In this episode I reflect on some recent research on how status quo bias affects a client’s decision making process and why that’s important for us to know when presenting new ideas.
In this episode we dive into why, when presenting new ideas to our clients that require them to make a big change, it’s useful to understand the psychology of why they might be reluctant to.
By knowing this we’re then able to present the ideas with this in mind and provide the information that they require to make their decision.
I hope you enjoy this episode and I’d love to hear your thoughts on this topic.
Transcript:
So today’s episode is a solo episode. And I want to talk to you about presenting new ideas to your clients with behavioural science in mind. Now, what I’m going to be talking about is the idea that when you present new ideas to a client, that for them represents a change in what they’re doing already, it’s useful for us to put ourselves in the shoes of the client. So why is that important? Well, our clients are often working for companies. So they are measured on their performance and the decisions that they make. So if we are presenting an idea, which might seem a bit of a bold idea, so maybe it’s a new campaign concept, or perhaps a new content marketing strategy, or even a new channel that we’re proposing, like doing some kind of app, this for the client represents a change. And it’s therefore useful to understand the psychology of making a decision to change so that we can present our ideas accordingly. Now, the background to this is twofold. One, I am really studying for writing a book, and I’m doing lots of research. And I’ve got quite deep into behavioural economics, which I’m loving. And secondly, I’m reading some research that came out in December 2020. So behavioural economics is the study of psychology, if you’re not familiar with it, as it relates to how we make economic decisions, and they use experiments to develop theories about how we make those decisions. And for many of you listening, you’ll be very familiar with Rory Sutherland, who is the vice chairman of Ogilvy, and is probably the most well known person to have popularised this field of study in the advertising industry. I’m also, as I said, reading some research that came out in December 2020, conducted by a company called Corporate Visions, and it was provided in a book called The Expansion Sale by Eric Peterson and Tim Riesterer, and basically a range of biases have been identified in behavioural science and economics as a result of the way people think and feel. And one of those biases that I want to talk about today is called status quo bias. And no, it’s not the band, if anyone’s that old, they remember like me, the very popular band, but it means that people prefer essentially things to stay the same, even if staying the same isn’t the best decision. So if we are thinking about our clients, and we’re presenting new ideas to the client, that might mean that they need to make a change of what they’re doing currently. So it’s useful to address these different points. So a simple example, if you shop around for car insurance, for example, you’ll probably get a better deal but not everybody shops around, which would be the rational thing to do. So why does that happen? According to some research, and the research psychologist, Christopher Anderson, in his paper, The Psychology of Doing Nothing, there are four main causes of status quo bias. The first one is called ‘preference stability’. And this essentially means that people naturally dislike uncertainty. So a previous decision they made becomes their preference. And if someone tries to challenge that decision, by bringing them some new information to the contrary, they want to quickly resolve that insecurity and uncertainty to default to their original preference. Second thing about status quo bias is anticipated regret and blame. So people think, what if it goes wrong? Will they regret it? And will they be blamed. And if you think about our clients for a moment, their career success could be riding on this big decision they make to either go with an idea that you present or not, or their colleagues might ridicule them or point the finger. So you can see why making that decision to change could be affected by this element of status quo bias, the anticipated regret and blame. The third thing is the perceived cost of change. So people naturally think that if you’re presenting an idea to them, that that’s going to be costly. And if they stay the same and do nothing, it’s not going to cost them anything. And we’re going to go through these and see how you can overcome each one. The fourth one is selection difficulty. And what that means is that we usually are presented with an overwhelming amount of information to make a decision. And the decision making part of the brain is just simple. And it needs a clear contrast between what you’re doing now, and what that change promises to do. So that element also needs to be addressed when you’re thinking about presenting new ideas to the client. So for our existing clients, there are a number of things that we need to make sure that we do during that presentation of this new idea to allay their fears and to make them feel comfortable about making the decision to change. And similarly, if we are prospecting for new business and talking to completely new potential clients, we want to be disrupting their status quo to challenge what they’re currently doing. And maybe we are challenging what they’re doing with a current agency. So we have to disrupt their thinking. So it has two consequences, the status quo bias. Because for our existing clients, we are their status quo bias, we are their choice of agency.
So let’s go back to how we present an idea to a client that’s already a client of ours so that we are not disrupting their status quo of decision to stay with us. But we are disrupting the status quo with what they are doing in their marketing capacity. So let’s think about those four things. Again, the first one was preference stability, people don’t like to make change, because uncertainty is uncomfortable. So what we can do during our presentation of a new idea is to first of all reinforce why they chose us by showing them the results that they’ve got from us so far, and some progress on the goals that they are making as a result of the work they’re currently doing with us. And that should allay their preference to believe that just confirms their preference stability, for choosing us, but then we need to destabilise slightly what they’re currently doing in their, in their marketing activities to consider making a change to think about our new idea. So we need to destabilise their their current thinking but without throwing the baby out with the bathwater. And the idea is so different, that they might think, oh, we might need to get a few more agencies around to help us make that decision. So we need to present evolving trends that will be affecting our clients and what they’re already doing to meet their current goals. And by doing those two things, we are anchoring the client in their decision to choose us.
The second thing is anticipated regret and blame. So if we think that the client is going to regret making the decision to change, we need to allay their fears early in our presentation. So we can provide evidence of success through the work that we’ve done with other clients. So we can show them case studies of similar clients who have made a decision to change to do a project with us. And we can show case studies of it being successful.
And then the third element was perceived cost of change. And as we said, we as human beings, we think that if we make a change, it’s going to cost us money. But the cost of doing nothing can sometimes be more of a loss to us, because we might be losing out on an opportunity. So we need to, during our presentation, show the cost that’s been invested so far, to create the momentum we’ve already created with the work that we’re doing so far, but also highlight the potential loss of not making that change. And I’m going to give you an example in a minute so that the theory kind of makes sense.
And then fourth element was the selection difficulty. So how can we show our clients or simplify the client’s decision to make this change? Well, simply we can show them what the pathway looks like if they continue to not take any action to make the change or to capitalise on this opportunity that we’re presenting to them with this new idea. And similarly, what happens on the pathway, if they do make the change, what’s the upside, so really being clear about what the selection could look like either way. And just to put an example around this, if we go back to the beginning of preference stability, let’s suppose that we are a content marketing agency, and one of our clients has done ad hoc projects with us so far, but we want to propose to that client that they do a whole content marketing strategy with us and a key messaging workshop so that we can really understand the bigger picture and bring all of those elements together. We need to, in our presentation, counteract four of those elements of status quo bias to persuade the client, why this might be a good idea for them.
So the first element as we remember is preference stability. The presentation has to start by reflecting on all of the ad hoc work that we’ve done so far in our capacity as copywriters because they’ve done ad hoc projects with us so we can show what projects we’ve successfully completed to date, perhaps the metrics that we’ve been able to achieve maybe it’s increased reach or percentage engagement from the work that we’ve done, or maybe we’ve been driving attendance to an event through the pieces, the copywriting pieces that we’ve been doing so though that is delaying their fears reinforcing their choice of us.
Secondly, if we want to help them understand that change is needed, then we can present the facts of these evolving trends. So we could say that according to the Content Marketing Institute, for example, 86% of other marketers who revised their content marketing strategy, expect the adjustments to stay in effect for the foreseeable future, meaning that the majority of other marketers are actually revising their content marketing strategy, and therefore, it would be a good idea for us to do the same. Similarly, you can throw some statistics out there in terms of the new platforms that people are using. And again, citing the report, you could say 66% of B2B marketers, like you said that LinkedIn was the best social platform for generating best overall results. And as we know, from the work that we’ve done with you, so far, LinkedIn hasn’t been a key focus for us. But we know that it’s been hugely successful for many others. So we think that it’s worth us, looking at your entire content marketing strategy, and how we might incorporate LinkedIn, as a social media platform, in that overall strategic approach. And then perhaps we can talk about the use of Instagram for paid social, for example, and the rise in how other marketers are currently jumping on that trend. So these are all evolving trends that are in our ballpark, they’re our, our area of expertise, they build on the ideas that we’re already working with the client on. And so therefore, we are asking them to think differently about what they’re currently doing. The second element is an anticipated regret and blame and we certainly don’t want our idea to be regretted. The way to counteract that for this example that we’re using at the moment is to remind them, first of all, for all the time and resources that we’ve spent so far developing the momentum and show the case studies of other clients who are also revising their strategy and the success that they are having.
And then thirdly, the perceived cost of change. So we need to make sure that we highlight that if the client doesn’t change, there is a potential downside of not changing. And as we know, from Daniel Kahneman’s research, he won a Nobel Prize for his work in this area. And he found that people are twice as likely to make a change as a result of a loss, a potential loss, rather than a gain. So we do need to highlight if we don’t change and conduct this new, you know, review of the content marketing strategy, then, if we stay the same, it could be damaging if we show that the impact on brand reputation as a result of not updating the messages that, you know, have needed to be changed in light of, first of all the research, but also maybe current events, like the pandemic and how consumer behaviour is changed, then, you know, it could be detrimental to our brand. So that’s another example of how we can show them the cost of doing nothing.
And then finally, selection difficulty. And this is where we can clearly show them examples of what other brands are doing currently, perhaps, if they don’t review their content marketing strategy, and continue with messaging that was relevant last year, for example, and the backlash that they can have for their brand from their customers. And on the upside. If they do revise their content marketing strategy, we could show examples of how that really is conducive to consumer brand, consumer sentiment and how successful other brands have been.
So I really hope that that has given you some food for thought about presenting new ideas to your clients. And just to recap, those four elements of this status quo bias are preference stability, anticipated regret and blame, perceived cost of the change and selection difficulty. So if we are thinking about presenting ideas that help our clients change, then we need to be aware of how their current thinking is around making changes.
If you’ve enjoyed this episode, this is just one part of a nine part process that we go through at the Account accelerator. So this one part is included in the section of my Account Accelerator training programme, all about growing existing business and how we can make sure that we go from unpredictable project revenue to more predictable account growth by making sure that we have a client centric approach to account growth, and this is one small element of what we go into a lot more depth on and other elements of psychology that help us in the way that we manage clients.
So if it sounds intriguing to you, and you’d like to know more, I’m running my next Account Accelerator training programme on the 15th of April 2021. So please let me know if you’re interested in joining that one at Jenny Plant on LinkedIn, or jenny@account managementskills.com. Until the next time.
