The Affect Heuristic and Your SaaS Demo

The Affect Heuristic and Your SaaS Demo explains why according to science, it’s more important to be liked than it is to be the best

We’re big fans of Thinking Fast and Slow around these parts, and much of our work is guided by behavioral economics. After all, understanding how people think, no matter how irrational their thinking may be, is key to making connections with your audiences.

Cognitive biases, discussed in detail in the book, guide how we make decisions. Author Daniel Khaneman, along with his partner, the late Amos Tversky, are the creators of Prospect Theory, which, among other things, is about how people react when making decisions between potential gains and potential losses. In short, people, in general, are risk-averse when it comes to gains, but will take more risks in order to avoid losses. The decisions that we take in service to the goal of minimizing losses are largely driven by heuristics, which are the mental shortcuts we take to come to a faster decision.

Heuristics largely exist in what is known as the “fast brain,” or “System 1” which is all about perceiving. As far as the fast brain is concerned, “WYSITAI – What You See Is All There Is.” That part of the brain can only work with information that it has, and simply cannot (and will not) do anything with information it doesn’t. All of the thinking happens in the “slow brain,” or “System 2,” but something needs to activate System 2 to get the real thinking to happen. The problem is, System 2 is lazy as hell (no judgment, just a fact), and doesn’t want to do any more work than it absolutely has to. The other problem is, System 1 often gets us into trouble, because it makes judgments and informs our beliefs without all of the relevant information.

We jump to conclusions because that’s what System 1 does.

Meme from the office for the The Affect Heuristic and Your SaaS Demo

Because of this, System 1 often makes judgments about how coherent the best possible story is, even if it’s not the correct decision. The easier the story is, the happier we are with the decision – a concept called cognitive ease. But this also makes us quite susceptible to making bad decisions, particularly bad decisions that we don’t know we’re making.

Do I like this?

One of the ways that System 1 impacts the decisions that we make is that it substitutes an easy question for a hard one. For example, the affect heuristic substitutes the relatively easy “how do I feel about this?” for the much more difficult “what do I think about this?”

“In a compelling demonstration of the workings of the affect heuristic, [Researcher Paul] Slovic’s research team surveyed opinions about various technologies…They observed an implausibly high negative correlation between two estimates that their respondents made: the level of benefit and the level of risk that they attributed to the technologies. When people were favorably disposed toward a technology, they rated it as offering large benefits and imposing little risk; when they disliked a technology, they could think only of its disadvantages, and few advantages came to mind…

The best part of the experiment came next. After completing the initial survey, the respondents read brief passages with arguments in favor of various technologies. Some were given arguments that focused on the numerous benefits of a technology; others, arguments that stressed the low risks. These messages were effective in changing the emotional appeal of the technologies. The striking finding was that people who had received a message extolling the benefits of a technology also changed their beliefs about its risks. Although they had received no relevant evidence, the technology they now liked more than before was also perceived as less risky. Similarly, respondents who were told only that the risks of a technology were mild developed a more favorable view of its benefits. The implication is clear: as the psychologist Jonathan Haidt said in another context, “The emotional tail wags the rational dog.”

The affect heuristic simplifies our lives by creating a world that is much tidier than reality. Good technologies have few costs in the imaginary world we inhabit, bad technologies have no benefits, and all decisions are easy. In the real world, of course, we often face painful tradeoffs between benefits and costs.”

Daniel Khaneman, “Thinking Fast and Slow,” P. 261 – 266

Let’s break this passage down. Slovic’s research demonstrated that technology opinions were largely influenced by what was seen as the risks, as well as the benefits. And, the more people hear arguments that make the benefits stronger or reduce the risk, the more they like the technology.

It should be noted that the context of this research is more consumer facing technologies (cars, chemical plants, food preservatives, water fluoridation) vs B2B, but, since people are people regardless of context, the results should still hold in a B2B/SaaS sales environment.

Being liked matters more than being the best:

The Affect Heuristic and Your SaaS Demo

Making decisions about technology investments can be daunting for those actually making the decisions. People try their best to find impartial sources (G2 Crowd, Slack groups, references, etc), but much of the information, especially in the middle of the buying process, is going to be from vendors.

The problem is, many vendors focus on features instead of stories, or functions instead of outcomes. Demos and presentations plod along, going through the same old NASCAR slides, the same “let’s spend 15 minutes talking about us.”

But people don’t want to talk about someone else. They want to talk about themselves. They want to work with the vendor that gets them, not the one that has the most features.

This is where the affect heuristic comes into play. Prospects and customers are going to substitute easier questions for hard ones. “Do I like this vendor” (easy question) replaces “is this the best vendor” (the hard question). “Will they support my use case” (easy question) replaces “do they have every feature out there.” And “is this company a safe choice to work with” is much easier than “will I get fired for picking this vendor,” which is a scary but often relevant question to ask.

But let’s go back to WYSIATI. The vendor that helps answer the easy questions, that helps the client tell the most coherent story, even if it’s not the most accurate or complete story, is the one that will get the business 99 times out of 100. Because no sales process is objective. Even with RFPs – they’re often written with a bias in place (either by a consultant who is trying to rack up hours and likely has preferred solution, by an employee who already knows which solution they want, or by one vendor who has provided the questions). Which is why most RFPs are decided by a few points, and those are often because the prospect put their thumb on the scales for the vendor they wanted.

People make decisions emotionally and justify them rationally. So make an emotional appeal by telling stories, by listening, by showing empathy. Be a person, and treat prospects like people. Even if you don’t have the prettiest UI, or the most comprehensive solution, most of the time it won’t matter. If you’re selling the solution that’s best liked, you’re selling the solution that will win.

If you are interested in understanding more about bias and heuristics, we have more free content that provides an overview, and we include these principles in our coursework and coaching. Please leave us comments and reach out if you would like to learn more about what we do.

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