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No One Ever Got Fired for Buying IBM

“No one ever got fired for buying IBM.” This phrase is often called the most powerful marketing phrase ever created.  In the 1980s, if you had to decide what computer hardware to buy for your company, these words rang through your head.  It made your buying decision pretty easy.  And, if you were a competitor to IBM, that same sentence made your job nearly impossible.  Your product could be superior in every way – features, price, warranty, etc – and you still couldn’t beat IBM.  What is it about the idea that ‘no one ever got fired for buying IBM’ that made it so powerful?  Is there a lesson there that can be applied to anyone doing sales messaging?  The science of neuromarketing provides answers to these questions.

What motivates people to buy?

Let’s look at the example of Kevin, a highly trained engineer in a company comprised of engineers.  He has the reserved personality that you expect from someone who chooses engineering as a career.  If you ask Kevin, or his peers, how they make buying decisions, they’ll tell you that they are rational and logical in their approach.  In fact, they can sometimes seem so focused and unemotional that you might wonder if any of the decision is based on emotion.  At the moment, Kevin is involved in a project that requires him to bring together subcomponents from a number of different vendors to make his product.  He was meeting with a vendor recently who wanted to be the supplier for one of the subcomponents.  Kevin listened patiently to the salesperson, but for most of the presentation, Kevin was focused on the fact that he already had a vendor who could provide this subcomponent.  For Kevin to change to this new vendor would be a painful transition.  He’d have to write new specifications, get the new vendor through his contracts department, etc. Then, at the end of the presentation everything changed for Kevin.  The sales person got to his last slide and said, “Look, I don’t want to make you feel like I’m pushing you, but you should know that I’m already providing these components to several of your competitors.”  On his last slide, he had a list of all of the companies Kevin needed to compete with.  Suddenly, Kevin was focused on the fact that his competitors were using this supplier; if he didn’t, then his competitors would start with a lower product cost than him.  Since he charged a premium for his product because of the built-in service, he would end up going to market with a price point so high that he would never win any business.  Needless to say, Kevin ended up buying those subcomponents from this new vendor after all.

Now, notice what happened to Kevin.  He started off the presentation focused on the pain he would experience if he switched from using his current vendor to using this new one.  In fact, he went into the presentation with no intention of switching vendors. Through the beginning and middle of the presentation, Kevin’s mind never changed, even though the vendor was telling Kevin all of the great things he’d get by using this vendor’s solution. Then, on the very last slide, the vendor showed Kevin that, if he didn’t change his strategy, he would put himself in a bad market position because of what Kevin’s competition was already doing.  Suddenly, Kevin wasn’t focused on the pain he would experience by making a change in vendors; instead, he was focused on the bigger pain he would experience by going to market with an overpriced solution.  It was emotion that caused Kevin to change his mind about what this vendor was offering, not pure, rational thought.  And it was a particular emotion – PAIN – that caused Kevin to change his mind.  Through most of the meeting, the vendor tried to sell Kevin on the benefits of his solution, but that wasn’t working.  It was ONLY when the vendor made Kevin aware of the pain he would experience by staying with his original plans that Kevin realized he had to move forward with this new vendor.  Now this vendor has Kevin’s business.  So, is Kevin typical in the way he makes decisions?

A recent study illustrates just how important it is to frame a customer’s current situation as a negative, just like Kevin’s vendor did in that last slide.  People are much more motivated to move away from a painful situation than they are motivated to move towards a positive situation.  As reported in Science Magazine, in an article titled ‘Frames, Biases and Rational Decision-Making in the Human Brain’, emotion is an important part of all decision-making and people are more likely to move away from something framed as a negative.

The study presented people with a choice, but the choice was framed in two different ways.  The choice was to keep the $100* they were given or risk that $100 by gambling it.  If they gambled, the participants would automatically lose some of the money.  If they did not gamble, they would lose the exact same amount of money. The fascinating thing is that whether or not the participants chose to gamble depended on how the question was framed.  When the participants were told that they would keep 40% of the money if they did not gamble, only 43% chose to gamble with their money.  When the participants were told that they would lose 60% of their money if they didn’t choose to gamble, 62% of the participants decided to gamble with their money.  What is fascinating about this study is that the math produces exactly the same result for the participant, regardless of which way the question is framed.  Yet, framing the decision as LOSING 60% of their money motivated more people to gamble than framing the decision as KEEPING 40% of their money.

The participants’ brains were scanned as they were making these decisions.  The scans revealed that the amygdala (the part of brain thought to control emotion and ‘fight or flight’ reaction) was active throughout all participants, regardless of whether they behaved rationally or irrationally. This finding suggested that everyone experiences an emotional reaction when faced with such choices.

What is even more intriguing is that the study asked the same people both questions!  In other words, the same people switched their answers simply because of the phrasing.  When the participants were asked about why they switched, they said that they recognized it was really the same question, only phrased differently, but they couldn’t stop themselves from changing their answer.

Now, you can see why the phrase ‘No one ever got fired buy IBM’ is so powerful. [By the way, this phrase wasn't said by IBM employees; it was said by their customers.] What does this mean to your sales messaging?  If you want to get customers to make a decision to buy your product, you can’t just make a rational argument, and you can’t just talk about the benefits of your solution.  Instead, you have to help your customer see the pain associated with doing nothing.  The more vivid you can make that pain, the more motivated they will be to ‘gamble’ on your product so that they can move away from that pain.  One of the best ways to make this emotional connection is through a ‘Customer Story with Contrast.’  Share a customer story with your prospect and emphasize all of the pains that customer faced (financial, business and personal pains).  Don’t just give the customer data points; instead, talk about the financial, business and personal pains that customer was experiencing before moving to your solution.  The story you are sharing should be closely related to the experience your prospect is living today.  Then, tell your prospect how your solution solved your customer’s financial, business and personal pains.  It is that focus on the pain that is so effective and powerful.  When you do that, your customer will be motivated to fix their problems with your solution.

* The study was done using UK pounds, which is about $100 U.S.

by Erik Peterson, Corporate Visions’ Consultant

 

 

Comments: 1

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  • Bernhard Keim

    By searching the internet I found this interesting article. I would like to frame the problem differently:

    As as people are not forced to make a decision, they feel comfortable. The moment they have to, they feel uncomfortable. There is ambiguity in most decisions, meaning I can decide to the one way or the other. Ambiguity is a state of discomfort and we all try to choose the easier way, the one that promises less pain and more reward. This path is normally regarded less risky. If you want to convince people to make a different choice, you have to show them the risk, they are not aware yet.
    I bought my first Apple 1985 and stayed with Apple ever since. When I made my original decision, most people warned me, telling me that this company wont do it. What did I weigh differently?

     
     
     
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