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Neuroscience and Decision Making

Let's talk about the neuroscience of decision making, and it's a science. Now, that doesn't look like science up there at all, does it? What does it look like? Well, it's buffalo tacos. So I will be the first to tell you, actually my husband will be the first to tell you, that I'm a horrible cook. So, never learned to cook, never was good at it, too many details for me. There's one good thing I cook, and that's buffalo tacos. Now, you can't mess up buffalo tacos, and I do cook a mean buffalo taco. Here's the question, let's suppose I invite you over to my house and I'm cooking the one thing, I can never have people over to my house twice, right? (laughing) For dinner, unless I order takeout. Like, oh, buffalo tacos again, cool! Let's suppose I have you over to my house for buffalo tacos. Now I have to prepare the buffalo tacos. So what I'm gonna do is I'm gonna make a list of all of the ingredients, right? And you know, the ingredients are lovely. Then I'm gonna go to the grocery store...

, I'm gonna find all of the ingredients, I'm gonna put them in my cart, and then I'm gonna go to the cashier. Here's the question I have for you. At what point did I buy the buffalo meat for the tacos? How many of you say, the minute I made a shopping list? I want a show of hands, the minute I made a shopping list, okay, great. How many of you say the minute I put it in the cart? Nobody, Barbara. And how many of you say once I got to the cash register? (laughing) Faust goes to Tony, awesome. We don't know. We don't know. Because the truth of the matter is, I could have decided at home and then gotten to the grocery store and thought, ah, Italian, ready made! I can just get this! I could change my mind, couldn't I? I could be positive I was gonna do it, and then I could change my mind. Or what could happen is I could get a phone call and all of the sudden leave the store completely and get drive-thru. So it's the same for your customers. We have no idea when your customers decide to put the tacos in the cart. And I can assure you, it's not at the end of the sales cycle. We are doing things throughout the sale cycle that are getting commitments and getting buy in all the way through. And I can't tell you how many sales directors, sales leaders they call my office and they say, Shari, we're really good at all that connecting and asking and listening and linking stuff, we just need some help with the I wanna think about it part. Yeah, can you do a whole seminar on that? As if there's some magic thing we're gonna say at the end that's gonna make it all good, and I love the guys, the real Tony's, the big Tony's, there's not any real Tony's in the room, who just want like that magic close. You know, they think it's like a pillar, a potion, and they're gonna pull it outta somewhere. And you know, this always be closing mentality. Which A doesn't work today, and B there is no magic close, it's what happens all the way through the process. We know from brain research that if people make certain commitments throughout the sales process, they will very easily make the bigger commitment at the end of the sales process. So the real question today is what are those commitments? Because a costumer doesn't come in and say, hey just so you know I'm good with three out of five of these, you know, you gotta work on the other two, they're not that generous, right? So we need to know what are these psychological commitments? And again, they work in any industry for anyone, there is a process that you and I go through in order to decide. And if as sales people we don't know what that process is, we're never going to close a deal unless we get lucky, and you will get lucky 10% of the time. But I'd rather have a strategy 20 to 30% of the time. So let's go ahead and look at the closing formula. How are decisions made? How do we all make decisions? Buying decisions are based on two factors. The emotional state of the client, although we would never admit it. And answering what I call the five why's. Several years ago I developed something called the Five Why's, or the Five Commitments, and this was about 20 years ago. And I've refined one of the commitments for today's new overloaded, saturated, consumer. And it's very relevant. But this will change everything that you know about how people buy and about sales. So when we talk about emotional state, we talked a lot yesterday about people need to like you, and we're gonna look at that a little bit, and then we're gonna do a real practice on these five why's so that you can see the five commitments that somebody needs to go through in order to make a purchasing decision. So let's look at the role of emotional state in decision making. If you've got kids, you know kids are brilliant at this, right? Before they ask you for more allowance or an allowance, or to go out to pizza, or for that cool new video game, what's the first thing they say? Hey mom, are you in a good mood? (laughing) Right? I mean, they get it. And yet, I can't tell you how many sales people just you know, go for the close and the customers not in the right emotional state. So let's take a look at how the brain works, and this can be revelatory for people because you're a consumer as well, and if you run a company, this is important for how you manage your employees. This was breakthrough for me when I first saw it. And this is called the Triune Theory of the Brain. You can look it up in Daniel Goleman's book on emotional intelligence. A good friend of mine, Dr. Dan Baker wrote a fabulous book called What Happy People Know and What Happy Companies Know. And it really goes into brain science and how we make decisions. So I was excited by this and brought this to the sales world several years ago, 'cause I thought this explains everything that we knew intuitively but didn't have science to back. So that's what's so cool. A lot of times we know things to be true, we just sort of feel it and know it, but when we have science to back it, all of the sudden we go, oh! And it becomes a universal truth and we use it in every aspect of our life. So, now, let me also make a disclaimer, anybody whose watching who is religious, this is scientific theory, it's not religious theory, and so I wanna make that distinction right away. But scientific theory shows, that hundreds of millions of years ago, the first part of the human brain to develop was the reptilian brain. That's the fight or flight portion of the brain. Now, we needed it for survival, right? Because if you're out there in the bush and you see a predator, what's the first thing you're gonna do? You're gonna hopefully flee, right? So we needed it for our survival. If a antelope is in the Savannah and sees it's predator, whose the predator to the antelope? Anybody? A cheetah or a lion? Lion! So it sees a lion, the last thing the antelope does is say, wow, nice mane, who did your mane for you, right? No, it's an automatic, intuitive response, and what happens is that antelope fights, not if it's a smart antelope, it flees. But it's an automatic response. Now, as human beings and all mammals have this reptilian brain. The reason it's called a reptilian brain, by the way, and I'm gonna get my friend Oscar here, just to illustrate. So here's Mr. Reptile, this is Oscar. And he's my buddy, and he reminds me of when I go reptile. But the reptilian brain then is it's an automatic response mode. Now, here's my question. What happens physiologically when we go into reptile mode? Into the fight or flight? Can anybody just tell me what happens when somebody goes into a fight or flight mode? Just go ahead and shout it out. Heart beats faster. Heart beats faster says Felicia. Yeah, what else? Your decision making shuts down. Your decision making shuts down. You've all heard the stories of the woman who all of the sudden gets this super power because there's a baby, her baby's caught under the car, and she can lift this amazing several ton automobile, that's fight or flight. What happens is, all of the blood, leaves our organs, so that we sort of have this super power, and it goes into our muscles. We release cortical, we release adrenaline, so that we can fight off a would be predator okay? Great when you're in the Savannah. You can see where this is going. Now the second part of the brain is the midbrain. The midbrain is our happy place. I love being in the midbrain, midbrains fun. midbrains when you hang out when you're at a rock concert, midbrain is where you are when you're partying with your friends, when you fall in love for the very first time you're in your midbrain, I shouldn't say for the very first time, (laughing) that didn't sound good, did it? As you stay in love. You're in your midbrain, right? It's the happy place, and then you've got the neocortex. The neocortex is the brainy place, that's how we problem solve, that's where you are when you're writing a check, when you're dealing with money, when you're dealing with any kind of complex information, you're in your neocortex. Here's what's interesting, all mammals have these three parts of the brain. Here's where I find it fascinating. Number one, it is physiologically impossible to be in two brains at once. We cannot be in a state of fear and learning simultaneously. Number two, now I want you to sorta take this in, and think of the ramifications. If you've ever been in an environment, a fear-based environment, you've had a boss that keeps you in this fearful, awful state. If you're in a fearful state about your own finances, about your own life, you can't possibly utilize and leverage the smart, resourceful, part of your brain. All we can do when we're in fear are two things, fight or flight. And a lot of times we fight with ourselves. That's where rejection comes in. That's where that negative self talk comes in, and says I'm not good enough, I can't get this out here, I can't charge enough, and we all do it all the time. And if you think for one moment because I'm standing up here that I don't go into reptile, you are sorely mistaken, we all do. And what's interesting, what happens is, because we're releasing these hormones, it actually, that's when your necks all kinked and you've got these aches in your body, what that means is your reptile, right? You're too reptile, that's what we do. So number one, we can't be in two parts of the brain concurrently. The second piece, and this is huge for sales, and why we need a sales process the way we need a sales process, and that is this, it is physiologically impossible to move from the reptilian brain to the neocortex without stopping in the midbrain. I want you to imagine an elevator, and I want you to imagine that the bottom floor of that elevator is reptile, and you wanna get up to the penthouse, which is the neocortex. You've got to stop on the 17th floor, which is the midbrain before you ever get to the penthouse. No connection, no sale. No trust, no sale. No fun, no emotion, no sale. Yet how many sales people, how many of us default into this premature demonstration? We start telling them all about how our product works, and there's no trust, there's no connection. They're not in a good mood. Or, we go through this entire process and then we wing 'em a proposal, they're in their neocortex, everything's good, and then the CTO comes by and says, what? We can't implement that! And they go from the penthouse straight down to the bottom floor into reptile, and you're no longer there to pull 'em out. Fascinating, fascinating implications. When we're doing a training session. If we don't first get somebody, or giving any kind of presentation or a demo, if we don't first get somebody into their mid brain, it is impossible for them to learn or pay attention. So I don't know about you, but I find this to be absolutely fascinating. And what I'd like to do right now, is ask you in the audience if this sort of puts out any flags, and aha's, if you'd like to share those with the home audience or if the home audience would like to talk about any realization when I do this exercise, people usually say, oh my gosh, I never thought of it that way. So does anybody have sort of an aha or realization from this that they would care to share? Lisa, you're nodding your head, and saying yes I do. And Lisa, you do quite a bit of training as well as selling Halstrom Academy. I do, and I live and die by the heart and sell bible. And I think the hard part is that there's a lot of movement with some of these emotional decisions whether it's buying a house or education or a car, not so much the big corporate deals, but I've noticed in those kind of more emotionally driven decisions, the elevators moving a lot. Yes. So they come in, I'll talk from a parent perspective, you know, they come in and their kid just got, you know, kicked outta school, or they were in the principals office again, something was going on, and so they come in and they're a little panicked. And you can tell, I mean it's like, I start off with you know, breath, do you want a glass of water, you're here now, let's talk, and they start to relax, and the elevator goes to the 17th floor. And we stay there for a little bit, and they're, you know, feeling good, and I see them get to that happy place and you kinda softly nudge towards like, great, let's get started tomorrow. Let me go ahead and get the process going, and they get back in the elevator, and they're back to the 17th floor, not necessarily the reptilian, and they're well, but, you know, maybe I should talk to my husband. It is a big decision, you know-- So how do you bring 'em back? How do you change their emotional state and bring it, so you have the distinction. And one of the things that you can do is map out your customers journey, map out what your customer goes through, what are all of the steps that happen when a customer talks to you? And look at what part of the brain they're in all the way through. And it can be very helpful. Yes, definitely. And so what I usually do to bring them back is some techniques I learned in your book is, really to kinda ask them what is it that's kind of giving them that reaction to, I just need to get outta here, I need to go talk to my husband, to my dog, whatever they need to go talk to, and a lot of it is I wanna know, what do you wanna talk to them about? And so I've had to really figure out a way to keep them in the conversation where I'm not selling so much as wanting to understand. Yeah, okay, very good. So yeah, that's what we're gonna shift to right now, is we're going to look at what are ways that we can change the emotional state? And of course yesterday we talked about connecting, and there's three ways I wanna talk about totally changing the emotional state of our client. Now, before I do that, this is why we need a sales process. This is exactly why, because without a sales process, as you said, they're gonna be in their midbrain, they're gonna go to their neocortex, but then they're gonna like, jump off the building! Right? We've all had that happen, where the client just, basically jumps off the building. So again, no matter what you're selling, if we have a process, what happens is, it helps our emotional state. It's not only the client that's going up and down the elevator (laughing). And emotions are contagious. And particularly if you're a leader of a company, or if you're a manager, you wanna establish a sales process for your people. Particularly if you're an artist or an entrepreneur, you're selling something online, you wanna establish a process for yourself in advance. I don't know if any of you have heard of Twyla Tharp, probably one of the greatest dancers and choreographers of all time. I adore her. I love her book on creativity. And in it she talks about her process to prepare herself to dance. And it's intense. And one of the things she says in her books is, if I didn't have a process, I would be a susceptible to external whims and dramas. I love that. Are we susceptible to external whims and dramas? Oh yeah. We got drama in our life, we're in our reptilian brain, and then all of a sudden, we're nervous, we drop the price, or here's a good one, when we don't have a process, we meet a customer and the customer says, hey Katie, yeah, we know about PR firms, just give us a proposal, but we love that one, right? Just give us a proposal, and yet we have no idea what value we can add to them yet. They turn us, our homes, whatever it is we're selling into a commodity. And I gotta tell you, the minute that happens, it is a lose lose. The minute you start haggling over price, nobody wins unless you're Walmart. And they do a very good job of it. Unless you're selling a low priced product, you can't compete on price. Yeah, if you're selling something for 20.99, you know, if you're selling a plastic watch, or you're selling a retail item, but most of the people watching here, they're selling their services. You're selling your heart and soul, you're selling the product that you built from scratch. You're selling a home that is far superior to the competition, not only because of the quality of the home, but because they have choice in their home, and because they're being serviced by a group of professionals that has an amazing culture that will service them after the sale. We have to separate ourselves from the competition. And the only way to do that is if we have a process so that we're not subject to our own whims and dramas. Connect. Ask. Listen. And then link, the link is the demo phase. We don't demo until we've connect, asked, and listened. And if you do, you will be in that horrible place of trying to compete on price. And then we end up writing a lot of practice proposals. You know, and that's a real waste of our time. I can't tell you how many entrepreneurs, they're throwing out proposals, and they don't have a commitment yet. They haven't gone through the steps, they haven't gotten one of those five commitments. So, yesterday, again, we talked about connect, ask and listen, and now that we're going to link, we are in that demo phase. So if you're a photographer, you are showing your work. A dear friend of mine, somebody I'm very close to in Los Angeles, she's a new artist and she's fabulous. She's got great talent. And there was a beautiful, boutique-y hotel that just opened up and she wanted to get in that hotel. And she was so excited, she says, oh I know exactly what I'm gonna show 'em, I know exactly what he needs! How often do we do this? I said to her, well, who is he? Oh I don't know, he's just like a handsome 40-something-year-old. I said, okay, that's a start. She's in her 80's, and she's beautiful. She says I know exactly what he needs. I'm gonna take him these three paintings because I think they'd look great on his wall. I said, why don't you meet him? Find out a little bit about him. Find out what he's trying to accomplish in his hotel. What feeling does he want? How will having these paintings enhance what he's trying to accomplish? Even though he says, show me your art, or give me your price, you have your own sales process. No matter what you sell, call, ask, listen, connect, ask, listen, link, and yes, the acronym is CALL, why? Pick up the damn phone! Stop texting and emailing and thinking you're connecting! The best connecting happens face to face because we release a hormone called oxytocin. It's the feel good hormone. I love Zoom, I love video, Mario talked about it yesterday. It's a good way to open the door, it's a terrible way to close the door. You're not gonna clo-- I mean, again, depending on what you're selling, but you're always better face to face. People can actually smell you. Did you know that? There's pheromones, and when they smell you, if they like the smell (laughing), you're enhancing trust. Which is what connection's all about. No trust, no sale.