But even more surprisingly, of these two drivers, it is indecision that accounts for more of these losses than the status quo. Across all of the deals we studied, we found that only 44 percent of deals that end up lost to inaction are due to the customer's preference for the status quo—either not believing that things are bad enough to change or not agreeing that the vendor's solution represents a more compelling alternative. But 56 percent of the time, the customer expresses a desire to abandon their status quo and move forward in a new way with the vendor's solution but, for one reason or another, is unwilling or unable to make a decision and commit.
For salespeople who have grown up being taught that the status quo is their biggest competitor, the idea that the customer's preference for the status quo accounts for less than half of losses due to inaction is as shocking as it is troubling. Readers are likely to ask the obvious question—How do we overcome customer indecision?—and, to be clear, this will be our focus for the rest of this book. But in order to appreciate the importance of overcoming indecision, we need to first understand how it differs, in fundamental ways, from a preference for the status quo.
THE GRAVITATIONAL PULL OF THE STATUS QUO
As our pipeline story illustrates, it can feel to sellers that losing to the status quo and losing to indecision are one and the same. After all, they result in an identical outcome—the customer failing to take action—and can therefore be hard for salespeople to tell apart. But our research and several decades of social science tell us, in no uncertain terms, that they could not be any more different. And assuming that they are one and the same is an extremely costly mistake for a salesperson.
Status quo bias is, simply put, a person's desire for things to remain as they are. Decades of research in the fields of cognitive psychology and behavioral economics—and the experiences of sellers in every market and industry the world over—teach us that this bias has a tremendous hold on us as human beings. In fact, researchers have found that people will opt for the status quo even when presented with options that entail low switching costs and would clearly make them better off. In the late 1980s, for example, economists William Samuelson and Richard Zeckhauser ran a series of experiments involving employees at Harvard University selecting their health benefits plans. They found that even when presented with a far superior plan with a better deductible and premium, more tenured employees tended to stick with the plans they had already chosen (compared to new employees who disproportionately chose the better plan from the menu of options).
This happens for a few reasons, but the primary one is that change requires effort, and the unfortunate news—especially for salespeople whose job it is to sell change—is that people are genetically engineered to be lazy. Decades of research in the fields of biomedical physiology and kinesiology have demonstrated that the "principal of energy conservation" is hardwired into all animals, including humans. We are wired to choose the path of least resistance in any activity, choosing to minimize energy expenditure whenever possible. One fascinating study by physiologist Jessica Selinger and her colleagues showed that when fitted with a special leg brace that made normal walking more difficult, participants' nervous systems reflexively adjusted their gait to minimize caloric burn and exertion—without the participants themselves even being aware that it was happening. So, finding the path of least resistance is something we do without even thinking about it. It takes a lot to get us to change.
The pull of the status quo becomes even more pronounced when we feel like we've passed up on better options in the past. Once somebody has a track record of passing up on better options, it makes it even less likely that they will act on an objectively good option that is sitting right in front of them—something behavioral economists call "inaction inertia." Realtors see this all the time. When buyers pass up or miss out on their dream home, it colors their perception of every other home they look at even if, in absolute terms, any of these other options represent a better situation than the buyer's current housing.
Salespeople are very familiar with status quo bias and encounter it all the time with customers. In our study, we found countless examples of customers falling back on the status quo as a reason not to move forward. Specifically, we found three flavors of status quo bias. The first type is when the customer expresses an actual preference for how they do things already. "This solution is interesting," said one customer, "although, I have to be honest, we've been pretty happy with our current provider." Another pointed out how much they'd already invested in building their current homegrown solution: "We've poured a ton of resources into building our own tool in-house. Granted, yours has a fair amount of capability that ours doesn't, but the powers that be won't like the idea of junking what we built."
The second type of status quo preference we found is when the customer doesn't agree that the supplier's solution represents a compelling enough alternative. One customer stated bluntly, "I'm not seeing much difference between your offering and the software we use now." Others were more diplomatic but just as clear that they weren't buying what the rep was selling: "I really appreciate the time you've spent with our team and I find what you guys are doing to be really interesting. It's going to take a lot for us to switch providers, but we should keep the dialogue going. The product road map vision you painted is very exciting."
This excerpt ends on page 10 of the hardcover edition.
Monday we begin the book How to Be an Inclusive Leader, Second Edition: Your Role in Creating Cultures of Belonging Where Everyone Can Thrive by Jennifer Brown.