Buyer psychology is the study of why people make the decision to agree to something or buy something. Understanding this psychology could improve your success at negotiations and mediations because you’re essentially selling your client’s position to the other party, trying to convince that party it’s in their interest too and they should sign on the dotted line. There are also times when you also need to sell your advice to your own client as well.
That other party and your client will be one of three types of buyers, according to an article in Neuromarketing: the tightwad, the spendthrift and the average spender.
Buyer Psychology Can Help
They love saving and hate spending. They will hold onto their money for as long as they can. They spend less and save more than the average person. They make up nearly a quarter of the population.
Tightwads anticipate pain when they spend and respond by not buying. Tightwads feel “buyer’s remorse” before they buy and they anticipate this pain much more acutely than most. Their decisions are controlled by the amount that they think a product should cost which is normally skewed low in keeping with the budget-sensitive nature of the tightwad. Tightwads are planners and budgeters.
Selling to a Tightwad:
- It must be within his or her budget.
- Sell using negative emotional signals, not positive or indulgent ones. Don’t use “You deserve” or “this is the best for you” but instead, use “Losing money hurts” or “Secure the best future for your family.”
- Talk about what could be lost if an agreement isn’t reached.
- They will respond to the benefits of your proposal more than an emotional appeal.
- Use numbers, data, charts and metrics. The decision-making process is analytical, precise and straightforward. Address this analytical style of thinking with honest claims, detailed numbers and well-researched information.
They love spending money because it’s meant to be spent. They are the impulse buyers marketers love. They feel no “buyer’s remorse.” The more they spend the better they feel. Just thinking about spending makes them feel good. They don’t plan or have a budget. They don’t pay attention to prices or feel “sticker shock.”
How to sell to a Spendthrift:
- They will respond to emotions. There is no analytical processing and they will act from the heart.
- They will respond to pictures and colors, if you can make them part of your presentation. Color psychology plays an important role in the behavior of spendthrifts.
Most of us fall between these two extremes and spend what and when we think it’s appropriate. We think about purchases, weigh options, take time to decide, try to make smart decisions and save a little money. They have a rough idea of what they can afford and on occasion impulse or over buy.
How to sell to the Average Spender:
- Average buyers are smart, but they share in small amounts some of the characteristics of the Tightwad and the Spendthrift.
- They respond to a mix of emotion-driven and fact-driven messages so use both.
- They like guarantees, returns, warranties and free shipping. If possible add something extra to your proposal, a little bit of an unexpected concession or a little more compensation for one thing in dispute. A little icing on the cake may result in a done deal.
You need to sell settlement to the other party and possibly your own client. Based on your experiences with your client and what your client tells you about the other party (and also how that party has behaved during the litigation or prior settlement attempts) you should have an idea what kind of buyers both parties are. Use that knowledge to tailor your message to increase the likelihood of negotiation and mediation success.