How Do You Apply the Gambling Theory to the Purchase Decision?

I’m at the blackjack table and doing fairly well. I feel a good hand coming on so I place a fairly large bet (well, large for me) of 50 dollars on the table.

The cards are dealt and the dealer shows – ugh – a king. I look at my own cards and see an ace (yes!) and…a 7 (dang it!).

Now what do I do? I’m holding a soft 18 against an ace. If the dealer has another face card I’m sunk. But if the dealer also has a 7, I win.

What to do? I am not confident about winning with what I’ve got. But I don’t want to break up a decent hand, especially since I put a fairly meaty bet on the table.

I stand on my 18. And I lose.

What are you going to do? I mean, that’s why they call it gambling, right?

Except for one thing. I had flawed thinking and I made the statistically bad play. The odds were not great either way, but the odds were better if I had hit the soft 18.

What does this have to do with sales?

As it turns out, plenty.

A gambler looks at a betting situation in a manner very similar to buyer looking at a purchase decision. There are two key questions that get asked:

• What is the probability of a favorable outcome?
• What are the consequences of a win or a loss?

In either case, if the probability of a favorable outcome is deemed to be high the decision is not difficult.

But if I am feeling less than confident I will move on to consideration number two; I will seek to understand the potential consequences of the decision.

This is where some pretty important psychological factors come into play. The professional gambler is trained to make non-emotional, statistically valid bets. But the typical buyer cannot easily detach from their own emotion.

When it comes to consideration number two (what are the consequences?), the customer will likely follow their tendency towards loss aversion. In short, we tend to fear loss more than we tend to appreciate gain (some suggest that we do so by a factor of 2:1!).

This is why I do not gamble. When I win $100 I think, “Oh, that’s nice.” But when I lose $100 I think, “Oh, my word – what have I done?!” The pain of the loss exceeds the pleasure of the gain.

The same holds true in a purchase decision. Your customer will fear the loss more than they anticipate the gain. No sale.

What do we do with that? It all comes down to one strategy: don’t let your customer get to point #2 in the consideration. If the probability of a favorable outcome is strong enough, your customer will not need to deal with that second consideration.

Sales professionals would be well-served to heap on the reasons why a purchase decision makes very good sense for the customer. When that buyer becomes a believer in the perfect solution for their situation, they step forward and roll the dice.

Here’s the good news: at that point, everyone wins!

Now hit me!