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Compiling a reading list? Don’t forget to add some of these insightful titles on the subject of customer experience.

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Seven digital CX books to add to your reading list

Artificial intelligence is set to define the future of banking. Learn about how banks are using machine learning, RPA and other AI-powered tech.

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Six AI technologies set to define the future of banking

Risk mitigation should be a top consideration when selecting an outsourcing partner. Learn what to look for to ensure your brand is protected.

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Protecting your customers and brand in an outsourced environment

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TELUS International, in partnership with Statista, surveyed 250 enterprise leaders to explore where they plan to invest in digital customer experience (CX) technology in 2023. Uncover the results.

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Survey results: Digital customer experience priorities for leaders in 2023

On this episode of TELUS International Studios, we’re joined by a returning guest: Professor Ryan Hamilton of Emory University and the co-author and co-host of The Intuitive Customer, a book and podcast series by the same name. Ryan joined us back in June 2020, where we first discussed the impact of COVID-19 on consumers and brands around the world.

We caught up with Ryan to see what’s changed since then. Tune in to hear us break down his most recent research on the science of decision-making, how cognitive exhaustion has impacted our everyday lives and how the customer journey will be influenced by COVID-19 for years to come.

To learn more about TELUS International and our digital CX solutions, contact us today.

Click here to listen to the previous episode with Professor Ryan Hamilton.

Click here to check out The Intuitive Customer podcast.

Intro: TELUS International Studios where customer experience meets digital transformation.

Patrick Haughey (PH): And you’re welcome back to TELUS International Studios. I’m your host, Patrick Haughey. And on this episode, we are joined by a returning guest. You might remember back in June 2020, we had Professor Ryan Hamilton from Emory University on the series to talk COVID and to predict how it would change things like how we lived, worked, purchased goods, and conducted business. Jump to two years later. We know a lot more about COVID, so we wanted to catch up with Ryan to hear what has changed since we last spoke. Ryan is the co-host of the Intuitive Customer podcast and co-author of the Intuitive Customer Book. Be sure to check out the description of this episode to hear the June 2020 episode as a refresher, and to see where else you can find Ryan and his podcast. But for now, let me reintroduce Professor Ryan Hamilton.

PH: Ryan, we last spoke in June 2020. We were in the midst of the full throes, the early throes of COVID and various lockdowns and everything like that. We had a really interesting conversation at that time. And I’m guessing for an expert in consumer behaviour like yourself and someone who loves the science of decision-making, this must have been a very fascinating period of time to observe.

Ryan Hamilton (RH): Researchers talk about shocks as if they’re a good thing. So economists, especially they want to, they want to look and see what happens during shocks. So that’s a time of transition, a time of change, because you can really tell during disruptions. What is different and how it’s different. And boy has this been a shock. So everything changed and then everything changed back, and then everything changed again. So yeah, we’ve had a series of shocks over this time. It hasn’t been fun to live through, but yeah, from a research perspective, sure, that’s been interesting.

PH: Well, back to the back to the covered part of that, and again, back to something we spoke about a couple of years back before we move on to the present and the future was that is the way that brands, companies, businesses had to speak to their customers during the early days of the pandemic. And dare I say these awful words. We’re all in this together. Ok? We heard it time and time again. Various versions of it during every commercial break and you made a prediction at the time is that this is short-term. We’re going to get back to normal marketing communications more quickly than you might think. Has this happened?

RH: That was one area where I can confidently say, I think I was right. I’m sure we could find lots of things that I said on the show last time that may or may not have panned out. But yeah, that happened real quick. That was a real quick change. And in fact, looking back on it, it’s been interesting how little COVID has affected messaging and communications. Hmm. After that initial change, like even watching ads today, I’ll occasionally see some character in a commercial wearing a mask, but mostly it’s as if the commercials exist in a non-COVID world. And I think that’s understandable. Like, it’s an unpleasant topic. It’s politically fraught. And so I think that advertisers mostly have wanted to just kind of avoid it entirely and project a sense of normalcy. And I think that that resonates with most customer segments. And so brands move in that direction. But yeah, people want to feel normal.

PH: There you go. And so have we snapped back to what normal was in terms of marketing communications before the pandemic? Or again, these awful words, but they just flow naturally. Is there a new normal in relation to that marketing communication?

RH: It’s hard for me to say for sure, because normal changes so rapidly, especially in advertising. Advertising tends to be very trendy. I want to kind of chase whatever the latest is. I will say I’ve noticed kind of a desire for nostalgia. So the Super Bowl recently aired in the United States, which is like the big I call it, the High Holy Day of marketing like this is the most expensive ad day. And there was so much nostalgia in the Super Bowl ads. There’s so much calling back to, you know, celebrities and entertainment properties from the eighties and nineties and kind of reminding people of how things used to be. And again, I don’t want to claim that that’s a direct reaction to COVID because there have been waves of nostalgia go through advertising in the past. But it would be consistent with this idea that we kind of want to feel comforted, that we want to feel normal, that we want to look back on a time that was simpler. So I think that there are new normals that are coming through. How much of it can we claim as a direct result of COVID that I’m less sure of? Yeah.

PH: And of course, you know, that’s where we wrap up the nebulous world of marketing, communications and advertising because it’s so mercurial. However, what we can probably get a bit of our teeth into more firmly is the shift to how customers want to interact with companies and that has become very digital and the digital platforms that have evolved the rise in e-commerce and even in terms of communicating from a customer experience  perspective and where we’ve seen things leap forward very quickly, haven’t we?

RH: Yeah. And it’s been kind of this stagger step, which has been really interesting to me. So obviously, the trends long before COVID was in the direction of digital, more and more people getting more comfortable with digital and doing more transactions online. And then we had this sharp spike where everything was locked down and people were forced to engage with companies digitally, you know, forced to order their groceries online for the first time and all these kinds of things. What’s been interesting? And so, you know, we saw that trend accelerate and all that’s true and all, that’s good. What’s been interesting to me has been the snapback where there was just so much desire to reengage in person. So my own little micro-industry is in higher education and man students were just clamouring to get back to the classroom in person and this idea that once we go digital will never, never go back, that doesn’t seem to have happened. Again, I’m not trying to discount the trends in the direction of digital. It’s obviously much larger than it was pre-pandemic. And once people kind of learn how to do these things, they’ll continue to do them. But people wanted to get back into restaurants. They wanted to go grocery shopping again. They’ve wanted to re-engage in person. And so it was interesting to see kind of that rapid increase and then kind of the rapid snap back. And I think we’re still on a higher trend line than we were pre-COVID, and it’ll continue to increase over time. But it’s also spoken to me about the importance of interpersonal interactions and how much people value that physical experience as well.

PH: Well, is there now, in that case, almost a greater burden on companies because we’ve now not back to the desire for interpersonal. But also has there been an expectation created among consumers of the digital interaction that they do want to have when they choose to have it? So now companies most present provide both in really high quality.

RH: Yes. So customers’ expectations have definitely changed. And I believe that there’s even some, some TELUS International research  suggesting that people have are like kind of over this and expect everybody to have gotten it right by this point. You know, there is some data  showing that people were pretty reasonable in their expectations of companies at the beginning of COVID, like kind of understanding like, “Oh, the world’s in turmoil. I understand if I need to wait an extra three days for this package” that kind of thing that’s not going to last forever didn’t last forever. And so, yeah, now people’s expectations have updated where we expect that their in-person experience is going to be good. We also now expect that the digital experience is going to be good. So yeah, that is a burden on companies where they kind of need. They don’t have as much shade, as much shelter as they used to because we’re no longer in a transition period. We’re now in kind of the new normal and people should be up to speed.

PH: Yeah. Well, look, you know, I think you’ve portrayed very, very clearly that it’s a tricky world when you’re dealing with customers, there’s the segmentation, there’s the, you know, political views, what side you fall on and there’s the kind of wanting the digital and wanting the interpersonal. So can we put a little bit of science on this? Because I know decision-making is something that you have been looking at very closely in the last while and obviously ever every consumer makes a series of decisions. Is there something in maybe tell us about a bit about the research you have been doing and how maybe companies can apply a little bit of science around decision-making to maybe trying to figure out what route they should be going?

RH: Sure. There’s a lot of great theory that we can draw on when we’re trying to figure out how COVID and just kind of related goings on might affect the way people make decisions. There are a couple of big bodies of research that we can draw on. One is related to the effects of just kind of stress and cognitive depletion in general. So we’ve all had to do a lot of emotion regulation, which is cognitively depleting. We’ve had to do a lot of stress management. We’ve had changes in our schedules. All of these things are drawing down on the resources that we have cognitively. And the research tells us that that will tend to make us less good at self-regulation. So in other words, that we won’t have as many resources available for self-control and that can lead to things like cheating on our diet, being unable to adhere to our goals as well emotional outbursts. So unfortunately, you’re seeing a lot of this in the U.S. where people are really snapping at employees. And again, it’s not like everybody’s doing this, but it doesn’t take very many angry shoppers to really ruin a clerk’s day. And unfortunately, that’s happening more, see it in airlines, especially where people are, just are not being well-behaved on airplanes like they used to be. And I think that all of those are just kind of symptoms of this general depletion that we’re having. And so I think that’s one body of research we can look at.

RH: There’s another interesting body of research on existential dread. So, it’s called the terror management paradigm and the idea is that when we’re facing times of great uncertainty, times when death is salient, but also times of disruption. So, you know, economic uncertainty, there’s a lot of talk of potential war. All of these things are destabilizing to us. And psychologically, what we do is we tend to latch on to aspects of our self-concept that extend beyond ourselves. So larger ideas, you know, things about family or church or nation or political affiliation that kind of ground us. And some of that can be very positive. But it can also lead to greater adherence to things like conspiracy theories and things like that because we want to feel like we’re part of something bigger than ourselves. So that’s another. And then the third body of research that I point is to, is just in the general area of distrust. People just don’t trust other people like we did pre-pandemic, and I think that’s affecting a lot of things. I think that there’s a lot of mistrust in institutions that, you know, didn’t start with COVID, but I think has been accelerated by it. So if you want, if you’re a company, I think focusing on trust and building trust with customers is going to be even more important now than it was in the past because of what’s been going on.

PH: And then in relation to those decisions, you know, you talked about you talked about the fatigue that COVID has added for various reasons, emotional reasons. But I read an interesting statistic around your research that the average adult makes more than 35000 decisions every day. And I would imagine at a time in a time of COVID, those decisions are exponentially greater because we’re thinking about our safety, we’re thinking about making choices in relation to do we go there or do we not or how do we behave when we are there and all of these things from a marketing perspective? Is there an onus then on companies now not to be adding to those numbers, those ever-growing numbers of decisions that customers have to make by throwing information at them, by really kind of giving them too much information in order to make a decision about buying their product? Do they have to go a different direction now?

RH: Sure. If you ask people, they will always tell you that they want more information and that they want more options. Empirically, though, if you look at the way that people make decisions, it is really easy to overwhelm people. It’s very easy for us to get too much information and then just kind of walk away from it or slip into an easier mode of decision-making where we just don’t engage. And so, yeah, smart firms will make things easier on people to the extent that they can, and it’s acknowledging that everybody’s in kind of a depleted state and is going to be looking for things to be easier. Firms that can allow customers to make decisions in an easier way, particularly if it’s an easier way that doesn’t actually limit their real choices. So if I can present you with a set of options and say, go ahead, pick one, or if I can present you with a set of options and allow you kind of a decision tree to very easily find which of these options is the best for you. I’ve just reduced the burden on you as a consumer without taking away your freedom of choice, and consumers tend to really respond well to that. We don’t like being restricted. We don’t like people telling us that we can’t choose something we want to, but we also get overwhelmed very easily. And so to the extent that companies are able to respect the cognitive limits that are placed on consumers now and this kind of difficult time, then the better position they’ll be in to serve those customers well.

PH: And I’m going to ask you for an example of this. And if you don’t have one to hand, that’s fine. We’ll move on. But based on what you just said, are there any companies or and you don’t even have to name the names, but an example of someone doing this right who has reacted to the current challenges and is doing it well?

RH: So this isn’t related to the current challenge I can see. I can think of a more recent example, but there are companies that have done this well for a long time. So there’s kind of a trivial example that I like to use is there’s a soda fountain machine called the Coca-Cola Freestyle, where you know, they’re in a lot of movie theatres in the U.S. and in restaurants where you can select any soda that Coca-Cola makes, right? And so there’s hundreds of different options in this soda machine, and then you can combine flavours, too. So there’s literally millions of. Different drink combinations that you can have there instead of just giving you a menu of hundreds of options. Coca-Cola gives you a decision tree on this touch screen. And so it’s like, do you want a fruit flavoured drink or do you want a cola or do you want to diet? And I think there’s one more. So you choose one of those and then it brings up another, you know, set of options that’s six or seven different brands within that category. And there’s another set of options and then now you’re at the drink. So you make three simple decisions instead of having to endlessly scroll through. So I do think that it’s more important than it’s been in the past because people have fewer resources to devote to it and firms that are good at respecting people’s freedom of choice and then making that choice as easy as they can. I think that’ll be beneficial to them.

PH: Ok. Just before we leave the decision-making part and just wrap up. I wanted to switch just your thoughts in relation to decision-making and the burdens you’ve just described from the consumer to the employee. So the company is, you know, the challenges within their own companies now, forget about the customers for a moment, but within their own companies, what are we seeing in relation to the burden that you’ve just described in relation to decision-making during COVID?

RH: Oh, I’m so glad you asked because I’ve been trying to preach this for a long time where, you know, I’m a consumer behaviour researcher, I’m a consumer psychologist, but there’s no like special part of psychology that exists in our brains for consumption choices. All there is, is just psychology. It’s just this is the way our mind works. And so many firms will focus on what can we do to improve our customer experience? And then just absolutely abuse their employees and, you know, ignore that those are also people and they are operating under the same psychology. And so, yeah, all the tools that we apply to make our customers like us more. Those same tools are available to us to try to understand our own employees and improve their lives and improve the loyalty that they have to us. So, yeah, I think that there’s huge opportunities there to improve the lives of our employees. We’re in the midst of this great resignation, this recalibration of the relationship between labour and management and especially in the U.S., I think it’s empirically long overdue. If you look at wage stagnation in the U.S., but it’s more than about just wages. You know, the prevailing theory now is that a lot of the great resignation that’s going on is people just reevaluating their lives and recognizing that there’s more to life than just working. And so to the extent that employers don’t make adjustments, they are going to continue to struggle and they’re going to start losing out to employers who do respect the humanity of their employees a little bit more and recognize that there’s a lot of non-financial ways that they can improve the lives of their employees. In addition to the financial ways that they can. So yeah, you can nudge your employees just as well as you can nudge your customers. And I think that there’s enormous benefit to be had to companies who respect that and get ahead of it because I think that’s the direction that we’ll all be forced into. And boy, if you can get ahead of that curve, I think that that would be great.

PH: But what you’re saying is that the same psychological principles apply to how you’ve been approaching your customer segmentation, et cetera, for years and years. You can simply turn that inwards and have some positive results.

RH: Absolutely. Yeah. And I love the idea of segmenting your employees or segmenting the employee marketplace and recognizing, like, “Oh, this is our target employee and it’s a person with this set of, kind of, needs and experiences.” But if you do that well, then it’s not just these are the people who can do the job. We now understand these people. And so in addition to their being able to do the job for us, we can now uniquely offer them benefits because we understand them that again, maybe nonfinancial, but that will make them kind of uniquely happy and therefore, loyal to us and willing to do a better job and willing to recruit other people like them, like all of those kinds of benefits. Everything we do on the consumer side, there’s the opportunity to do that on the employer side, too. We can improve our customer experience. We can improve our employee experience too in ways that can financially benefit the firm. So, yeah, it should be a win-win.

PH: And just finally on this, do we actually have are there statistics or any kind of research in relation to how the cognitive exhaustion of COVID has impacted buying habits across industries like tech, for example?

RH: So I’m not aware of any stats yet. There’s usually lag by several years when we can actually get the data and start to analyse it. Sure. But you can see kind of microtrends. So one of the big indicators that suggest that this is happening is kind of a move towards entertainment and relaxation and kind of recuperation types of technology where you know, to the point you were raising earlier, people just want things to be easier or are they really valuing technology and products and services that allow them to recuperate from the stresses that they’re seeing? You know, in the early days of COVID, you saw a lot of movement towards hobbies, and that might be seen as one reaction to this. Suddenly, you know, we’re all terrified and we’ve got time on our hands. Let’s occupy ourselves doing something productive so that that can help. And I’ll be interested to see how that hobby trend continues as people move back into kind of work and normal life. If they see that that is a valuable part of their lives that they want to continue to take advantage of, or if that was more of, kind of, a temporary need that was fulfilled. But yeah, so things that help us recover, things that help us make our lives easier, things that are distractions, games, entertainment, those kinds of things would all be consistent with this idea that we’re exhausted and we need a break.

PH: Yeah, that’s really interesting. And again, one, we have to catch up in 18 months again and see what played out. This is, this could go on for years, Ryan. This is really interesting stuff and just a couple of final quick questions. Are there some examples of changes that companies have made for their customers over the last couple of years that sort of started out as short-term solutions, but then transformed into long-term solutions that changed how we spend our time and money.

RH: So I’ll try to give you some specific examples if I can come up with them. But in general, I think that the biggest change that successful companies have made has been in terms of flexibility. So if you look at, I was looking at in preparation for a talk, I was looking at retail sales in the U.S. over the last five years and it was very flat. It would bump around a little bit. And then, you know, the COVID pandemic hit and everything was locked down and it dropped off a cliff. And then there was the initial wave of openings and it shot way back up. But it didn’t settle back down, so the story since that initial shock has been one of volatility where, you know, I assume in response to kind of local conditions and shutting down and opening up, but there’s continued to be these large changes in retail spending from month to month. Based on the changes in the ground. And so I think that firms that are successful have made changes in order to be more nimble and to recognize that they’re going to need to be able to respond more quickly to changes. I think one specific area where retailers are, where companies have started to do this well, those that survived, is in the restaurant space. So obviously restaurant business model has been the same for thousands of years. Then now, all of a sudden, we can’t meet together in person. And so the restaurant model changes completely. And those that have, you know, sadly, a lot of restaurants did not survive that, the pandemic. But those that have survived have changed rapidly in ways that meet the needs of their customers right away. So in some cases, it’s a lot more outdoor dining. In some cases, it was a lot more kind of delivery on demand through DoorDash and these other services. I think that firms that recognize that nothing is as stable as it used to be, and so are we equipped to handle whatever is coming next and to change rapidly? I think those are the firms that are going to continue to do well.

PH: And what has been fascinating is the firms that have started up in order to plug into that need for agility. And we’ve seen almost a whole other segment of companies that are there to facilitate flexibility.

RH: Absolutely, absolutely. Yeah. Where we’ve started to see problems is where firms pivot rapidly. But expect, then, that the new direction is permanent as opposed to the new normal is change, at least for a period of time. And so they made a number of long-term bets based on an assumption about the way the marketplace is going to be permanently. And now that’s really coming around to bite them. Whereas, you know, if I look at the local restaurant down the street from me, they did not make these kind of permanent long term bets, but instead, you know, made themselves leaner and more nimble and able to roll with things and are doing surprisingly well in response to that.

PH: Yeah. So don’t pivot. Just remain agile.

RH: Yeah, agility will be the key for the next several years.

PH: Ok. And Ryan, finally, in anticipation for our third interview in around two years’ time, it’s predictions time. You know, you’ve given a good insight into some of the trends and where things are going. So just if you’d like to leave us with one or two, maybe predictions of things that we should be watching out for in the next couple of years that business leaders that the managers and team leaders should maybe be aware of or maybe on the watch out for.

RH: So Yogi Berra, who is a baseball player who said a lot of crazy things, had a famous quote where he said predictions are difficult, especially about the future. And that’s where I come in any time I’ve tried to lock down on predicting the future. My best guesses are, we’re going to see more of the business fundamentals change in the next few years than we have seen change in the last 40 or 50. You know, the lessons from previous pandemics seem to be that large societal changes happen in the years after pandemics, more so than during the pandemics themselves. We’re all just kind of scrambling to survive during the pandemics. But you know, researchers have pointed to changes as basic as like architecture. The way that we structure houses were really influenced based on or we’re really influenced by waves of disease and how people responded to that. You know, hand-washing was not a thing really until, you know, a couple of hundred years ago when people realized that we needed to respond to some of these disease outbreaks. So we’re not done with COVID, we’re starting now. And so I wish I could be more specific as to the direction of those changes. But those changes are coming and probably starting in the next few years rather than ending in the next few years.

RH: Among these other kind of big fundamental changes, I think that the relationship with labour is going to is just starting its kind of readjustment. So whether it will continue to be a big wave of resignations that just continue to roll throughout or whether it’ll be just kind of a more permanent adjustment in the power balance between management and labour? Again, I wish I could. I could say for sure, but I don’t see that going away quickly. And then the third one, I think, is supply chains. So we’ve had, you know, leaner and leaner supply chains, and we all understand the reasons for that and the advantages from it. But we also saw some of the major drawbacks to that. And so I do think there will be kind of that push towards more redundancy and slowing down of these supply chains in order to build resiliency because I don’t think the changes are going to be done. I think we’re going to continue to see increased volatility on a lot of different fronts for at least the next several years. And that’s going to cause some, some really big. I mean, academically exciting changes, whether they’re exciting as we all lived through them will be less clear. But yeah, well, change will be the call word.

PH: And it points back to, you’re saying that it’s the people who are agile, it’s the companies that are agile or who are going to survive and thrive. But also finally, from a psychological perspective, it’s the people with flexible psychology or who can adapt to certain scenarios very quickly from a psychological perspective that are going to be the best new leaders, the best new managers, as as well as having the empathy that you need to see people through those changes.

RH: Absolutely. Yeah, it feels hypocritical of me to say this being very physically not agile. But yeah, we should all develop our agility.

PH: Well, keep going to the gym and that will change very quickly, Ryan. Professor Ryan Hamilton, thank you so much for joining us TELUS International studios today. It’s been fascinating.

PH: And thank you very much for joining us on this episode of TELUS International Studios, I hope you enjoyed that interview with Ryan Hamilton. If you did and you think other people should hear it, please share this episode with a friend or a colleague. Hit Subscribe if you’re listening on Apple Podcasts or follow if you’re listening on Spotify and while you’re there, please give us a review and a rating. It really helps us get the episode out to more people just like you. And of course, if you would like to find out more about TELUS International and the global and disruptive brands with whom we work. Check out telusinternational.com, and until the next episode. Take care.

On this episode, we’re joined by a returning guest: Professor Ryan Hamilton of Emory University and the co-author and co-host of The Intuitive Customer, a book and podcast series by the same name. Tune in to hear us break down his most recent research on the science of decision-making, how cognitive exhaustion has impacted our everyday lives and how the customer journey will be influenced by COVID-19 for years to come.

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Customer experience analyst and best-selling author, Matt Dixon, sits down with TELUS International Studios to share insights from his new book, The JOLT Effect: How High Performers Overcome Customer Indecision. Dixon takes us through the bane of every salesperson’s existence: a long customer courtship that ends with an “I’ll think about it.”

Leveraging a first-of-its-kind study that analyzed 2.5 million documented sales conversations through machine learning, Dixon reveals that 56% of sales loss is actually caused by customer indecisiveness. Listen to the episode to gain more sales growth best practices to overcome indecision.

The JOLT Effect: How high performers overcome customer indecision is available for pre-order now.

Intro: TELUS International Studios, where customer experience meets digital transformation.

Patrick Haughey (PH): And you are very welcome back to TELUS international studios. I’m your host Patrick Haughey, and on this episode I am delighted to be joined by someone who I’ve had the pleasure of speaking with at a few TELUS International events over the last couple of years. Matt Dixon is a CX and sales expert, he has written many best-selling books — one of the best known is The Effortless Experience, but he’s joining us on this episode to talk about his newest book, currently available for pre-order. It’s called The JOLT Effect: How High Performers Overcome Customer Indecision. To prepare for this book, 2.5 million documented sales conversations were studied using machine learning. So get ready to hear some very interesting insights from this first of its kind study. So I thought an interesting jumping off point with Matt might be a line that jumped out at me from the book’s description when I was reading it. And that line reads: “In sales, the worst thing you can hear from a customer isn’t ‘No,’  it is ‘I need to think about it.’ And I started by asking Matt why this is.

Matt Dixon (MD): Yeah, it’s a great question. That’s the beginning of the whole tale. And I love that line, too. Well, I don’t love it: I hate it — it’s terrible, it’s really bad news actually, for sales people. But it speaks to what the whole story is about. You know, I think if I’ve been out there engaged with sales people, I know, obviously, Patrick, you and I have spent a lot of time talking about customer experience, customer service, the effortless experience, etc. The other hat I’ve worn as a researcher is really focused on business to business sales and commercial effectiveness, and how is buying behavior evolving and so on and so forth. And one of the things I’ve been struck by over the years is that when you ask a roomful of salespeople to think about the deals they’ve lost over the past quarter or the past year perhaps, and you ask them to categorize that into two different buckets. On the one hand, deals you lost to a named competitor. So the customer ends up buying but they didn’t buy from you, they bought from somebody else. Versus customers where you lost, but you didn’t lose to a competitor, you lost to no decision — you lost to the customer doing nothing. What you find is, in organization after organization, by far more hands go up around the latter, that salespeople feel like they’re much more likely to lose to the customer doing nothing than buying from a competitor or, as you said, even just saying no.

MD: In fact, I think sometimes in sales we can feel like our sales people are heavily influenced by the last sales call they had, you know the product is too expensive, this competitor is eating our lunch, whatever it is. But in this case, our salespeople are actually onto something. We studied this with data and we’ll talk more about the research that went into the book, but I’ll pull forward one finding, which is that anywhere between 40 and 60% of all deals are actually lost to no decision, to the customer doing nothing. And we studied this across 2.5 million sales conversations. We used machine learning to study it. And what we found is exactly what you said. If you look at all of the I would say hundreds of thousands of things that are said in sales conversations, both on the salesperson side and the customer side, by far in our analysis, the worst thing that can be uttered by the customer is I need to think about it. And the reason it’s so bad is that, you know, the old adage in sales has long been that as a salesperson, you don’t want to you don’t want to chase garbage trucks, right? You don’t want to pursue opportunities that have no chance of closing. So in many respects, for a salesperson, it’s far preferable — it may be painful — but far preferable to be told no. The worst outcome is where you go through the entire sales process with the customer. For many companies that can be months or even years, and think about all the resources, the time investment from the salesperson side, the resources from their organization, not to mention all the resources from the customer side. These are customers who go through the demo, they go through multiple iterations of the proposal, they talk to your reference clients, they talk to your subject matter experts, you talk to all of the sales prevention departments inside the customer organization like legal, finance, procurement, etc., only for the customer to get cold feet late in the game and end up doing nothing. And so that is such a deadweight loss for the average salesperson, for sales managers and teams and for entire sales organizations. We do think that how to overcome that ‘no decision’ phenomenon, how to break through and pull more deals across the finish line is the thing that separates great sales organizations and great salespeople from the rest.

PH: We’re going to come to those traits of a great salesperson who can manage to overcome the hurdle in a few minutes’ time, because it’s a fascinating area. We’re looking at something very psychological here called omission bias. Is that right? Which you cover a little bit in the book. Just briefly explain what omission bias is and what kind of mistakes customers are looking to avoid.

MD: Yeah, perfect. So I think the conventional wisdom in sales has always been that if the salesperson starts to get cold feet, if they start to backpedal, wring their hands a bit, waver, waffle, straddle the fence, whatever term you want to use, that it must be that we’ve not we haven’t put to rest the status quo, because we all know, even as human beings, we are predisposed to stay the course. We’ll pass up on better options just for no other reason than we’re lazy and we don’t like to change. And for salespeople, that’s a really powerful obstacle. But I think salespeople have always been taught that that is your only enemy in sales. And what we found was that in our analysis of 2.5 million sales conversations, when this customer starts to show signs of hesitancy, when they start to show those signs of cold feet, by far, three-quarters of salespeople we found go back and they kind of hammer the status quo. They either try to re-convince the customer that ‘you must not really understand the value that our solution is going to deliver.’ ‘You must not really understand how wonderful it is, the ROI projections and how amazing things are going to be on the other side.’ Or, when the customer doesn’t respond to that, what do we do? We put away the carrot and we break out the stick. And what we try to do is show the customer the cost of inaction. And we do that by dialing up what’s called FUD in sales: fear, uncertainty and doubt.

And what we’re really trying to do is make the customer squirm a bit, make them feel the pain of what they’re going to miss out on if they don’t if they don’t buy the solution. We actually found in the analysis, surprisingly, is that that approach, while it’s commonly practiced, actually makes it 84% less likely you’re going to get the customer out of no decision. So you actually increase the odds of the customer doing nothing by using some of those tactics designed to beat the status quo. And to your question, what we actually found, we realized that we wrestled with this quite a bit because it’s been the conventional wisdom in sales for a very long time. In fact, we wrote about this in the Challenger Sale that the best salespeople are gifted at showing the customer that the “pain of same,” the pain of the status quo is actually worse than the pain of change. And that is one of the things they do really well. And so it came as a big surprise to us that that strategy, that approach backfires so often. And so we took a step back and what we realized was we were asking the wrong question. The question that we were asking was, what’s the best way to beat the status quo? Maybe it’s just not being done well. Maybe high performers have figured out a different technique that’s really effective today. But the question we should have been asking is a bit different, which is not how do we beat the status quo, but rather why do customers make no decision? And it turns out the reason they make no decision is exactly what you talked about, Patrick, actually if you look at the psychology research and this is actually backed up in our own analysis, that there are really two reasons the customer will choose to do nothing. The first reason is that they’re committed to their status quo, they just prefer the status quo. It could be that they don’t believe your solution is superior to what they do today or they may just believe it’s superior, but they believe their current approach is good enough. Right? ‘It’s just not worth it for us to change.’ But there’s a second reason that the customer will choose to do nothing. It’s not commitment to the status quo, it’s indecisiveness about changing the status quo. And I think when people hear that, what they immediately ask is, how are those two things different? You’re telling me that customers choose to do nothing either because they prefer what they do today or because they don’t want to change what they do today. And what we explain in the research is that those two things are massively different. And it’s something that high performers get an average performance don’t.

MD: So if we go to the psychology research, what we find is that there are really two types of loss that people in our customers are worried about. On the one hand, there are what are called errors of omission, which are mistakes and losses that we incur because we choose to do nothing. One of the old stories to illustrate is you’re in a tennis tournament and your competitor has a peanut allergy and you sit down to enjoy a lunch before your match and you know there’s something on the menu that has peanuts in it. The omission bias is when your competitor orders the dish that has peanuts in it and you don’t say anything about it. And so they get sick and they have to drop out and you win. The opposite is an error of commission. Now, an order of commission is when you incur a loss because of something you did, not because you failed to do something right, but because you actually did something wrong. So the same metaphor uses you’re sitting across the table from your tennis competitor and you proactively suggest they order the thing that has peanuts in it because you want them to get sick. Now, with those two scenarios, the outcome is exactly the same, your competitor has gotten sick and had to be rushed to hospital, etc. But by and large, everyone was more comfortable with the first one because I didn’t have anything to do with it. The second one is ‘a thing I did.’ ‘I did something wrong.’ And what we find with customers is that when they’re facing two different options, whenever something could go wrong by me not choosing to buy your solution, we could not capitalize on an opportunity, or I could buy your solution, and then something bad could happen as a result, they will choose to do nothing far more often than they’ll choose to do something and run the risk of getting something wrong. Now, the three types of things they’re worried about getting wrong are:

MD: One, I picked the wrong option. We think about all the options we put in front of our customers. So often they start to wring their hands about, ‘I’m not sure if I’m picking the right contract length’ or the right scope of the agreement or ‘I’m buying the premium version — should I really just buy the basic version?’

MD: The second thing is they start to worry that they haven’t done enough research and think about all the content out there about every vertical, every technology out there. And they start to fret over the fact that it’s the next white paper that they would consume that will have all the answers that they need to be a smart consumer.

MD: The third source of indecision is what we call outcome uncertainty. This is where the customer, before they sign on the dotted line, starts to worry that they don’t have any assurance that they’re going to get the benefits they’re paying for. And despite your rosy ROI projections, despite the great demos and proof of concept trials you did, despite the wonderful reference calls and the great analyst reports they read about your company, the customer is worried that they might be the one company for whom this whole thing goes sideways and if that happens, somebody’s head is going to roll. And the person who is going to roll first is the person whose name is on the contract.

MD: So those three things: I’m picking the wrong option, I didn’t do enough homework, or I’m going to be left holding the bag (if you will) and not getting what I’m paying for, are the sources of indecision, which interestingly have nothing to do with the customer’s preference for the status quo. And so it helps explain why we see this phenomenon that salespeople who are taught that every indecisive customer, every waffling and wavering customer with cold feet, must be struggling with a preference for the status quo. So you go back and, you know, your ‘beat the status quo playbook’ is like a hammer, every indecisive customer looks like a nail. But in fact, if they’re worried about something else, then going back and trying to convince them of the loss that might result from inaction only gives them more to be worried about when they’re actually worried about something quite different. So we found in the research that high performers have figured out a different playbook, a companion playbook not just for beating the status quo, but for laying to rest or overcoming these sources of customer indecision.

PH: And does this take us to the JOLT effect?

MD: Absolutely, yeah. So what we found is, there’s again, there’s two playbooks. We’ve all got ‘the beat the status quo’ playbook. We wrote a book about challenger selling; we happen to think being a challenger is one of the best ways to beat the status quo. But as I said before, it’s only part of the story. If beating the status quo is all about showing the customer the cost of inaction, overcoming indecision is getting them more comfortable with the action you’re asking them to take, making them feel like you’re making a good choice, don’t worry about the other options, you’re picking the right thing. You’ve done enough research, you’re in good hands. I’m your subject matter expert, your trusted advisor, and don’t worry, you’re not jumping out of a plane without a parachute. There are some assurances we can give you that this is going to actually work out well for your organization, etc. So if the beat the status quo playbook is about dialing up the fear of not purchasing with the customer, then the playbook for overcoming indecision is about dialing down the fear of purchasing, right? It’s making the customer more confident and comfortable in the decision you’re asking them to make, which they are quite anxious about, right. I didn’t do enough homework. I’m picking the wrong thing. I don’t have any assurance this is going to work out for me. And so JOLT is a set of four behaviors, and I’ll just explain what they are really quickly, that together form this playbook for overcoming indecision:

MD: The J is judging the level of indecision. And what we found is that high performers are quite good not just at assessing opportunities and customers on their ability to buy their solution, but also on their ability to make a decision. So not just the ability to buy, but the ability to decide. And they do that through active listening, probing questions, and powerful requests they make that elicit responses from the customer that tell them, ‘Is this person somebody who can actually make a decision and do so in a reasonable amount of time?’

MD: The O: offer your recommendation. So salespeople have been taught for a very, very long time that it’s all about diagnosing the customer’s needs, understanding what they want. And the hope is that by asking good questions, the customer will figure out on their own what they really want or what they need. But what high performers know is there’s a time for asking and letting 1000 flowers bloom, and then there’s a time for telling and making a recommendation, because with too many options on the table, the customer again will get wrapped around the axle about what they should choose and they’ll fear I’m going to choose the wrong thing, and that will become an irreversible decision.

MD: The L is limiting the exploration. So in a world where customers want to continue to consume content, they always feel like they’re not enough of an expert on the technology or on the platform or on the competitive landscape or on the decision they’re being asked to make. They will consume information endlessly, and there’s no way that they could possibly develop the level of expertise that we as salespeople have. And so we’ve got to put a limit to their exploration, and the way we do that is we’ve got to earn the trust, the trust and credibility, if you will, the customers trust, and we’ve got to establish our credibility as trusted subject matter experts who have the customer’s best interests in mind, and that we can guide them through this learning journey and that they don’t need to consume all the content because we’ve already done that. And we are their trusted advisor.

MD: And then finally the T: this is about taking risk off the table. So when our customer’s hand is hovering over the contract and they’re worried: ‘boy, this is a really big investment, it’s a really big decision for our organization and what if this goes sideways on us?’ We’ve got to provide some assurance that we’ve got their back, that things are going to go fine. And sometimes it comes down to additional professional services support, not that we give it away for free, but proactively suggesting that starting smaller, getting the customer to not bite off more than you can chew, or creative contract structuring that gets us in a place where the customer feels like they’ve got a safety net if things start to slide, if they start to go sideways. So that is the JOLT Effect. And we like it because it’s memorable, but it also speaks to what’s happening here, right? It’s about jolting our customers out of their indecisive state toward action.

PH: It’s really, really interesting. And actually everything you’re talking about there, there’s a couple of words that are shining through to me, which are customer success, it’s not just ‘make the sale and that’s it.’ It’s not a new area, but it’s certainly been more in focus in the last few years that we come out the other side of the funnel with a whole new funnel, which is making sure that the product is used properly, that we keep we keep them educated, that we’re there for them. Is there an element of this in all of that?

MD: 100%. We talk about actually in that T chapter, taking risk off the table, that one of the best things that that salespeople can do is pull forward some of those customer success engagements, laying out the roadmap for how we’re going to work together, the project plan, here are the key milestones, here are the metrics. Let’s get the quarterly business review meeting set up now, let’s get all of this lined up because we know from working with companies who get a ton of value out of our solution, this is the roadmap for success. So it sends the customer the impression that you’ve done this before. You know where the pitfalls are, you know where the landmines are, you’re going to start thinking one step ahead and you’re going to make sure that we’re going to end up in a good spot — this is a huge confidence giver for the customer.

PH:  And on that note, and again, in relation to customer success, is that the area where a lot of this is about the sale and the salesperson, but when it comes to CX professionals, customer experience professionals, what are the lessons here as well?

MD: Yeah, for others who support the sales organization, whether that’s marketing, it’s customer success, I think understanding that when our customers start to waver, it is more often than not, in fact, I didn’t mention this before, but what we found is if you divvy up losses to no decision by losses to the status quo versus losses to indecision, you find that indecision actually encompasses more of those losses. 56% of the losses are because the customer is indecisive, it’s not because they’re in love with the way they do things today. And for all of us in the organization to understand the sources of that indecision so that we can work together to get our customers over the hump and get them across the finish line, again, whether that’s customer success, articulating the plan to work together, even proactively introducing you to your customer success team members, and maybe sharing roadmaps and project plans that have been successful with other clients and talking openly about the risks and the pitfalls and the landmines you want to avoid. Or it’s marketing perhaps, figuring out what are, what are the configurations that we should pre-package into, kind of, if you will, “Happy Meals,” because we know when customers buy this configuration, they’re really, really happy. So let’s package those up, let’s market around those and let’s train our sales people to actually advocate for those solutions because we know when people buy it that way or buy that configuration, they’re much more happy with the results. Or lastly, it might be finance, it might be thinking about some of those ways to do creative contract structuring, terms and conditions that provide that assurance to the customer, instead of making salespeople go and ask for permission every single time they want to grant an exception or flex a term or condition in a contract.

PH:  It feels like everything we watched and learned from Glengarry Glen Ross ‘always be closing’ is actually wrong. It’s turned on its head, Matt.

MD: Although I will say I will say Alec Baldwin did have a point. You do want to get the customer to sign on the line, which is dotted.

PH:  Just a couple of final questions, Matt. Are these same techniques that we’ve just talked about, do they apply to securing contract renewals with existing customers?

MD: Yeah, it’s a great question, Patrick. Actually, I was reminded of this recently. My co-author, Ted McKenna, who did a lot of the data analysis, reminded me that we actually did have a fair number of account managers in the sample. And so some of these behaviors about gauging indecision, offering recommendations, limiting exploration, taking risk off the table, matter as much to existing customers as they do to new customers. Now, some of those things I think might matter to different degrees. So offering recommendations, think about when the account manager is often in the position to have to not just renew the contract, but to introduce cross-sell and upsell opportunities, or ideas, new integrations, expansion. It is in many companies today ‘land and expand’ is the motion of sales. And so the account manager is the one leading the expansion charge, which is very much a sales motion. So guiding the customer, making a recommendation and also building credibility and trust by telling them what they shouldn’t buy. I know you want to go over here, but I actually don’t know that that’s the best fit for our solution. Where, you know what, in an extreme world, I know you’re looking for us to help you here. We’re honored that you turned to us, but this is actually not what we’re good at, it’s actually a competitor of ours, I know people over there, and I’d be happy to put you in touch. So these kinds of conversations can be huge credibility builders, because, again, our customer is not just going to going to feel indecision when they’re weighing the purchase, they’re going to feel indecision when they’re weighing a bigger contract next time around or renewing for a number of years, right, which is very much the job of the account manager, that indecision will creep up in any, in either scenario, I should say.

PH:  Finally, what’s made this book possible and what has allowed you to maybe turn some of the perceived wisdom around sales kind of on its head in a lot of ways is rich data, which, ironically, COVID-19, allowed you to collect.

MD: That’s right. That’s right. Yeah. I think right around the time that everyone was watching Tiger King and learning to make sourdough bread, I think what Ted and I realized was there was this golden and maybe once in a lifetime opportunity as sales researchers, which was to study sales in a truly ethnographic way, which is to go where the rubber hits the road, the actual sales conversation. And what made that possible is when the entire world of sales went virtual overnight in March or April of 2020. And so we worked with several dozen companies to, if you will, harvest 2.5 million recorded sales conversations, then use a machine learning platform to do the analysis. And so it was, again, I don’t know that we’ll ever be afforded the same opportunity, I think some sales will start to go back to live in the future, so this may be a one-time thing, but I think virtual is still going to be a big chunk of the way we sell moving forward. Customers like it, it brings some efficiencies to the sales organization, the sales person. It’s better work-life balance for our sales people and they don’t have to fly around on planes all the time, not to mention better for the environment. So it was a really exciting initiative and maybe a once in a lifetime thing, but it was this fantastic, I think, once in a lifetime opportunity for us as sales researchers to study sales in this completely new way. We were very much inspired by Neil Rackham’s work when he wrote Spin Selling, and he and his team spent 10 years physically sitting in on 35,000 sales calls and it never occurred to us that anything like that could ever be accomplished again until COVID-19 happened, and suddenly, now there we go.

PH:  Well, it’s fantastic. So where can people find more information and pre-order and buy the book?

MD: Yeah, sure. The book is coming out from Penguin Random House on September 20. The Jolt Effect: How High Performers Overcome Customer Indecision. So you can find it listed on the Penguin Random House site as well as everywhere where fine books are sold. And you can go to www.jolteffect.com and get more information there. We’ll be releasing bonus content, we have a pre-order offer out there for people who buy early, send us their receipt at preorders@jolteffect.com and we’ll sign you up for a virtual event in September that we’ll be running. And we’d love to host all of your listeners at that event.

PH:  Matt Dixon, a pleasure as always. Thanks so much for joining us on TELUS International Studios.

PH:  And a very big thanks to Matt Dixon for such a fascinating conversation. But it’s only a taste of what’s in Matt’s book, so please do check out the links we leave in the show notes here and purchase a copy for yourself. Thanks again for listening to another episode of TELUS International Studios and I hope you can join us for the next one coming soon.

Professor Ryan Hamilton on COVID-19 consumer decision-making (two years later)

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