Black Friday Tip: Take Your Buyer’s Photo and Then Close the Sale

Black Friday is next week (Thanksgiving is early this year), so if you’re in the retail business, make sure your digital camera is fully charged. You’ll want to take lots of photos that day.

You can literally put your buyer in the picture. In the Harley-Davidson world, I tell retailers to take a digital photograph of their prospective buyers when they are considering which model to purchase. This is a fantastic opportunity for the customer to see themselves on the motorcycle of their dreams — without having to invest in gigantic mirrors for the sales floor.

A photo positively differentiates that salesperson and that dealership from the competition, makes the prospect feel like he’s part of a fun family and gives the salesperson a wholly legitimate reason to capture contact information and follow up.

Photo Magic

This idea works in practically any face-to-face B2C experience. Working at Guitar Center and you’ve got a hot prospect eyeing up a new Les Paul Custom? Shoot a photo of him with that piece of musical art in his hands with that small digital camera in your pocket. Selling furniture? Take a photo of a customer kicking back in his recliner of choice. Employed by an art gallery? Snap an image of the prospective buyer standing next to the piece under consideration. Make sure you use your own (or the store’s) camera; this won’t work with the customer’s smartphone camera. The idea is for you to have possession of the photo, obtain the contact information, and then follow up.

I’ve also seen the picture method used with some degree of success in B2B situations. One company, for example, was considering buying a well-known author’s business books and training materials for its employees. While the corporate buyer was having dinner with the author’s representatives, the celebrity author surprised the buyer by joining them at the table. Naturally, the author’s rep snapped photos of the buyer and the author together, and the corporate buyer wound up giving the writer his company’s business. Was that solely because of the pictures? Of course not. But they didn’t hurt.

‘Ownership Transference’

Think about how you might incorporate a famous employee, cool logo or unconventional office building into photo opportunities for your customers. I can’t tell you how many Harley-Davidson enthusiasts pose next to the Motor Company’s iconic bar-and-shield logo each year at the corporate offices in Milwaukee – regardless of how much snow is on the ground.

These kinds of photographs aid the psychological phenomenon I call “ownership transference.” When someone sits on a motorcycle (or slips on a jacket or sits in a chair or slings a Les Paul over his or her shoulder), that person really is taking mental ownership. And having a digital photo to look at and share with friends enables people to relive and reinforce those positive feelings of ownership.

Putting your prospective buyer into the picture, both figuratively and literally, is a crucial step in your sales process.

Persuasion Power: Creating Emotional Links

There are quantitative and qualitative aspects to any persuasive argument, and you can’t afford to omit either dynamic.

In previous posts, I wrote about the importance of building your business case. It all begins with such quantitative actions as doing due diligence, then measuring return on investment and knowing how much you need to sell.

Mastering that synthesis of both quantitative and qualitative reasoning will place you far ahead of the other persuaders at the table and down the block.

In this post, I’ll focus on the importance of qualitative reasoning. As a result of your persuasive efforts, will your  organization establish higher morale, for example? Or will communication be enhanced and problems more easily solved? Will silos disappear or at least be altered? And might the organization’s image or brand also be enhanced?

Get In Touch With Emotions

Qualitative reasoning is much harder to measure and report than quantitative reasoning, but it’s worth the effort. With a bit of cognitive effort, practically any element of qualitative reasoning can be constructed to present meaningful numeric data. Two of the most common types of such data are customer and employee satisfaction indices.

Every organization — public and private, large and small, product or service — seeks the following if it is of sound business mental health:

  • Sustained high morale
  • Efficient and effective teamwork
  • Rapid and accurate problem-solving
  • Positive repute and community “citizenship”
  • Decreased distraction and disruption
  • Accurate and unbiased communication

These “emotional” factors (sometimes referred to as “soft factors”) are usually the most important when it comes to presenting your case and persuading your target. Because, as you already know, logic makes you think and emotion makes you act. All the new plant cost calculations in the world are useless unless current customers are providing the repeat business and referral business to drive the expansion.

Thus, your emotional appeals should deliberately and fastidiously involve soft factors, without exception. (Steve Jobs adamantly mandated that Apple’s engineers and software experts accommodate matters of style and design. I’ve seen million-dollar construction vehicles, capable of traveling at speeds up to 1.5 miles per hour, with rounded and streamlined sides! Why? Aesthetic appeal, of course!)

Determine which emotional factors best appeal to the other person. Don’t attempt to please yourself or choose to fulfill yourself and your needs, quantitatively and qualitatively. Rather, ensure that you address the other person’s emotional needs and push the appropriate visceral hot buttons.

This is not manipulative; it is the essence of sales and persuasion.

Persuasion Power: Know How Much You Need to Sell

In previous posts, I began explaining how to build your business case to achieve skyrocketing persuasion results. It all begins with doing due diligence and then measuring return on investment.

Another step with which you should be familiar when building a persuasive business case is the break-even calculation, which answers the question: “How many units do we need to sell to recoup our investment?” It is primarily used for product sales and can be determined in two easy steps.

Step 1:

Calculate the gross profit margin for selling one unit by taking the revenue derived from selling one unit at full retail price and subtracting the cost of goods sold for one unit. That equals the gross margin per unit.

Step 2:

Calculate the break-even number by dividing the net initiative by the gross margin.

For example, let’s say you’re a manufacturer partnering with a software design company to develop a point-of-sale software program for your retail distribution channel. The software company is charging you $15,000 per copy for the software, and you’re going to sell it to your retailers for $20,000. Your gross profit here is $5,000 per copy. The software company requires a minimum purchase of 100 copies in order to complete the customization required. Your initial investment is $15,000 x 100 = $1.5 million

Now, divide that $1.5 million by the $5,000 gross profit, and your break-even for this product is 300 units.

Break-even calculations are valuable because they help keep an organization headed toward a recognizable goal. The problem here (at least in terms of making a financial decision) is that break-even calculations don’t take into consideration time dedicated to the project. For that, you’ll need to do more calculations.

Master the break-even calculation and other fundamental business measures and calculations that often arise in meetings and discussions, and you’ll be well on your way to becoming a professional persuader.

Persuasion Power: The Role Return on Investment Plays

In a previous post, I began explaining how to build your business case to achieve skyrocketing persuasion results. It all begins with doing due diligence.

The most fundamental financial measure is return on investment. Companies use this measure to determine if they should take action — or if the action they took was worth it.

The classic ROI Calculation is this: ROI = Net Benefit/Total Cost.

You want a positive number here, which is why some companies even have ROI minimums before they take on a project. If your ROI number is negative, your persuasion priority is no good for your organization, and you should reconsider — even if your persuasion priority works to your own advantage.

ROI can be expressed in dollars, as a percentage or as a ratio.

How much did you invest, and how much did you receive in return? Let’s say you invested $100,000 in a marketing campaign, which in turn reaped $1 million dollars in sales.

ROI in Dollars

To find your ROI in dollars, use this calculation:

  1. Begin with the total dollars garnered from your initiative: $1 million
  2. Subtract the cost of your initiative: $100,000
  3. That leaves you with the dollars returned: $1,000,000 – $100,000 = $900,000

Not including the cost of the initiative would be a gross overstatement. Some financial experts might even consider this entire example a gross overstatement, because it doesn’t account for the cost of goods sold.

Let’s say the cost of goods sold in our example is $500,000. Now you have sold $1 million in product, but that product cost you $500,000 to produce and get to market. Our ROI dollars calculation now looks like this: $1,000,000 Gross Revenue – $500,000 COGS – $100,000 Marketing Investment = $400,000 ROI. If you want to appear reasonable, conservative, and responsible to senior management, use the gross profit number in your persuasive efforts.

ROI as a Percentage

Expressing ROI as a percentage is even more common than expressing it as dollars. Again, let’s use the same example of investing $100,000 and garnering $1 million in gross revenue — which, by the way, would be a fantastic investment! To find this:

  1. Calculate gross profit:
    Revenue – COGS = Gross Profit —> $1 million – $500,000 = $500,000 Gross Profit
  2. Subtract your investment from the gross profit:
    Gross Profit – Investment —> $500,000 – $100,000 = $400,000
  3. Divide that by your investment amount to determine a factor:
    $400,000 / $100,000 = 4
  4. Then multiple that factor by 100 to give you a percentage:
    4 x 100 = 400% ROI

ROI Ratios

A ratio demonstrates the quantitative relationship between two numbers, showing how many times one number contains the other. The most elegant way to write this is with a colon. In our example above, our initiative has a 4:1 ROI ratio.

Typically when using ROI ratios, whatever you invest is always 1. So if the marketing campaign example above cost $150,000 (instead of $100,000), you would simply divide $400,000 by $150,000 and find the product to be 2.666; now your ROI ratio (rounded up) would be to 2.7. That makes your ROI ratio 2.7:1. Not as compelling but still not bad!

The challenge with return on investment calculations is what’s included and what isn’t, on both sides of the equation. Do you include the total cost for salaried employees to work on your initiative as a cost? Do you attempt to quantify improved morale as a benefit? With ROI, like all measures, it’s valuable to consider those inclusions and exemptions. Every company has different ways of looking at the numbers.

One final note about ROI calculations: If you are using these calculations to forecast anticipated ROI, you may want to run a few different scenarios. What if sales are off by a particular percentage? What if your cost of goods sold is higher than anticipated?

As I’ve mentioned in the past: Know this kind of stuff, and you’ll be well on your way to becoming a professional persuader — because you’re proving the viability of your ideas and initiatives to your targets.

Up next: The Breakeven Calculation

Persuasion Power: Creating the Logical Foundations of Your Argument

Over the next several posts, I will explain how to build your business case to achieve skyrocketing persuasion results.

Building your business case is a great way of doing due diligence and ensuring that your persuasion priority makes good sense for both you and others.

This requires two primary building blocks: logic and emotion. Have you ever heard this line before: “Logic makes you think, and emotion makes you act”? It’s true.

Let’s Be Logical

Logic has many components: deductive reasoning, inductive reasoning, abductive reasoning — just to mention a few. But this isn’t a philosophical exploration. In business, if you want to appeal to logic, you should do so with quantifiable measurements. That’s right, numbers.

Evaluation of numerical data is crucial when building a compelling business case. To be successful in business today, financial literacy is a must. You’ll never reach your persuasive potential if you are terrified of your calculator. You need to know how to read and understand the basics of an income statement, a cash flow statement and a balance sheet. You also should understand that, like the act of persuading, working with financial figures is an art form.

Breaking It Down

Let’s say you invested $100,000 in a marketing initiative that generated $1,000,000 in sales. Was your return a million dollars, or was it $900,000? Or maybe it was yet another number? The answer depends on who’s doing the math!

Non-financial types often have trouble grasping disciplines like accounting because — even though it’s an exact science — there exist so many gray areas. Financial options are open to interpretation, judgment and approximation.  (Incidentally, in the example above, sales and marketing people will claim an ROI of $1 million, while the chief financial officer will argue the ROI is $900,000.)

Seemingly simple ideas such as revenue (which in some organizations is called “sales revenue” or “gross revenue”) aren’t etched in stone. For example, when is that revenue “recognized” (an accounting term for “counted”)? Is it when the purchase order is signed, when the goods are delivered, when you invoice or when the money hits your company’s bank account? See? Vagaries open up multiple interpretations and different terms. Are we talking about gross profit or gross margin — both terms that describe the same idea?

Much like social and corporate culture norms, you must determine the accepted financial norms and adhere to them. More than likely, you won’t have sole responsibility to actually perform the calculations for your company (that’s what financial analysts are for), but you should have the financial literacy to know how numbers are generated and what they mean. When you do, you’ll be able to speak the language of finance, ask more insightful questions and use that information to create more compelling quantitative cases for your priorities.

As you build your quantitative case, consider as many positive aspects as you can: If your initiative could boost product market share in the Northeast by 8 percent, what might it do in other regions? Are there international implications you could include? And don’t forget multiplicity. If your idea would increase employee efficiency, thereby saving the company dollars, make sure you apply that savings to as many applicable people as appropriate. Are there tangential benefits? If you sell more of product A, will increased sales of product B follow?

Know this kind of stuff, and you’ll be well on your way to becoming a professional persuader.

Up next: Measuring return on investment.

The Power (and Danger) of Confirmation Bias

If you’re visiting this website, you might already be familiar with the concept of confirmation bias: We seek facts, stats and opinions that prove our hypothesis or our preconceptions.

For example:

• The person we hired is doing a fantastic job.

• The program we launched is performing exactly as intended.

• The product our team created is adding what we thought it would to our market share.

But confirmation bias also can lead to poor decision-making, because it provides people with all the reasons to support their own claims and aims, with nothing to refute. If you’re attempting to ethically win the heart and mind of your persuasion target, you must do your due diligence. Look at all relevant data sets to make sure that what you’re proposing is the right thing to do. Once you’re convinced that your proposal is best for your target, for you and the surrounding situation, acknowledge the bias.

Leveraging confirmation bias in persuasion can sound like this:

When we started this project, I wanted things to work out with the proposed new vendor. Much like the researcher who tries to prove his hypothesis, I looked for reasons we should partner with this company. I looked at locale, capacity and all of the things that company does well. And that’s exactly what I found: reasons why we should partner.  

But we’d be fooling ourselves if we didn’t do our due diligence and ask if we’re not falling prey to a confirmation bias by only seeing what we want to see. We should spend a little more time considering this carefully and perhaps have a few others who aren’t as close to the project take a look. 

If you approach persuasion in this manner, you’ll be seen as intelligent, honest and a person of integrity. Why? Because you are.

What Persuasion and Anchors Have in Common

In a previous post, I wrote about the concept of anchoring: When it comes to numbers, we “anchor” to whatever number we hear first regarding a specific topic. Click here for more details.

Another component of anchoring, and one that is much more difficult to control but still worthy of consideration, is that of unrelated anchors. This can occur when numbers with no relevance to your initiative can nevertheless influence your target’s thinking.

In one study, participants were shown a bottle of wine and asked to estimate the highest dollar amount they would pay for that particular bottle. Before they wrote down their bid, subjects were asked to jot down the last two digits of their social security numbers. Those that had the highest social security number digits also bid the highest for the wine. The participants anchored to a totally unrelated number, which influenced their response.

If you are presenting numbers for the first time in a meeting, take into consideration whether your target is being exposed to other numbers prior to your presentation. If so, those numbers could impact the perception of your request. If you can adjust the agenda to give your good idea the best chances of success, do so.

Working With Numbers and the Concept of ‘Anchoring’

When it comes to numbers, we “anchor” to whatever number we hear first regarding a specific topic.

• The new manufacturing plant will cost $35 million.

• The marketing initiative will take $5 million of our budget.

• The new training program is going to run us $550,000.

Now, whenever we think of these initiatives, we will rightly or wrongly compare any cost figures to those. In fact, not only do we anchor, we compare and contrast, too.

Say, for example, you are quoted a price for a new training program. Next, you compare all subsequent figures you see and hear, relative to that first figure. And then, another fascinating psychological occurrence happens: The principle of contrast kicks in. If the first dollar amount you were quoted was $550,000 for a training program, and the next one is $750,000, that cost seems even higher than it actually is, because you are comparing it to your anchor of $550,000.

If you’re vying for approval on a budget, and you have numbers to share, always share a range of numbers early in your communication, and make sure those numbers are generous. That way, subsequent numbers won’t seem quite as high, because you’ve already anchored your targets to a numerical set.

Similarly, if you’re trying to dissuade someone from following a particular route, make certain early conversations use lower numbers, which will make subsequent numbers seem even higher by comparison.

Remember, though, that your numbers must always be two things: real and legitimate.

Next time: How do you control unrelated anchors?

Revisiting Cialdini’s Six Principles of Persuasion: Social Proof

In five previous posts, I’ve covered the noted psychologist Robert’s Cialdini’s five principles of persuasion: reciprocity, scarcity, consistency, liking and authority.

Now, we come to Cialdini’s last principle: social proof. People follow the lead of similar others, and this condition of social proof intensifies when there exists a condition of uncertainty (Sales are down! What should we do?) or similarity (All the other computer companies offer package deals.) The most powerful example of this is peer pressure among teenagers. Studies show that teens are more likely to vape if their friends and family approve.

Social proof holds sway in the office, too. If you notice coworkers signing up for the United Way HomeWalk, you will be more inclined to do so. If you see that others are working late at the office, you more than likely will start setting aside a few evenings to stick around, as well. If everyone appears to be on board with the new marketing direction, you will probably be on board, too — even if you’re not a fan of the new marketing direction.

We are social creatures.

The absolute best way to leverage social proof in a business setting is through the use of testimonials and referrals, which demonstrate that others have benefitted from knowing and working with you. And now your target will, too. That is the power of social proof.

It’s important to know that people often use Cialdini’s six principles, individually or in combinations, to make decisions. And now that you know them, so can you.

Revisiting Cialdini’s Six Principles of Persuasion: Authority

We defer to experts. Whether you’re a scientist, a medical doctor, a Ph.D., or a professor, if you have a level of expertise — and your target is aware of that expertise — you automatically become more persuasive.

This ties in well with Robert Cialdini’s fifth primary principle of persuasion: authority. (In other recent posts, I’ve covered Cialdini’s first four principles: reciprocity, scarcity, consistency and liking.)

If you have a title, credential or significant certification, make it known in subtle yet powerful ways. Put that distinguishing credential in your email signature or post your diploma in your office.

I know a professional who once attended a prestigious executive education program, but rather than tell everyone he attended, he simply showed up at meetings with a coffee cup from that university! Subtle … yet effective.