a large database manually would take forever, and depending on the size of the table, could be impossible to do without serious errors.  If you want to search a database efficiently and accurately then you need to understand VLOOKUP.

Did you know? VLOOKUP stands for vertical look-up – as in looking vertically down a column of data cells. Conversely, HLOOKUP stands for horizontal look-up – as in across a horizontal row.  

How do I use VLOOKUP? Watch the video. Minute 8:10.

5) How to Program a Macro

What is a Macro? A macro is a program that records and automatically executes a series of commands (actions) with a single execution instruction (e.g. the click of a button).

Why are Macros important? They make long manual processes simple by automating them.

How do I create a Macro? Watch the video. Minute 10:16.

6) Conditional Formatting

Conditional formatting is useful to identify trends or points of interest in a data set.  Watch the video for a few examples of conditional formatting. Minute 11:46.

7-10) Four Keyboard Shortcuts That Are Good to Know

“CMD + 1” : Shortcut into the “Format Cells” Window

“CMD + K” : Insert a hyperlink

“F11” : Creates a chart in a new sheet from the selected data

“CMD + SHIFT + T” : Sums the column of data and puts the total in the next cell (automatically executes the =SUM() function).

Extra Credit:  How to Import Data From a Database

You can either download an ODBC driver for the type of database you want to access, or subscribe to a cloud-based service that incorporates the necessary connectivity into their product offering. You will need to determine which database you want to access and download the correct driver for your particular operating system. I will discuss this more in a future blog post.

What is an ODBC Driver? ODBC driver stands for Open Database Connectivity driver. Long answer short: it is required software to access database information. You need different ODBC drivers to access different databases (e.g. Google, Hubspot, Salesforce.com).  

I hope you enjoyed this short primer on Excel. As mentioned above, these tricks can come in handy for marketers in all industries. If there are any functions that you’d like me to cover in the future, contact me @JustinPavoni. Want to learn more marketing skills that will help you climb the career ladder? Download our starter guide to becoming a CMO.

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Amazon Leads the Way With Negotiation Option for Rare Items by HubSpot

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It’s hard to call Amazon a trendsetter in this field, since eBay has done something similar for over a decade. Still, because of Amazon’s influence over ecommerce trends, we may be able to consider it groundbreaking. What’s this “new” thing they’re doing?

Haggling.

Sure, eBay is and auction site, where buyers try to outbid each other for anything from socks to one-of-a-kind art pieces. Amazon’s “make an offer” option is, for now, available only for rare pieces like collectibles and fine art. The basic idea behind the two is the same, though. By allowing buyers to make their offers, whether in an auction setting or a haggling scenario, these two ecommerce giants give buyers even more power.

How It Works

As you’ll see in the screenshot below, Amazon provides the option for buyers to either purchase the item at a set price or to make an offer. The offer is delivered directly to the seller, who can either accept that offer or make a counteroffer. The deal is done when the seller either accepts or both parties walk away.

amazon haggling negotiation ecommerce option

Just like haggling in real life, right?

Why This Is Big News

If eBay has done something along the same lines for years, why is Amazon’s new negotiation option such a big deal? In truth, Amazon is a leader in the ecommerce world. The company has made buying online easier and less expensive than ever. When they break new ground, the rest of the ecommerce world follows.

Sure, other websites out there probably haggled with buyers if those buyers were savvy enough to seek out the contact information. As far as a structured, easy way for potential customers to make lower offers, Amazon is leading the pack. They may have already patented either the idea itself or the technology used, but that won’t matter.

As we’ve seen, using patented technology for ecommerce isn’t new. Amazon may have the 1-Click buying option, the whole “photos on a white background” technique, and even online gift cards locked down, but that hasn’t stopped others from developing their own versions.

The more technology-savvy ecommerce companies out there could very well develop their own version of Amazon’s haggling option. And before they go through that trouble, they have the ultimate example to learn from. If it works for Amazon, we’re sure to see it crop up everywhere.

Where It Works

If you’re thinking that haggling just won’t work for a lot of ecommerce outlets, you’re right. The structure isn’t ideal for everyone, but it is the perfect solution for many. Antique dealers who haven’t considered an online outlet for their goods may find this particular buying option perfect. Fine art sellers could experience a higher number of sales if online shoppers felt they could make an offer. Vintage apparel stores could see a huge surge in sales if buyers had the option of haggling over that Chanel purse.

Someone looking for a pack of socks, though? This model isn’t going to work. For that, you could still go to eBay.

What do you think about haggling? Is this the future of ecommerce, or will Amazon only be able to use the model for a small selection of items? We’d love your thoughts, so leave a comment!

How to Build a Profitable Ecommerce Business

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Daily Mail Acquires Millennial-Focused Website Elite Daily

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elite daily team DMG Media, publisher of UK newspaper The Daily Mail, announced this morning that it has acquired Elite Daily. Describing itself as “The Voice Of Generation Y,” Elite Daily mixes general news and culture coverage with stories like, um, “You Can Literally Make Over $13,000 A Year Just By Pooping.” (Which, to be fair, is good to know.) In a blog post about the acquisition,… Read More

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Minibar Offers On-Demand Booze Delivery In 13 Cities

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Screenshot 2015-01-29 13.31.18 The snow is piled high and frozen on the New York city streets. Joshua and Amanda sit on their couch for the fifth night in a row, bored out of their minds but unwilling to bundle up, venture into the winter night and try to find warmth elsewhere. “Christie and Caleb want to go out,” Amanda says unenthusiastically, without looking at Joshua. “You care?” “Tell them… Read More

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Uber Sued In California For Fraud, Negligence Following New Delhi Rape

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uber-like black car Nearly two months ago, a young woman was allegedly raped by her Uber driver in New Delhi, India. The incident led to the banning of the service in India and a full-scale investigation there, but the victim has brought her case over to the U.S. now filing a complaint with the Northern District Court of California. The charges raised in the complaint include negligence and fraud, and the victim… Read More

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The Life of a Marketer: 15 Charts & Graphs on What We Really Do All Day by HubSpot

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Hey there, marketer. I’m curious … what’s really going in that day-to-day work life of yours?

When you say you’re working from home, are you actually being productive? When you have a deadline, do you wait until the last minute? What are you actually doing on LinkedIn? It’s time to speak the truth. 

Below are 15 graphs and charts showing how we really spend our days. If you can relate to one, click the “Pin It” button to share it with your friends and colleagues. And don’t worry, we won’t tell your boss. 😉

1) You’re not fooling anyone.

Work From Home

2) Let’s be honest, Fridays aren’t real work days. 

Work Productivity by Day

3) Have a food coma? Subtract two more hours. 

Work Productivity by Hour

4) The answer is always yes. 

Should You Get Coffee?

5) The secret is to under promise and over deliver. 

When You Have a Lot to Do

6) Did you pull another all-nighter again?

How You Manage Your Time When You're On Deadline

7) Everything works out in the end.

5 Stages of Losing Your Work

8) Should you really schedule a meeting for this?

Spending Time on Meetings

9) You’d get a lot more done if you stopped instant messaging your work BFF during meetings.

What You're Actually Doing in Meetings

10) How amped are you right now?!

How Motivated You Feel After a Productive Meeting

11) It’s okay to say no.

Doing Someone a Favor

12) It’s alright, I won’t tell your boss.

Blogs Your Boss Wants You to Read vs. Blogs You Actually Read

13) Wait. Hold on a second … is that clickbait?

How You Write a Blog Post

14) Stalking is just one of LinkedIn’s many benefits.

What You Do On LinkedIn

15) It’s five o’clock somewhere.

Acceptable Time to Start Drinking at Work

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