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Chapter 3
Controlling Illusions = Controlling the Deal

Let's take a quick pop quiz. From the list below, pick out the statement that is false:

Shaving makes hair grow back thicker.
Toilets flush in different directions in the Northern and Southern hemispheres.
The forbidden fruit of Adam and Eve was an apple.
Vikings wore horns on their helmets.
Bulls become angry at the colour red.

It is always fascinating to watch people discuss these statements. Some people decide on their answer quickly. Others narrow the list down and then have a long debate over the two or three that remain. Over the years, we have learned that everyone who has taken this quiz has one thing in common. They are all winners, because their selection doesn't matter. All of the statements are false.

The statements demonstrate what happens when pieces of information flow through culture unchecked and unchallenged. Years, decades, or even centuries of repetition and coincidence can turn a notion into a perceived fact. That occurs in corporate cultures as well, not only in national or ethnic ones. When no one doubts a statement's veracity anymore, no one applies any effort to question it.

This is known as the illusory truth effect.¹^,² It occurs when the brain starts to accept and believe in an appealing message that is being repeated constantly over time without any contradiction or any evidence to cast serious doubt. Our minds literally take the statement for granted.

Salespeople can also use the illusory truth effect to their advantage, especially when they need to get their points across in a noisy environment (Situation 3.1).

Situation 3.1: I always come up with new ideas, but somehow, I cannot get heard

It is the classic daydream of anyone at work. We’ve all had it. Instead of ‘Once upon a time …’ these adventure stories begin with ‘If I were in charge … .’ You have an idea for a change. It could be a tweak to the way your value proposition is phrased. It could be the sources you use for some of your data. Or it could be something much more fundamental, such as a change to an established process in your department. The problem is that no one seems to be listening to your ideas. They might hear the words, but they aren’t getting the concept and its benefits, nor are they taking you seriously.

These daydreams arise from the frustration that the processes we follow explicitly and implicitly in our business, and the hard and soft guidelines that govern those processes, are not our own. When we have a suggestion of any sort – from a small tweak to a better way to do something – we want others to hear our ideas and support us. This is an occasion when the science around System 1 calls for an offensive response, rather than a defensive response based on awareness of an effect.

What is the science behind this? This source of power in this situation is the illusory-truth effect. Research on the illusory-truth effect demonstrates that repeated statements are easier to process, and subsequently perceived to be more truthful than entirely new statements.

There is still a defensive angle, however, with respect to the illusory-truth effect. The repetition of short, compelling statements is one way that advertisers, governments, and other institutions try to instil beliefs in a particular group. In its benign form, think of all the classic advertising slogans you can recall, and the feelings you associate with them. It is a trick to mix newness with familiarity.

Our recommendation: Sales teams can use this technique to their advantage proactively, especially when they are introducing new brands or products. A new idea does not sell itself. It requires an appealing message repeated often, without change, over a longer period. It takes time for the message to settle into the buyer's or the R&D person's brain before they start to attribute some truth to it. The newer and more innovative the idea is, the more time you will need to spend on preparing the other side for acceptance.

This is one reason why very innovative ideas often fail at first. System 1 rejects them as unfeasible, outside the rules, or ‘too new’. It has not had enough time to internalize them. It is vulnerable to visceral reactions, but repeated consistent messaging can calm those reactions. With sufficient time, other people may start repeating your message or co-op some of your language, which will reinforce the effect.

Selling to System 1: Do first impressions really matter?

You have probably heard the old cliché from your parents or grandparents: ‘You never have a second chance to make a first impression.’ As with any cliché, one has to wonder whether the truth behind it is illusory or real. What do you think?

We'll give you the answer quickly this time. Many of the clichés and stories you may have heard about sizing up another party, about giving and making a first impression, and about setting a scene are valid. They all have their ultimate roots in System 1. In short, System 1 plays a role in sales negotiations right from the outset.

Doubters often cite a lack of credible resources to explain these phenomena. The usual explanations come from a combination of inherited oral culture and personal experience. The explanation in Situation 3.2 comes from science. When we strip away cultural differences, types of industries, and other superficial differentiators, there are some fundamental human activities that take place when people meet. These constant and consistent activities are the common denominator on which a salesperson can build offensive and defensive strategies for winning the Invisible Game.

Situation 3.2: The ‘bean counter’ walks into your meeting

You have seen that person, straight out of Hollywood casting, walk into one of your negotiations. They dress so conservatively that they blend in with the furniture in the conference room. The most exercise they seem to get is from removing a thick binder from a high shelf. You anticipate that their voice is monotone, but it can probably rise and become emphatic when they need to protect numbers as if they were protecting their own children from a dangerous predator. A thought quickly flashes across the news ticker at the bottom of the screen in your mind’s eye: ‘Breaking News: This Meeting Will Be Terrible.’

Are we typecasting and stereotyping with that description? As politically incorrect and inappropriate as it might seem in writing, that is exactly what System 1 does in its biologically hard-wired efforts to help us. In the world of System 1, we carry an image of ‘bean counter’ in our memory, and if someone matches the picture, our minds will quickly fill in all the blanks for us about that person. Ditto for someone that looks like a librarian, a fashion model, or a hippie. It can be extremely difficult for us to articulate precisely what we think about the person, and how they might respond to our overtures, but rest assured, your System 1 has a plan.

What is the science behind this? System 1 is relying on the availability heuristic.³ That mental shortcut relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method, person, or decision. This explains another frequent comment that we hear from salespeople, that ‘in our company, the first explanation or idea is usually considered to be the best choice’. The rationale one hears to defend that statement is that your gut reaction or your ‘blink’ answer (to borrow a phrase from Malcolm Gladwell) has merit. It does not come from out of the blue, but rather has some solid basis.

The basis is System 1's application of the availability heuristic. It is performing an instantaneous form of pattern matching. It sifts through images, experiences, and sensations in our minds to find the closest match or to pass judgment, and it allows us to respond almost instantaneously.

Our recommendation: You should be very consciously aware of the first impression you leave with new contacts. The purchasers are also ‘always on’. We are all human and thus all equally subject to same behavioural, psychological, and neuroscientific effects. That is one of the most compelling aspects of these forces and how they apply to negotiations.

That means that the people on the other side of the table are judging you – whether they know it or not – in the same way according to the availability heuristic. This mechanism is identical and universal. The only difference across people is the set of images, experiences, and sensations that they draw their matches from.

Clothing is one of the first and strongest triggers for a first impression. How many times have you left a meeting – no matter how serious the topic – and the first question you ask aloud is something similar to ‘what was up with that awful tie?’ or ‘did you see those shoes?’ Coco Chanel once famously said: ‘Dress shabbily and they remember the dress; dress impeccably and they remember the woman.’⁴ Or as designer Karl Lagerfeld said: ‘Sweatpants are a sign of defeat. You lost control of your life so you bought some sweatpants.’⁵

Most importantly, the manner of dress should fit the environment. If the objective is to establish a level of trust and a potential for partnership, it can make sense to adopt the dress code of the other party. We know of one management consultant whose team wore business suits to an initial meeting with a potential customer in the entertainment industry. During a break, the leader of the potential customer pulled the consultant aside and delivered a blunt message: ‘If you want to work here, lose the suits. You're scaring people. They see suits and think you are here to cut their jobs.’ From that day on, the consulting team's dress code ranged from business casual to jeans.

Likewise, the choice of organizational positions sends a message about the salespeople and the company they represent. The more complex and incompatible the job titles seem, the greater the risk that the other side will either put its guard up or be dismissive. Your hot-shot 24-year-old team member may truly be the best and brightest person you have ever hired. But when the person on the other side is old enough to be that team member's parent and then sees ‘executive vice president’ or ‘associate partner’ on their business card, an immediate mistrustful or resentful reaction should not come as a surprise. System 1 says ‘I do not like this.’ The same thinking applies when the ‘Vice President and Senior Director of Customer and Key Account Relations’ meets a purchasing team in a company that has only ‘purchasers’ and ‘senior purchasers’.

The complexity of a company's hierarchy sends a message about how the company thinks and operates. First encounters need to reduce the information asymmetry between the two parties, not confuse it or aggravate it. Your entire appearance, from your clothes to your business card, needs to fit to the message you intend to send to your customer and not to your position within your company.

Another important opportunity to make a first impression occurs when someone starts a new sales job. Let's assume you are succeeding someone in a given role. Planning for that new job warrants a System 2 analysis of the business, the nature of the role, the person who previously held that job, and the customers that person interacted with. We recommend that you write down the strengths and weaknesses as well as the ‘natural preferences’ of your predecessor.⁶ What did they deliver that the customer considered valuable? What behaviours was the customer accustomed to? On a separate piece of paper, we suggest that you write down your own strengths and weaknesses.

Finally, ask yourself and your new boss about the overarching objective of your new assignment, beyond the numbers. Are you supposed to maintain the business relationship ‘as is’ or move it in a particular direction? Are you supposed to ensure sustained success or initiate a fresh start? Will you be introducing new products or services or a new basis for the relationship? Answering those questions will help you and your manager to formulate qualitative goals.

To develop your plan for a first impression, you match your strengths – your own natural preferences – against those qualitative goals. In a ‘maintain’ situation, success depends on how well you adapt to what the customer is used to from your predecessor, the one who established the existing level of trust. Then you can weave in your own ideas and play to your strengths. A fresh start, however, requires a different approach. Change must be visible and unmistakable from Day One. The strongest signals – and the easiest ones to apply – are different clothing and a different communication style to reinforce the message of change. If you come with an agenda of change, but mimic your predecessor, you send a mixed message. Change should look and feel like change, not just sound like it.

In short: be conscious of your stereotypes and categorizations, but don't neglect the signals you are sending. Likewise, you should beware of biases due to legacy. Mastered past experiences are what System 1 matches against. You should start to mistrust feelings such as ‘this is how things have to be done’ or comments such as ‘the way we have always done it has always worked, so it must be the best way’.

The next quiz question involves a little bit of maths. In accordance with a rule for determining the next number in a sequence, we list the following numbers: 1, 3, 5, 15, 17, 51. Can you figure out what the next number in the sequence is? We will reveal the answer after Situation 3.3.

Situation 3.3: My customer is just going through a phase … right?

You go into a meeting and notice right away that something is off. Your purchasing contact is acting a little strange, but you are willing to cut him some slack. They have had some organizational and leadership changes there. You and your contact have had many years of fruitful collaboration, and you attribute the weird behaviour to his need to adapt to the personality of his new boss. So your conclusion is clear: let’s give them some time so that the new boss can get onboard and understand how things are done between us. After all, we can rely on a long-standing relationship with that company and we know the purchaser likes our products and likes us.

This may not look like a problem at first glance. But your conclusion in this case is clearly under the influence of System 1. Your brain has created an illusion of stability, thanks to your long-standing relationship with the customer. It wants to preserve the illusion and treats the weird behaviour of your contact as a blip or a minor aberration. You think that it is only a matter of time before everything converges back to the normal baseline that the two of you have followed for years.

What is the science behind this? In this case, System 1 is yielding to what psychologists call the confirmation bias.⁷ When confronted with a change that does not appear to be an immediate or existential threat, people tend look for any information that will confirm their pre-existing beliefs. It influences how they search for, interpret, favour, and recall information. This makes it easy to confirm and reinforce the stability and success illusions.

The downside, however, is that your mind also tends to switch off the critical thinking that System 2 ought to be doing. Instead of putting up your antennae to search for more clues to explain the strange behaviours – and consider their implications for the ongoing relationship – you stifle any impulse to challenge the long-standing status quo. The underlying cause of the behavioural change might be coming from their side, or it might be on yours. This is particularly risky in times of transformation. Our minds are set up for efficiency and prefer the known to the unknown, so we have a natural tendency to resist change. We like to run on autopilot and we are in fact designed for it. You might know that same feeling from shopping if your grocery store has changed the store layout. Even when orange juice is now in aisle 5 instead of aisle 8, we may find ourselves walking on autopilot to aisle 8 a few times before we have reprogrammed ourselves.

The danger is that you could ignore problems that are on the horizon and miss clues that could allow you to act before the consequences are irreversible.

Our recommendation: System 1 and System 2 can only match against the information they have. We recommend that you deepen your understanding of the current situation and broaden your perspective. Find a devil's advocate who can provide an independent outside view that broadens your perspective. You can also be your own devil's advocate when you encounter behavioural changes. Have System 2 challenge System 1. Increase the frequency of contact with your customer and ask open questions along the lines of:

What is the customer's bigger picture?
What could be the new purchaser's mandate?
How and when do they re-evaluate their suppliers?

You cannot know everything that goes on in your customer's company. But when checking up on a regular basis – especially during times of personnel changes – it is worth taking a distanced, objective look at your customer. This is not an invitation to treat every change as if it's another episode from Only The Paranoid Survive, the memoir by Intel's co-founder Andy Grove. At the same time, your assumptions about your customer should get a regular refresh. Otherwise, you might limit yourself and might miss some big opportunity your competition could see and pursue.

Now let's return to the maths problem. When Kai poses this challenge during one of his lectures, someone in the class will quickly and excitedly shouts out ‘53’.

‘Correct!’ Kai will say. Then he will ask what the rule is.

‘The rule is +2, x3, +2, x3, and so on’, the student says. Then the class falls into a bewildered silence when Kai disagrees.

‘No, that is not the rule’, he says. ‘Try again.’

The students work out all kinds of rules that lead back to 53, and in each case, Kai says ‘no’ despite their protestations that he should check his arithmetic or that he is just being standoffish on purpose.

The actual rule is far simpler: each number needs to be higher than the previous one, or in mathematical terms, n>n-1. The students saw many patterns while working under the assumption – never stated by Kai – that there was one and only one answer to the question of ‘what number is next?’ When the students stopped trying to confirm what they thought they knew – that 53 was the answer – they started suggesting different answers and eventually figured out the rule. Only a method of falsification can challenge the confirmation bias, but never a method of verification.

Framing: Controlling the context

There once was a monk who asked the abbot at his monastery if he may smoke while praying. Shocked at the crudeness and utter disrespect the monk displayed, the abbot told him ‘no’ and ordered him immediately to go to confession.⁸

The next week, the abbot left to embark on a pilgrimage. Cigarette in hand, the same monk approached the abbot's replacement.

‘May I pray while I'm smoking?’ he asked.

‘Of course,’ the new abbot said, impressed with the monk's dedication.

What the monk did in that sequence is known as framing, an essential skill for anyone in a negotiation. Whoever sets the conditions controls how a negotiation will go. Similarly, whoever sets the logical connections, the sequence of events, and nature of the language (positive or negative tone, for example) exerts a decisive influence over the outcome of the negotiation. There are countless examples of companies that boosted the sales of a product simply by changing either the tone of the messaging or the nature of the positioning.

A real-life scenario (Situation 3.4) illustrates the power of framing.

Situation 3.4: I feel betrayed by my customer. We hit every mark and still lost the deal

You meet your customer’s requests every step of the way. All through the project phase, you received tremendously positive feedback. You think you played the game perfectly. Nonetheless, when the phone call came, you could hardly believe your ears. Your competition won the business, supposedly because they introduced a new product feature. It is no surprise that you feel betrayed. You played your strongest hand well and went all-out to meet all the customer’s requirements. And you still lost.

Those deals are among the most frustrating kinds of losses. You didn't see the ‘no’ coming. That light at the end of the tunnel turned out to be an onrushing freight train. You have no idea what you did wrong. Everything you submitted and every step you took was met with an enthusiastic response from the customer. There was apparently no signal whatsoever.

What is the science behind this? The specific term here is schema. People sometimes substitute mindset for this, but the more precise word is schema, which is ‘a knowledge structure consisting of any organized body of stored information’.⁹ Gaby would use this analogy: ‘Think of it as an advanced form of pattern matching. If I tell you “we are going to watch the football game this afternoon at the bar”, your brain will automatically call up a bunch of images of what to wear, what to talk about, what mood to expect, and what food and drink to order. That happens because “football game at a bar” is kind of a social pattern or schema with its own set of behaviours associated with it.’

Similarly, if someone says ‘party’, we expect people to act cheerful, excited, talkative, and maybe a little silly. If we say ‘formal party’, the expectations change, because schemas influence perception, attention, and behaviour.

The sales negotiation in the situation above had a particular schema that the sales team can easily and comfortably respond to and follow without challenge. If we extend this to use the term ‘mindset’ as well, we could say that the mindset is a person's particular frame of mind, based on the existence of a certain schema. It is how a person frames an interaction.

Our recommendation: In your preparation, you should challenge the schema of the negotiation and its parameters. This does not mean that you must confront your customer or rebel against what they have asked. It means that you should think through the frames of the negotiation – and the rationale behind each aspect – rather than accept them at face value. Remember, the customer established the frame for this negotiation and made a significant yet mostly invisible effort to influence the schema. You followed. Accepting it without question means that you are willingly playing their game.

Ask yourself what project parameters could change during the negotiation, the process, or the interaction. In a world where uncertainty is the only constant, goals and parameters can change quickly and significantly. Imagine how your competition could influence and take advantage of such changes to beat you. What are your potential blind spots, and what aspects might the customer be concealing from you? Maybe there is an implied ‘above and beyond’ in what the customer is asking?

One effective procedure is to conduct a ‘pre-postmortem.’ As depressing as that phrase may sound, it can be a powerful learning experience to pretend that you lost the deal, then ask yourself how and why that happened. What did you miss? What pieces of information could have changed the course of the negotiation?

Many outcomes come down to how well you know the buyers themselves. It is not unusual for buyers to have extensive profiles on LinkedIn, or to publish their thoughts on other professional and personal platforms. Researching them and their firm across publicly available platforms, and continually refreshing that knowledge, is not stalking. It's good business, with System 1 and System 2 working hand in hand.

Another popular example of framing is the ‘monkey business’ illusion. A team of people passes a basketball to each other, and the person watching the video is asked to count how many passes the team makes. The viewer's focus on counting the passes causes them to miss many other events that take place in plain sight and which are obvious in hindsight. The point is that we miss a lot when we let others determine where we should focus our attention.¹⁰

Quick review: Feeding System 1 and building your situational awareness

System 1 needs enough experiences and patterns to draw on so that it can inform your gut that something is correct, odd, or risky. The word ‘experience’ does not mean a number of years, but rather the breadth and depth of situations someone has encountered. A salesperson with 20 years in their role, but little variation in situational experience may not have the range and accuracy of judgment of a colleague who has 5 or 10 years in their role, but draws on exposure to many different people, challenges, selling situations, and opportunities. Even simulated experience can prove beneficial.

That underscores the importance of honing your System 1 skills, from a defensive and an offensive standpoint. The more you build up System 1 by mastering new experiences, the greater your capabilities will be to play defence and offence with confidence. You control your behaviours by making them intentional and not only intuitive.

By defence, we mean that you can trust your gut as a guide when you receive a signal during a negotiation. By offence, we mean that you can try to influence the System 1 responses of others and use them to your side's advantage in a negotiation. Either way, we recommend that you hone your split-second judgment. You train for trust in the same way as the professional referees we mentioned at the beginning of Part I. You increase your chances of triggering a positive System 1 response from a customer when you follow these guidelines for structuring and delivering information:

Reduce complexity as much as possible, because the human brain is easily overwhelmed by too much information.
Avoid conflicting information, because conflicts make it harder for System 1 to pattern-match and trust its judgment.
Signal urgency with short messages.
Provide one piece of information at a time.
When in doubt, repeat a previous piece of information rather than provide a new one, because repetition serves as reinforcement.

Notes

1. Hasher, L., Goldstein, D., and Toppino, T. (1977). Frequency and the conference of referential validity. Journal of Verbal Learning and Verbal Behavior 16 (1): 107–112.
2. Brashier, N.M. and Marsh, E.J. (2020). Judging truth. Annual Review of Psychology 71: 499–515.
3. Tversky, A. and Kahneman, D. (1973). Availability: a heuristic for judging frequency and probability. Cognitive Psychology 5 (2): 207–232.
4. The most inspiring Coco Chanel quotes to live by. (2018, August 17). Vogue Australia. https://www.vogue.com.au/fashion/news/the-most-inspiring-coco-chanel-quotes-to-live-by/image-gallery/b1cb17be7e20734d0b255fbd5a478ed4 (accessed 25 May 2022).
5. Fisher, L. A. (2020, February 19). Karl Lagerfeld's wittiest, most iconic, and most outrageous quotes of all time. Harper's Bazaar. https://www.harpersbazaar.com/fashion/designers/a26405187/karl-lagerfeld-quotes/ (accessed 25 May 2022).
6. For an additional perspective, see Watkins, M. (2013). The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter. Boston, MA: Harvard Business Review Press.
7. Nickerson, R.S. (1998). Confirmation bias: a ubiquitous phenomenon in many guises. Review of General Psychology 2 (2): 175–220.
8. A widely circulated story of unknown origin.
9. Gilovich, T., Keltner, D., Chen, S. et al. (2018). Social Psychology. London: W. W. Norton and Company.
10. You can watch the video here: Simons, D.S. (2010, April 28). The Monkey Business Illusion [Video]. YouTube. https://www.youtube.com/watch?v=IGQmdoK_ZfY (accessed 4 August 2022).

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Table of Contents for Chapter 3: Controlling Illusions = Controlling the Deal

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Selling to System 1: Do first impressions really matter?

Framing: Controlling the context

Quick review: Feeding System 1 and building your situational awareness

Notes

Table of Contents for
Chapter 3: Controlling Illusions = Controlling the Deal