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Get New Clients By Thinking Fast And Slow

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We’ve all been there. Working on a prospect, or talking to a client, and they go off in another direction, or respond in a way we aren’t expecting.

Maybe you’ve just gone through a full half-hour presentation giving a detailed explanation of how your solution is the perfect answer to any problem the prospect or client might have or ever have, and their response is to tell you to come back later when they are ready to consider your proposal.<

You’re talking to a prospect or client expecting them to be listening with great logic and understanding, and they respond with an instant rejection. What’s going on?

It’s one of the biggest problems anyone trying to sign a new client has. They just don’t seem to respond to our presentation in any predictable way, unless we force a pattern through hard sell tactics such as the familiar open-ended, closed-ended and tie-down question methodology that latest marketing guru taught us.

The problem is, hard sell tactics lead to client churn, and increased marketing costs as you spend more and more of your resources to replace clients and grow.

Hard sell tactics lead to client churn, and increased marketing costs as you spend resources to replace clients. Click To Tweet

My favorite book, that I have never been able to finish, is ‘Thinking, Fast and Slow,” by Dr. Daniel Kahneman. It is a thick book with small print. 418 pages, with over 191,000 words. I’m still trying to get through it. I rely on reviews and discussions in order to understand Dr. Kahneman’s work.

In his review for the CIA, Frank Babetski focused on the importance of Dr. Kahneman’s work in the analysis of human intelligence operations. In previous blog posts I have tried to point out the importance of Dr. Kahneman’s work relative to marketing.

In fact, it was the application of his ideas to marketing that earned Dr. Kahneman, a psychologist, the Nobel Prize om Economics.

It was while I was reading Tim Ash’s blog post ‘The Heart of Conversion Rate Optimization’ that I started thinking about Dr. Kahneman’s work, and how the two systems of the human brain, ‘System 1,’ and ‘System 2’ affected conversions and client engagements.

Ash laid claim to the idea that mankind’s achievements, such as walking on the moon, inventing written language, and harnessing the power of the atom were the result of the failure of reason. He made the assertion that most major accomplishments that mankind has achieved throughout time have been the result of humankind’s status as probably the most social of mammals.

Ash points to Robin Dunbar’s famous ‘Rule of 150’ where he described the upper limit on the number of close personal bonds that a human can manage, and that if they can manage relationships with 150 other humans, and their changing relationships successfully, that person is able to create alliances, gather support for personal and business initiatives, and have a greater chance of achieving his or her goals.

I was with Ash until he started on his premise that rational thought is over-rated.

He continues by talking about the bias created by philosophers back to Plato, and how they trained us to value logic, consistency and reason, and how that does not fit with what is actually going on.

That’s where Dr. Kahneman’s work pops into my mind, and especially Babetski’s analysis of his work.

Kahneman describes the brain as having two systems for managing data, a ‘System 1,’ and a ‘System 2.’ Each system manages data in a completely different way, and over time System 2 feeds into the System 1 so that System 1 responses are based on the learnings of System 2.

For a marketer, especially someone marketing accounting services, this can cause all kinds of headaches, as most individuals have developed a decided System 1 response to financial matters, and by extension, to accountancy, of avoidance. In other words, once your prospect identifies you as an accountant, or financial professional of any sort, the next thing they do is to mentally shut down and change their focus to something more comfortable and easily handled by their System 1.

Your System 1 ability to discern debits and credits came after many years of System 2 iteration. Click To Tweet

When you chose to become an accountant, your System 1 was eventually forced to learn to reflexively differentiate between debits and credits and to easily recognize when a financial statement is ‘out of balance.’ This ability came at the expense of the energy expended learning and understanding the accounting equation which was managed by the System 2 processing over several years of education and learning.

On the other hand, System 1 guides a prospect or client into their comfort zone, which is usually for something other than accounting services. It may be for more customers, higher sales figures, increased market share, lower employee turnover, higher employee morale, less inventory shrinkage, or a solution to any of a dozen other needs. Anything, but accounting.

Experts posit that System 1 developed as a survival tactic as humans developed.

System 1 processing has been shown as a function of the Pineal Gland, and because it processes stored data much like computer RAM, acts with speed and requires very little energy. Whereas, System 2 manages the processing of new data, much like the energy hogging functions of your computers CPU, and as such becomes a very tiring function. That is why people who process new data on a regular basis report that they are more tired at the end of the day than someone who performs repetitive physical tasks for the same period of time.

Because it consumes so much energy to absorb new data

Babetski explains that System 1 generates impressions and feelings, which become the source of System 2’s explicit beliefs and deliberate choices. System 1, when it encounters something it cannot quickly understand and did not expect (in other words, a surprise), enlists System 2 to make sense of the anomaly. The alerted System 2 takes charge, overriding System 1’s automatic reactions. System 2 always has the last word when it chooses to assert it.

Which means, that your client may take the time to absorb your well formulated proposition, and at some point in time, probably will seriously consider doing so. Perhaps when they have a quiet time to devote to the analysis, or in the case of larger prospects and clients, when a committee studies the proposal. But, since they are now bringing System 2 into play, it will take time and energy for the decision to be made, and it is easy for System 2 to let System 1 make a quick decision, and ignore considering your proposal as it will be too exhausting to consider it.

Trying to engage System 2 at all times to prevent System 1 errors is impractical and exhausting Click To Tweet

The systems operate to minimize effort and maximize performance and are the result of hundreds of thousands of years of human evolution in our environment. They work extremely well, usually. System 1 performs well at making accurate models and predictions in familiar environments. System 1 has two significant weaknesses: it is prone to make systemic errors in specified situations—these are “biases”—and it cannot be turned off. System 2 can, with effort, overrule these biases if it recognizes them. Unfortunately, System 2 is demonstrably very poor at recognizing one’s own biased thinking. Trying to engage System 2 at all times to prevent System 1 errors is impractical and exhausting.

Kahneman’s insights pertain to the entire spectrum of marketing operations. We accept marketing practices that demonstrably impede productivity in order to reduce the danger of missing a sale, or losing an engagement. At the same time, we would almost certainly consider the same amount of lost productivity a major defeat if a competitor had inflicted it on us. This is what Kahneman calls the loss aversion bias. System 2 does not assert control over System 1’s cognitive ease at imagining a disaster because increased productivity is much more difficult for System 2 to imagine.

As simple as it sounds, this has profound implications for the marketing of accounting services.

Which is why two of the main components of the “Absolute Beginners Guide To Starting And Building Your Own Accounting Practice When You Are Flat Broke” training course are learning the proper way of implementing a Client Needs Analysis, and the details of the Rainmaker ‘Seeding’ method of introducing yourself to a new prospect.

Each of these components is designed to ease your System 1 into the knowledge of your prospect’s or clients business in a way that allows their System 1 to make a decision to work with you. This decision will be informed and, hopefully, rational and free of bias

Kahneman breaks forecasting and prediction down into two main varieties. Click To Tweet

Meanwhile, none of us are immune to what Kahneman calls the planning fallacy, which describes plans and forecasts that are unrealistically close to best-case scenarios and could be improved by consulting statistics in similar cases. This opinion, for example, took twice as long to write as I thought it would, just like almost every other blog post I have ever written.

Forecasting and prediction are core mission elements for accountants. Kahneman breaks them down into two main varieties. The first relies on look-up tables, precise calculations, and explicit analyses of outcomes observed on similar occasions. This is the approach an accountant uses to predict the amount of cash reserves might be needed to handle seasonal growth.

Other forecasts and predictions involve intuition and System 1 thinking. Kahneman further breaks down this variety of prediction into two subvarieties. The first draws on the skills and expertise acquired by repeated experience, in which a solution to the current problem comes quickly to mind because System 1 accurately recognizes familiar cues. The second subvariety of intuitive prediction, which is often indistinguishable from the first, is based on biased judgments. This type of intuitive prediction, typically forwarded with considerable confidence, very often leads to trouble.

The trick is in using structured techniques and approaches – or applied System 2 thinking- in solving the needs of a prospect or client a way that eliminates their System 1 reaction which may be discouraging, delaying, or even eliminating the intuitive solution you have presented.

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