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Episode 68: Inside the Science of Sales – David Hoffeld

Predictable Prospecting
Episode 68: Inside the Science of Sales - David Hoffeld
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As we march down the sales pipeline, the more information we have the easier it is to connect the dots in the sales process. Having more information and better data makes us more strategic, scalable, and consistent.

You are going to love today’s podcast because my guest is David Hoffeld, and he is all about the science of selling. He is the author of The Science of Selling: Proven Strategies to Make Your Pitch, Influence Decisions, and Close the Deal, and he is the CEO and Chief Sales Trainer of  the Hoffeld Group which offers science-backed sales training, coaching, and consulting. We are delighted to have him on our show today, because we love science, data, and research.

Episode Highlights:

  • David tried to translate years of research on behavioral science and data into his book
  • He became obsessed with science and the sales process and his numbers increased dramatically
  • Incremental commitments guide customers through the sales process
  • Architecting choices of buyers that will be made contextually
  • Heuristics or mental shortcuts our brains make when we make choices
  • Six commitments the brain makes for a sale to happen
  • Aligning how you sell with how the brain makes buying decisions
  • Higher perceived risk with one option as opposed to several options

Resources:

 

Episode Transcript

Marylou: Hey everyone, it’s Marylou Tyler. Today, I have David Hoffeld. You’re going to love this podcast because he is all about the science of selling. In fact, he has a book on amazon.com called The Science of Selling: Proven Strategies to Make Your Pitch, Influence Decisions, and Close the Deal.

                    David actually goes soup to nuts. He’s the CEO and Chief Sales Trainer of the Hoffeld group. We are delighted to have him on our show today because we love science, we love research, and we love data. As we march down that pipeline to close, the more information we have to connect those dots, the better we’re going to be, the more strategic, and more we can scale, as well as more consistency in the selling process. Welcome, David, to the show.

David: Thank you, Marylou. It’s great to be with you today.

Marylou: Tell us about the book. What I like to do with our audience, I’m sure they are very receptive to understanding the why behind it. Writing a book is not easy as you know. What motivated you to do that? What are the two or three things that you think were just transforming the people that come through your organization from a trainer’s perspective, when you started introducing these concepts to your students?

David: Yeah. The book was about 10 years in the works, about 10 years of research. I have a very odd hobby. A little over 10 years ago, I began to read, veraciously read, academic journals. A number of different scientific disciplines like social psychology, communication theory, cognitive psychology, social neuroscience, just to name a few.

I would try to translate this science of how we’re influenced, how does a brain create choices, how do we create preferences, why do we choose one product or service over another. I saw this data that had so much rich information. I said, “Boy, I think this is so relevant for what I do as a sales professional every day.” So, I became obsessed with it.

                    Over the years, I started just translating it. I saw such a noticeable impact on my performance as a salesperson and then also, for the sales team that I was leading at the time as well. In fact, we went to the Inc 5000 list, one of the fastest growing companies in United States, that means just sales went up by over 400%. It was just astounding. I saw the difference that these insights allowed us to really serve our potential customers more effectively by really understanding how the brain makes choices, and aligning how we present with that.

                    The book is really the outpouring of that. I just think there’s so much information that oftentimes in the world of sales we don’t have access to for good reason. It’s been hidden away in these academic journals. Academics really for the most part, with a few exceptions, haven’t cared about sales at all. I thought, “Boy, more people need to know about this.” I thought, “Well, I’m impassion for it, I might as well try to write a book on it.” We’re lucky enough to get Penguin Random House to be interested in the book. They saw the vision, helped us publish the book just in November of 2016, just a few months ago.

Marylou: That’s very young.

David: Very young, yeah. Just hit six months yesterday. It’s been very well received. It’s so exciting because there are so many powerful proven insights from behavioural science that once salespeople learn them, it can make such indifference.

                    The second part of your question was what impact has it had. One or two things, I guess two things really quickly I’ll share. Number one is one of the big breakthroughs in the book, there’s a couple but one of the biggest ones is how much commitments matter in selling. That idea is nothing new. We’ve always known commitments matter in selling. How do we get those commitments and what are they?

Oftentimes, we talk about commitments and then we go back to business as usual and think about that one at the end of the sale, when the buyer say yes or no. What the research shows is our brains construct the buying decisions with series of incremental commitments that guide our potential customers on a progression of consented naturally advance in sale.

In about a six and a half year research study, applying this science and also doing some testing on my own, we were able to identify what are these commitments and how do I get them? We got choice architecture in behavioural economics. How do I architect this choice? Because choices are made contextually. What happens before the choice heavily influences how our buyers perceive a commitment or a choice. How do we do that?

The second thing that came out of the research that’s really impactful was something called heuristics. This is a very common term in behavioural economics. Heuristics are mental shortcuts our brains make when we form choices. There are so many examples of these and how they can make such a powerful impact because it allows us to present our products, services, and companies in ways that our brains create preferences. This can make just a huge impact. Little things can make a huge impact toward our sales production and results.

Marylou: This is incredibly interesting because my brain immediately went to the top of funnel, which is where I live, I love. I know you take everything all the way to close, you hit every step. At top of funnel, when we are trying to start conversation with people we don’t know or follow up on a conversation with people who might have engaged but not really committing, I drill into my people that everything we do, any type of sales message whether it’s email, whether it’s a post card, whether it’s a voicemail, whether it’s a conversation, there has to be something called a call to action. It’s something we want them to do in order to be able to get them to commit.

My question to you on top of funnel is can you describe the types of commitments that we need to have our prospects make at various stages in the pipeline? Or is it driven more by the questions that you ask and the answers that you get that’ll direct you as to what commitments you should get and where you should place those commitments?

David: That’s an excellent question. This is one of the things that surprised me, a number of things surprised me as I conducted all these, analysing all these data and research over the last decade. One of them was commitments. I thought I understood commitments. I had been a top sales performer. I thought a great closer in my previous life, that’s how I labelled myself.

                    What I found was I was wrong in a couple of areas. One of them was how our brains make commitments. What the research conclusively shows is that for us to form a buying decision, there are certain commitments that must be made. What’s really fascinating is it doesn’t really change that much on the type of sale. This really surprised me because I thought depending on the type of sale, the core commitments would be different. Certainly, the execution is different. No doubt about it. The way we obtain them, absolutely.

For a complex sale, we have some clients that their sales cycles are one in two years. For them, it’s different than someone selling a product with a much faster sales cycle, with less complexity in the sales process. However, because this is based how our brains form choices, it’s based on the brain, not the type of sale.

We always start with that buyer centric approach. How does the brain form a choice? There are six commitments we found that make all the difference in the world. In fact, if one of these commitments is not made, the sale never happens. If all of them are made and some other conditions are met, the sale is very likely to occur, provided you’re talking to someone that has the authority and the means to make that choice or multiple buyers.

We call these the six whys. These are six commitments that each begin with the world why. We say this is how you should structure a sales process. There are so many implications from this because we can now go and look at any sales process and we can instantly see bottlenecks. We can see one of these commitments is not being addressed. `

If that happens, now the buyer has to make that commitment on their own. Sometimes they will, sometimes they may not. But if we can guide them through their mental buying process, we’re so much more effective because as you rightly pointed out just a few moments ago, we’re making it easy for them to engage with us. They know what the next step is. We’re guiding them through that process. What we found is when salespeople align how they sell without the brain creates a buying decision, they’re instantly more effective.

Marylou: Wow. The other question I have is, because I am a process expert, can we systematize the six whys? For example, at top of funnel, we’re typically given a lot of records because we’re targeting ideal accounts that we’re going to hopefully start a conversation with. We may have thousands of records that we’re dealing with. We need to cut through the clutter to get to the people who we think are going to actually engage with us. We have to entice them, persuade them, whatever it is we need to do to have them bubble up to the top.

Can the six why approach be embedded in our sales message and into a sequence so that those people who get it will respond? Or is this something that you think is more of after you’ve started the conversation, this is when the six whys actually start?

David: That’s an excellent question. I guess there are a number of answers. The answer real simply is a yes to both scenarios. What’s really interesting is as we develop the six whys over the six and a half year period of doing this research, we were focusing primarily in the sale. What happened since the books came out is really interesting. This is pretty young information but we’ve had marketers read the book and say, “Wow, these six whys are extremely applicable to what we do.” So they began to use it.

                    What we found, this is very early data but it’s really exciting. We’ve been talking about sales and marketing alignment for decades. Certainly, the lines are blurring in sales and marketing. Sales is doing marketing, marketing is doing sales. What we found is the six whys give a point of collaboration, because now there’s a common messaging.

In most organizations, sales and marketing, there’s almost like a wall between them. Best case scenario, marketing throw something over the wall, some information once in awhile and sales will throw something back. Most of the time that’s what it looks like.

                    With the six whys, we found a few organizations that have embraced this from a sales and marketing perspective. Now they have this common language so they go, “This marketing message, we’re going to target this why.” They’re speaking the same language, which really doesn’t happen in most organizations. It’s one speaking French, one speaking German. The communication is clumsy at best.

With this common language, it’s been very interesting, I don’t have a lot of data on this but it’s something that had sparked my interest, because I’ve just recently, in the last few months found out some organizations are utilizing this approach. The early results have been extremely promising. The first time in the organization’s history, as what they’ve conveyed, sales and marketing are collaborating because they have this common language. It’s really driving some interesting outcomes thus far. It’s very exciting.

                    I know how the sales whys impact within the sale. As you engage, you identified a potential customer, you’ve qualified them, and now you’re putting them through that funnel. I had that down but what I hadn’t really thought about was how I can really impact prior, how that impact marketing and how that impact sales. It’s very young yet but it seems very, very promising. It could be a pretty significant breakthrough if things continue as it looks like they are.

Marylou: Because we’re at top of funnel and the listeners on this podcast are brave souls who are ready to test, because we all know testing is really important. We have a statistical relevance in the number of records that we can test this type of scenario with. This is something that I love because it’s systematic. I’m hearing a method here, I’m hearing a system.

I teach the five levels of awareness which is borrowed from Eugene Schwartz. Back in the 60’s, they used to do that. It is trying to uncover where a buyer is in this purchase intent just to be able to understand, of those 100 we send emails to, which three or four are going to be the ones that are ready to engage.

We’re all about putting records through a statically relevant sample and testing this. For those of you listening, we can easily implement a track that has the six whys embedded in it since we do an 8 to 10 touch sequence in most of our presales conversation top of funnel outreach. This immediately impacted me in terms of saying we should probably try this top of funnel, presales conversation.

David: Yeah. There’s also something that I know has interested a lot of marketers and salespeople as well that I mentioned briefly a few minutes ago, which is those heuristics, which are those mental shortcut.

                    Let me give you an example. It’s fresh in my mind because I just had an investment banking firm I was talking to yesterday. They had said they had used one of the principles in the book which was a heuristic. They closed the $4 million deal that was stalled because of it. Let me share with you that heuristic. This is a quick example.

Marylou: Yes, please share.

David: It’s an interesting one. It’s easy to understand. It’s a good representative of what heuristics are. It’s called single option aversion. We talked about many in the book. This is just one of the more simpler ones. What it says is that our brains assign a higher level of risk when presented with simply one option than when presented with multiple options, because our brains are comparison machines. How do we know if a price is good or bad for our product or service? We have to compare it to something else, what we paid last time, what we were told it would cost, what a friend of ours paid. We’re always comparing. It’s how we create certainty in our minds.

For example, one researcher named Daniel Mochon published some research on the single option aversion. He did a number of different experiments. One of the most entertaining one was he went and took DVD players. He showed them to shoppers and he said, “Would you buy this DVD player?” Showing only one option, when he did that, 10% of them said yes. They examined, they looked at the price, said, “Yeah, we’ll buy it.”

Mochon wanted to know what happens if we add a second DVD player, do sales go up or down? Single option aversion tells you, “That will create more certainty, reduce the perception of risk, it should go up.” That’s exactly what happened. When two DVD players were added, sales went up to 66% of the shoppers chose one. 34% chose the original DVD players, so sales went up by 200% on that one and then 32% chose the second one, equal to 66% increase.

That is representative of how our brains make choices. When we have two options, we’ll compare them instinctively. We’ll select the winner. That selection reduces our perception of risk and makes it significantly more likely that we’ll say yes.

This investment banking firm, one of the managers read the book who I was talking to. One of his guys came in. He was trying to sell a $4 million insurance policy to a business. It will be $400,000 per year for 10 years so it was $4 million total. It was stalled. They had showed the policy they recommended. The business owner said, “Well, I don’t know about this. I think I’m just going to wait.”

They retreat. He goes and then talks to his manager. His manager says, “Well, you know, I was just reading this book. I think we are dealing with, this is single option aversion. Why don’t you go and then show a second option? Just give him another choice.” Okay, what’s the harm in that?

He went back, showed them a lesser option. Say, “I want to give you something else to compare it to. Here’s another option to consider.” People, “Oh, okay. Yeah, show me. What do you got?” He showed them a lesser option, a lesser insurance policy. He said, “Doesn’t have all the coverage but it’s less for premium. What are your thoughts?” The business owner compared both of them and said, “Well, no. This one isn’t as good as the first. Let’s just go with that one.” Boom! $4 million sale. It was that easy. Why? Because very simply, they had done a lot of things right but this buyer needed the nudge. He needed to be helped in the decision process.

That is representative of what happens all the time in sales and these simple little heuristics that science has proven. When we start aligning how we sell with how our brains make choices, it makes us instantly more effective. In that one instance, it generated a $4 million sale when the sale was pretty much dying. That’s one example.

Marylou: Yeah. I learned a long time ago from Robert Cialdini who wrote a book, these principles of persuasion. I had the honor of attending a class when he used to teach back in the dark ages. I went to Phoenix and took his class on the six principles. He gave a very similar example. Although he added a third choice, this is probably for smaller sized deals. Inadvertently, people will pick the middle one.

That’s another thing too, is that when faced with three choices, the high, the low, the middle, people will generally gravitate towards the middle. That’s why you guys see on the pricing pages of web pages that people like this option the most. You’re doing social proof and you’re also doing the middle of the road option that’s “safer.” I love that idea though I never thought about even in my sales to clients of giving them another option because I typically have one offering. That’s it. I’m going to try that now.

David: Yeah, it’s fascinating. I know even when I talk to clients and now when my clients go out and talk, even if you just mentioned the second option, it doesn’t even matter if it’s a good option, just giving the people the ability to compare, because our brains are going to search for a comparison. The harder it is, the more challenging it is. Sometimes we struggle with that and then our perception of risk goes up.

                    Yeah, just learning some of these simple heuristics are incredibly powerful, because they’ve been proven over decades. I’ve shared with you one experiment from Daniel Mochon. We can literally talk all day about the experiments that have been done in choice. As you well mentioned, having three options, people would choose the middle one, more often than not, because they’ll compare the high one, the low one, and the middle one seems the safest option.

                    Leveraging social proof is another heuristic. Social proof for our listeners is the idea that we connect the persuasiveness of an idea with how others are responding to it. My favorite example of social proof is standing ovations. All of us have been at a performance, the performance concludes and were pleased, we sit down, we’re clapping, and all of a sudden everyone around us starts standing up. Even though we did not want to and we had no plans to, we find ourselves rising to our feet, also joining in on the applause. What in the world is happening there?

                    As someone that studies social science, I love that because I love to walk and look around and see people that are like, “Ah, I guess we’re doing this.” They stand up and applaud. What force makes us stand up? It’s that social proof. It feels wrong to sit down. Not only that, if you stay seated, oftentimes people will look at you and say, “What a jerk? What’s wrong with that guy?” Why is that? It’s a social norm. We expect in a room full of people standing, clapping, that all of us will stand up. If you don’t, you may pay a price at least in this theme of others.

                    It’s fascinating too to learn some of these principles and then say, “Okay, how do we apply this in the real world of selling?” Sometimes, boy, little shifts can make such dramatic impact.

Marylou: Especially as I said before, the fact that we do systematize at top of funnel, some of the presales conversations, by using mass personalization, it’s a perfect laboratory to test these things without spending a lot of money on it. It’s really focusing on aligning like you said, that the content assets, the sales message.

Before you do your pitch, the pre sales conversation of just starting the conversation, getting people to raise their finger, raise an eyelash, or whatever it is so that we can start that conversation is so important. I think if there is a process and it sounds like within the book, there’s a methodology to go about doing that, we should all be reading your book.

David: Now, I’m standing and applauding. Yes, very well said. One of the things I think your listeners will enjoy about the book is that it’s very practical. It’s not a textbook, it’s not going back to school, or become an amateur psychologist, or anything like that. It really practically shares these insights, but it shows you the how. How do you apply this in the real world? Here are examples, here’s the data. One thing that’s fascinating that a lot people have commented on is that it also tells you why. It tells why is that.

In the book for example, we have over 400 different citations to academic journals. Over 1,000 different academic journals are referenced in the book. If you want to go in and say, “Well, I want to learn more about single option aversion or social proof. I want to read and research for myself that cited in the book.” You can do that. You follow the citations and you can be off. A lot of it you can find online for free, sometimes there’s a small fee to read the journals depending on which one of these. You can do that.

It’s all evidence based. It’s backed by that so you can understand. We found that, especially for very established salespeople that are really higher performers, they love it, because they say, “You know what? I want to know why. If I’m going to make a change, why should I do that because I’ve already been successful.” They’re like what I was 10 years ago. I’m skeptical. “I’m already been successful. I’ve got the success thing down in sales but how do I get to that next level? How do I go from great to exceptional or dominate? How do I do that?” This science gives you some insights.

What I found too, once you learn some of it, you start creating your own strategies, you learn how to adapt more effectively. Looking back when I was applying this early on especially, what I found was I had to adapt to meet the needs of that specific customer. I was able to do so because I had the science as my guide. I wasn’t trying to guess my way to success.

Now, I was saying, “Okay, I knew where I was going and I knew how to get there. I knew the science would help me accomplish those goals and really serve my customers.” It really gives us the insight of why, which really illuminates then how. That allows you to be more creative and more effectively so.

Marylou: It just maximizes the return on effort. That’s really what we’re all about, is we want to be spending more time having quality and meaningful conversations with our clients and with our prospects. If we can blend science in that has evidence and that, “This is how we think, this is how we buy.” Internet, irrespective or not, if we can apply some of these techniques, that is going to help us just build a pipeline that’s consistent. That if we want to scale it, we can. This sounds like quite a labor of love, your book. Yeah?

David: Yes, yeah. It definitely took much longer than I anticipated. I wasn’t planning on 10 years. I was thinking two to three is what I thought. I got to the two year mark, and then I said, “Well, two to three, two to three more.” And then it kept coming, two to three.

                    Boy, I got deeper and deeper into it. I saw more insights and then I’m like, “I can’t stop now. There’s so much data out there.” Yeah, it was ridiculous amount of time and money accumulating all these information but boy, it’s so rich.

What I love is we have clients all around the world but I love hearing from people that are reading the book and saying, “I use this and it helped on this way.” As you know Marylou, you write a book and put all this work into it and then you give it out to the market place, you don’t see people buying it, you don’t see them reading it, it happens when you don’t see it visually, and so you don’t know how people respond to it. It’s great to see it being well received. All that work, it’s wonderful to hear some of those success stories early on that the book has really helped people.

                    I think that’s the exciting thing. As you’re talking about really being data driven and evidence based, and incorporating some of these science backed principles, it gives us more tools. It allows us to get greater insight into our buyers. That’s what I found for me and for others, a science backed approach really does is it forces you to focus on the buyer. That infiltrates every area of selling.

I know something you’re big on as well is really focusing on the buyer. The science does that because it’s not how do I want to sell or what would I want if I were in the buyer’s position, it’s what’s going on inside that buyer’s mind. How do I meet his or her needs? How do I help that organization achieve its goals?

That relentless focus on the buyer I think is mission critical to success in sales, because selling as you know is harder than ever before, because of so many other factors that are going on in our world. If we don’t have that relentless focus of providing value to our buyers at every interaction, it’s challenging to be successful. I think this is where we’re at.

No longer can we get a buyer which is being product or service experts. We now have to become experts on our buyers. We have to really have this focused understanding on them. That really sets us up for success in every part of the sales process.

Marylou: I agree, I agree. The book again for everyone is Science of Selling: Proven Strategies to Make Your Pitch, Influence Decisions, and Close the Deal. And I’ll add, start conversations.

David, how can we reach you? What’s the best way for us to get a hold of you if we want to continue this conversation?

David: Yeah. You can reach out to us via our website, hoffeldgroup.com. A lot of great resources on the website as well if you’re going to look at articles, blogs, white papers, videos, tool to learn more about science based selling. And then of course we’re on LinkedIn, Twitter, that’s @DavidHoffeld as well, and we have a YouTube channel you can check out too.

Marylou: Oh wonderful. Well, thank you so much. I think everyone really got their money’s worth on this podcast because we really are focusing more on the buyer now and we should have been all along but really are now.

I think that if we can apply, those of you guys who are top of funnel, apply some of these strategies that David specifies in his book, tactically to top of funnel, working through our sequences, cadences, voicemails, and pre sales conversations, we’re going to be a lot more effective and reduce that lag in the pipeline that we experience because we can’t get people to come to the table to actually start conversations with us.

                    David, thank you so much. I really appreciate you taking the time to share this 10 years of research with us or longer but 10 years of you putting together.

David: Yeah. Thank you so much, Marylou. It’s been a pleasure.

 

  

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