Is Your Customer Experiencing Buyer’s Remorse? Here’s why

Tuesday: “Yes! They said ‘yes’! Sweet… Contract signed; hands shaken; commission calculated. It’s a great day!”

Thursday: “Cancel? What do you mean, cancel?” (You can’t cancel – I already spent the commission!)

We all know that buyer’s remorse is a very real phenomenon.

Buyer says yes. Buyer walks away. Buyer has second thoughts. Buyer backs out.

And woe to the children of that salesperson. That night’s dinner table will be a less-than-happy place.

But why? Why did the customer back out? What was really going on inside her/his brain?

Let’s start by looking at the psychological anatomy of a healthy sale.

The Endowment Effect

It has been proven that you like something you purchase the moment after you bought it more than you liked it the moment before. This is a psychological process labeled the endowment effect. People ascribe more value to things merely because they own them. The endowment effect causes us to appreciate something we have committed to.

For example, according to Harvard psychologist Dan Gilbert, if a store has a “no return” policy, we actually like the item we purchased more than if it was an item easily returned. Why? It’s because of the endowment effect. We own it and that is final. We then create the narrative as to why we like it so much.

In other words, we make up a story.

Buyers and Storytelling

Storytelling has a great deal to do with why a buyer commits to a purchase decision, but it also affects the decision to cancel. In either case, the customer creates a narrative to justify their position.

For example, my wife Karen and I once purchased a home and later backed out of the transaction over some concerns about disclosures. Years later we find ourselves saying, “Oh, man – what were we thinking? We would have been miserable in that house!” Probably not, actually. It’s just the narrative we invented to rationalize the love of the home we now have.

Anticipated Regret

When a buyer is uncertain about any aspect of a purchase decision, there are mental loose ends. That uncertainty tells them there’s something left undone.

High amounts of uncertainty that remain at the time of the sale lead to a potentially dangerous result called “anticipated regret.” Buyers have a way of playing out a future in their mind that is anything but appealing.

That is where the negative storytelling begins.

But not just any storytelling – a particularly nasty type of storytelling called “catastrophizing.” This is the natural result of our emotional brain trying to justify why a decision not to go forward is really a better thing.

Here’s an example: I really like this watch, but it’s bulky. I know expensive watches are typically bulky but I’m worried about achy wrists. I’m also worried that it will stand out; that people will notice it.

Two observations. First, when was the last time your wrist actually hurt because of your watch? Second, we buy nice jewelry because we want it to stand out.

The catastrophizing doesn’t have to make sense. It’s a story that’s contrived in the emotional brain, after all. Harvard psychologist Dan Gilbert states that uncertainty serves to amplify emotions. It shouldn’t come as a surprise that catastrophizing will be the result.

Another example: I’m having second thoughts about this high-end treadmill. I know I don’t want a cheap one, but this is a lot of money to spend on something that I’m not sure I’m going to use. Will I end up being one of those people with this beast of a machine in my master bedroom, something I can’t even see because it’s strewn with clothes, and then I break my toe in the middle of the night?

Silly? Yes. But that is how catastrophizing works.

The Remedy

Want to reduce catastrophizing? Start by reducing uncertainty.

Want to reduce uncertainty? Start by asking way more closing questions.

You can read more about how to do that in this blog post.

All you have to do next…is change their world.