Neuroscience in Sales: Negotiations
There’s a surprising amount of research on neuroscience in areas related to sales – it’s becoming a field of increasing interest as companies and academia seek to understand the biomechanics of the buying and selling processes. Today we’ll be looking at how neuroscience applies to negotiations, and how understanding how our brains act during negotiations can make you a better negotiator as a sales professional.
Typically in a negotiation, both parties come in with a set objective they hope to achieve, and the back and forth is inherently set up as a clash of competing goals. But it doesn’t have to be that way – especially since making a negotiation competitive can generate negative feelings – not a good way to go about trying to close a deal. More importantly, as Jeremy Lack noted in a panel presentation to Harvard Law School’s Program on Negotiation, we react to negative experiences more quickly and hold on to them longer – meaning we don’t have enough brain resources for positive experiences. So when you’re arguing with a customer about what price to pay for your service, for example, it’s an adversarial conflict that produces negativity. Even if you close, it can be difficult to maintain the business relationship.
Dan Shapiro, in the same panel, noted that neuroscientific evidence supports the notion that soft skills are effective – and when sales people are aware of that fact, they’re much more likely to act and speak with empathy towards the person they’re negotiating with.
The importance of empathy has also been stated by Gary Noesner, an FBI hostage negotiator for 23 years, who called the process of building trust “the behavioral change stairway”.
The behavioral change stairway model utilizes the following steps (pun wholly intended):
- Active Listening
- Behavioral Change
Sound familiar? It should – we’ve written extensively before about the importance of active listening, being empathetic, building rapport with clients, influencing them to make the best decisions for their situation, and being able to effect behavioral change (these same things also apply to sales training and coaching, incidentally).
Following these steps (or walking up the staircase) frequently leads to a mutually beneficial outcome in the negotiation process.
This also involves sales reps getting away from thinking of a negotiation as a zero-sum game, which promotes an adversarial atmosphere because of the belief that gains for one side equals losses for the other side. Instead, sales reps should ask questions to uncover needs – such as what level of support the customer desires – and move away from demands – such as “This is my budget limit and I won’t go beyond that.”
These questions have the added bonus of creating a dialogue and exchange of information, but with a caveat: the information needs to be valuable and relevant to the sales conversation. Which makes the questions a sales rep asks all the more important – they need to be able to unlock the answers that will give the rep insight to how they can best advise the customer. A large research study on negotiation by Clemson University demonstrated the further value in this – finding out important information in negotiation resulted in a larger deal size.
Another way to use neuroscience to successfully close a deal is to keep in mind the findings of Jared R. Curhan of MIT. He discovered that people tend to place a higher value on the offers they make, and a lower value on the offers they receive. As a sales rep, being aware of this fact allows you to focus on collaboration, consulting, and advising in negotiations – so that the customer is the one to make the decision and offer to purchase, rather than you as the sales rep proposing the sale.
The Nucleus Accumbens and Its Role in Negotiation
One of the biggest neurological influences on the buyer is the nucleus accumbens. It’s part of the brain that’s been linked to reward, pleasure, and addiction, and is integral in sales negotiations. Why? Because when you frame the negotiation in terms of a positive, collaborative experience, it activates the nucleus accumbens. Especially if you’re able to point out how your offering can either win your customer more money or save it – because winning money has the same pleasure effect as getting high on a biological level.
Another source of activating the nucleus accumbens is engaging in risk-tasking, whereas a different part of the brain, the anterior insula, lights up in a situation of risk-avoidance, as a Stanford university study on the neural basis of financial risk-taking demonstrated. This can be used by sales reps to address different types of buyer personas – more adventurous prospects will be interested in the potential of a product and the chance for reward, whereas more cautious prospects will want to be assured that the risk is minimal – or at least superseded by a guaranteed upside.
Put all together, it’s clear that neuroscience supports the notion that empathy in negotiations is critical to success in sales. Fostering a collaborative relationship that builds trust and demonstrates value will eliminate the confrontational aspects of zero-sum thinking. The evidence also highlights the importance of information gathering and sharing to facilitate choosing the right offering to find the client needs (with the potential bonus of a larger deal). Sales reps should help the prospect to voice the decision to purchase on their own, and negotiating with customers, ascertain the latter’s personality type to determine whether to highlight the potential reward or the minimal risk associated with a particular purchase.
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