In Tina Turner’s classic song, “What’s Love Got to Do with It,” she calls love a second-hand emotion. In B2B sales, your executive buyers want you to believe that emotions are second hand, meaning they are a non-factor in their rational, logical decision-making process.
Sure, executives might admit that emotions have some sway on decisions, but they’d probably tell you that hard mathematical analysis would override that aspect of decision-making. But what if I told you that executives actually don’t make decisions based on rational analysis alone, and that they’re just as liable as anyone else to let emotions dictate their decision-making?
In fact, a recent Corporate Visions study found that in a business decision-making scenario, you can provide executives with the same math with respect to a business proposition but get significantly different results depending on how you frame the situation.
For the study, Corporate Visions contracted with Dr. Zakary Tormala, an expert in messaging and persuasion. Conrad Smith, VP of Consulting at Corporate Visions, reached out to Corporate Visions’ network of executives and asked them to take part in an online experiment. Participants—113 of them—came from a wide array of industries and occupied a range of high-level roles at their companies.
Scenario 1: Business decision-making context
At the outset, participants were told that the researchers were trying to learn more about executing decision making, and that participants would be presented with several different hypothetical scenarios. Unbeknownst to participants, they were randomly assigned to one of two conditions — a “gain frame” condition or a “loss frame” condition — which they were placed in before the first scenario and remained in for the duration of the experiment.
In one of the hypothetical scenarios, all participants received the following instructions:
A large car manufacturer has recently been hit with a number of economic difficulties and it appears as if three plants need to be closed and 6,000 employees laid off. The vice president of production has been exploring alternative ways to avoid this crisis. She has developed two plans.
Following this overview, participants received information about the two alternatives. The two options were mathematically identical across the gain and loss frame conditions. The key difference? The status quo was framed as a gain in one condition and as a loss in the other.
In the gain frame condition, the options were described in terms of how many plants and jobs would be saved:
• Plan A: This plan will save one of the three plants and 2,000 jobs
• Plan B: This plan has one-third probability of saving all three plants and all 6,000 jobs, but has a two-thirds probability of saving no plants and no jobs.
In the loss frame condition, the options were described in terms of how many plants and jobs would be lost:
• Plan A: This plan will result in the loss of two of the three plants and 4,000 jobs.
• Plan B: This plan has two-thirds probability of resulting in the loss of all of the three plants and all the 6,000 jobs, but has one-third probability of losing no plants and no jobs.
In the gain frame condition, 74 percent of participants chose Plan A and 26 percent chose Plan B.
In the loss frame condition, only 55 percent of participants chose Plan A, while 45 percent chose plan B.
Essentially, there was an 80 percent change in “persuadability” and willingness to choose the risky option by framing it as a loss instead of a gain. This is important for marketers and sellers because your prospects will regard your solutions as the “risky” alternative when compared to their incumbent or status quo.
These outcomes are consistent with the principle of loss aversion, an idea pioneered by social psychologists Amos Tversky and Daniel Kahneman. What loss aversion means for marketers and sellers is that people are more willing to make a change, do something different, or seek a risk significantly more often to avoid a loss than to acquire a gain.
Executive decision makers are no different — they demonstrate an amazingly greater appetite for the risky bet when the first option or current scenario is presented as a loss.
Emotions and intuitions have major sway in the decision-making process, and your success at convincing executives to do something different could depend on your ability to show them not what they stand to gain by switching to you,but what they stand to lose if they don’t.
By Tim Riesterer, Chief Strategy Officer, Corporate Visions
