The JOLT Effect - Book Summary

Unveiling the secret sauce to becoming a proficient salesperson

Have you been delving into books about sales strategies but still feel like something's missing? It's possible that the age-old sales techniques you've been employing are not as potent as they once were. This is due to fresh findings which suggest that what truly distinguishes top-tier salespeople from the rest might not be what we thought it was.

Matthew Dixon and Ted McKenna, authors of "The JOLT Effect", embarked on an exploration that involved dissecting over 2.5 million sales transactions, with an objective of distinguishing the golden nuggets of success from the tactics that fell short. The shocking revelation? Much of what they previously considered best practices in sales turned out to be misleading. But instead of wallowing in regret, they chose to share their eye-opening insights with us.

In this narrative, we'll delve into the ins and outs of their revolutionary JOLT effect. We'll substantiate our discussion with evidence demonstrating how this groundbreaking approach significantly enhances the success rate for salespeople. After our journey, you will comprehend why articulating a customer's needs can make them more inclined to make a purchase, how occasionally interrupting a customer can prove beneficial, and how an experiment involving jelly tasting has pertinent lessons for our understanding of human decision-making.

Decoding the real obstacle to sealing the deal

For many years, the common wisdom among sales experts held that the surest route to making a sale is to overcome the client's propensity for the status quo. This belief has been so deeply ingrained in the sales field that it's been adopted virtually across the board. Regrettably, this supposed pillar of sales wisdom doesn't quite hit the mark.

Contrary to this popular notion, the major hindrance to securing a sale isn’t predominantly due to "status quo bias." The actual stumbling block is customer indecision, which accounts for a whopping 56 percent of failed sales attempts. While it may seem like splitting hairs, distinguishing between the status quo and customer indecision is crucial.

Let's dissect this distinction further. While it's true that humans are naturally inclined towards maintaining the status quo, a stronger bias lies in our inbuilt fear of loss — a phenomenon known as "loss aversion."

Loss aversion is the invisible hand preventing numerous customers from completing a purchase, even when they acknowledge that they'd be better off with the product.

So, what prompts customers to waver, even when they are motivated to change the status quo? This conundrum can be attributed to yet another mental tendency — the omission bias. We universally despise making incorrect decisions, but the dread of actively making a mistake often trumps the remorse associated with passively missing out on beneficial actions. In simpler terms, customers fear making a regrettable purchase more than they fear missing out on a fantastic one. Consequently, they find it less taxing to defer a decision than to take the leap of faith.

So, how can salespeople navigate this maze of customer indecision and clinch the sale? Before we tackle this, let's touch on a prevalent sales approach that typically misfires: relitigating the status quo. This is when salespeople attempt to counter indecision by reattempting to persuade the customer to buy the product. However, Dixon and McKenna's research suggests that the relitigation approach shoots down sales attempts in 84 percent of cases.

Luckily, there exists an approach to conquering customer indecision. This approach, dubbed the JOLT effect, comprises four strategies. We'll embark on understanding the first of these strategies, assessing the indecision, in the next segment.

Deciphering the puzzle of customer indecision

Every sales representative faces the daunting challenge of a client's hesitation to finalize a purchase. Hence, comprehending the roots of this indecision and evaluating its gravity is the cornerstone to vanquishing it. This concept, coined as 'judging the indecision', forms the 'J' in the JOLT effect.

As per Dixon and McKenna, customer indecision springs from three fundamental sources: valuation dilemmas, information deficit, and outcome uncertainty. By pinpointing the specific type of indecision a customer is grappling with, you can tailor your application of the JOLT effect to the situation. Let's investigate each of these signs.

Initially, we have valuation dilemmas, where customers are unsure about their options. Clients facing this type of indecision often seem perplexed about their preferences or struggle to express what they truly desire. To surmount valuation dilemmas, the JOLT effect suggests offering your own recommendation, thereby enacting the 'O' in the JOLT strategy.

Next, we encounter indecision triggered by an information vacuum. This is typically characterized by a customer excessively obsessing over research, often going beyond reasonable lengths. Such customers incessantly demand more information, regardless of its relevance, and tend to postpone their decision to learn even more about a product. The remedy to this scenario, as per the JOLT effect, lies in 'L' which implies limiting exploration.

Finally, we have outcome uncertainty. Here, customers feel anxious about the potential risks tied to making a purchase. An evident sign is when a customer harps on about their past regrettable purchases. To tackle outcome uncertainty, the final facet of the JOLT effect recommends taking risk off the table.

But before we dive into each of these strategies in detail, let's explore how to gauge a customer's degree of indecision. Research suggests that top-performing salespeople can distinguish promising customers from those plagued with chronic indecision. There are four factors to consider in this differentiation.

The initial factor revolves around the volume of information a customer seeks. Although it's normal for customers to want to be well-informed, those who seek every iota of information are unlikely to be appeased.

Secondly, if a customer engages in "backtracking" — oscillating from being on the brink of a purchase to reverting to indecision — it's likely that they may not proceed with the purchase.

The third factor relies on how a customer evaluates their options. If they continuously alter their judgment criteria, it can pose significant challenges to the sales process.

Finally, always assess whether the customer is open to accepting a 'good enough' option. Identifying customers who are willing to settle for such choices helps you prioritize these more promising prospects.

Having dissected how to analyze the triggers and intensity of a customer's indecision, let's pivot towards the sales techniques that can help conquer it.

Proposing your suggestion.

An abundance of choices can be appealing — until it becomes overwhelming. This dichotomy is embodied in what's known as the "paradox of choice". While freedom of choice is generally cherished, an excessive array of options can induce feelings of overwhelm.

A now-renowned experiment involving an assortment of jams in a supermarket eloquently illustrates this predicament. In the experiment, scientists set up a table displaying 24 diverse types of jams. This dazzling variety piqued the interest of customers, with 60 percent of them stopping by to sample the offerings. However, a mere three percent actually followed through with a purchase. The next day, the experiment was repeated but with a pared-down selection of just six varieties. In this instance, fewer customers — 40 percent to be precise — stopped by, but notably, a substantial 30 percent made a purchase.

This underscores the concept that while an extensive array of options can captivate customers, it doesn't necessarily translate into actual purchases. This is where your recommendation comes into play. By suggesting a choice, you can uphold the diversity of options that customers appreciate in the preliminary stages of the buying process, and then streamline the choices to prevent analysis paralysis.

So, how can you put forth compelling recommendations to influence customers? The first step is termed as "proactive guidance". This is when a salesperson transitions from passive inquiries such as "Can you help me understand your needs?" to assertive statements like "Here's what you need".

This subtle shift gently steers customers towards a particular choice. And, research backs its efficacy. When sales representatives employed "proactive guidance", their success rates escalated from 18 percent to 44 percent.

The second ingredient in proposing a recommendation is advocacy. When suggesting a choice, make it a personal endorsement. High-performing sales reps utilize phrases like "If I were in your shoes, I would opt for X." This personal element has been demonstrated to boost success rates by a substantial 74 percent!

Through proposing your recommendation, you can effectively counter indecision sprouting from valuation dilemmas. In the ensuing segment, we will delve into how to tackle the problem of insufficient information.

Restraining the exploration journey.

Chances are, you've encountered a specific breed of customers who seem to be insatiable when it comes to acquiring information about potential options. They amass a wealth of information, inundate you with queries, and scrutinize every detail of each alternative — only to conclude that they can't finalize anything.

Dixon and McKenna propose three methods to effectively navigate interactions with these relentless nit-pickers: controlling the information stream, pre-empting needs and objections, and embracing radical honesty.

First off, controlling the information stream can be achieved by persuading the customer of your expertise on the subject. If a customer is confident in your expertise, they're more likely to rely on your judgment. Interestingly, top-notch sales reps who sought external experts to converse with customers did not perform as well as those who exhibited expertise themselves. If a customer perceives that you require support to assist them, they're more likely to question your judgment.

Predicting customers' needs and objections is also crucial. Approximately 69 percent of sales calls are faced with customer objections. Having a strategy to handle these objections can make a significant difference.

Crafting a counter-argument — a response to a customer complaint or concern — is crucial; sales calls without a counter-argument saw a dismal win rate of just 17 percent. However, a "pre-counter-argument" is even more potent. This occurs when a sales rep anticipates a latent customer concern and addresses it preemptively. For instance, saying "I suppose you might be concerned about X." This kind of response helps assure the customer that you comprehend their concerns, even if they aren't explicitly articulated.

The third tip, practicing radical honesty, involves two facets: genuinely caring for the customer and the readiness to confront them directly. The most effective salespeople not only prioritize their customers' interests but also have the courage to point out when their customers are misguided. For example, if a customer requests another demonstration that you know is unnecessary, don't hesitate to politely tell them so. Instead of indulging them, probe deeper to uncover the root of their hesitation.

Another intriguing observation from the authors' research pertains to the listening habits of sales reps. Surprisingly, those who interrupted and spoke over their customers achieved significantly higher win rates. But these weren't impolite interruptions. They're termed as cooperative overlaps. This is when a listener actively participates in the conversation by "speaking along" with the customer to validate their statements. Subtle phrases like "Hmm, that makes sense" and "Yes, I concur" exemplify cooperative overlapping.

In the subsequent section, we will explore the final step of the JOLT effect: removing the element of risk.

Eliminating the element of risk.

Indecision is a many-headed monster, and one of its most potent forms stems from the customers' dread of making a regrettable choice. No one relishes being caught in the throes of buyer's remorse, and potential customers frequently find themselves paralyzed by the fear of it.

Mediocre salespeople often try to combat this concern using the antiquated FUD technique — instilling fear, uncertainty, and doubt. However, this approach is counterproductive, as employing FUD to overcome customer indecision only heightens their fears.

Instead of resorting to FUD, here's a three-pronged strategy that effectively mitigates the perceived risk associated with the purchase. Rather than inducing guilt in a customer for not buying, this approach focuses on instilling confidence in their decision to buy.

To start with, establish realistic outcome expectations. When salespeople over-promise, customers usually see right through it. However, if you can assure a certain positive impact, customers are more inclined to believe it. According to the authors' research, when expectations were set incorrectly, win rates lingered at a mere 20 percent. But when they were set accurately, the win rates leaped to 51 percent.

Next up, extend downside risk protection. Customers respond favorably to safety nets such as opt-out clauses and money-back guarantees. However, these options are seldom mentioned in sales calls — roughly 15 percent of them, to be precise. If these kinds of safety nets are not viable, there are other tactics you can employ. Contemplate offering professional service support or devising contracts that explicitly address customer concerns — perhaps by incorporating an opt-out clause for a specific component of the sale.

Lastly, begin on a smaller scale — even smaller than what the customer might initially want. Instead of aiming for the largest, most profitable sale, present the customer with an option that is more affordable and less intimidating. This helps convey to the customer that you are a trustworthy custodian of their resources, rather than pressuring them into making a purchase.

Collectively, these three techniques help eradicate the element of risk and successfully JOLT the customer out of their indecisiveness.

Wrapping it up

The principal villain behind missed sales opportunities isn't the customers' inclination to maintain the status quo. On the contrary, it's customer indecision, responsible for an astonishing 56 percent of these missed opportunities. This is primarily due to people's inherent preference to avoid losses and the intrinsic dread of making a regrettable decision. To combat this challenge, the authors propose a four-part method known as the JOLT effect. This approach entails identifying the core of the indecision, offering suggestions to alleviate the paradox of choice, controlling the exploration of endless alternatives by anticipating needs, practicing radical honesty, and eliminating the risk associated with the purchase to instill confidence in the buyer.