Any customer-facing business needs to think about both their own decision-making processes, and the mindset of their clients. But research from Harvard Business Review has shown that we might not be making as many clear decisions as we think we are. In fact, there are certain psychological traps that we all fall into, and encourage others to fall into, which can confuse seemingly straightforward decisions and lead us astray.
Here are three of the most common stumbling blocks for making smart decisions, and how you can improve your strategic processes, and encourage your customers to do the same.
1. Don’t Make the Mistake of Anchoring Your Questions
Anchoring involves putting disproportionate weight onto the facts or information that we hear first. This could come in many forms, from a simple comment a colleague makes, to a statistic or a fact that springboards a discussion. For example, you might look at a client’s previous sales in order to project the next months revenue, when in reality – this data is not predictive.
HBR suggests four tactics for lessening the impact of Anchoring, all of which you can put into practice when you talk to your own customers.
- Encourage customers to come up with a starting gambit. Don’t put an idea in their head to begin with. Instead – ask the client what they have been considering, and then use that to advise and direct.
- Ask questions which look at the problem from a new direction. Start conversations with “What if?” queries which can broaden their starting point to include new ideas.
- Advise your customers to read widely around a topic and get advice from additional places. This strengthens the best-practice industry expertise that you are providing and ensures that they are not anchored into the first idea they hear, widening their frame of reference.
- Listen carefully to your customers to hear what their challenges are, to avoid Anchoring them into mirroring your own thoughts on their specific challenges.
2. Think Carefully About Choosing to Maintain the Status Quo
In many business situations, it can feel easiest to just keep things as they are. Integrating a new product, trialing a new solution, or on-boarding a new piece of software can seem like too much hard work, especially if there is uncertain gain at the end of it, or the rest of your team is cautious or pessimistic around change. However, in this era of “disrupt or be disrupted”, making change is important.
Here are some of the ways you can encourage your colleagues and your clients to think about the status quo, only opting for keeping things the same if it is really the right choice.
- Think about your goals for the business. Why did you start these conversations about a new revenue stream or solution? Does maintaining the status quo get you closer to where you ultimately want to be?
- Broaden your options. Many companies feel that they have only two options – the new innovative technology or keeping things the same way as they have always been. This is rarely the case. If one solution has too many negative points, open the conversation to find new tools and techniques that may suit you better.
- Make sure to be realistic about the effort. It’s easy to exaggerate when it comes to the costs and hassle that goes into making a change. If we’re honest however, most of us recognize that we get used to change pretty quickly. It’s just as dangerous to be pessimistic and stall innovation as it is to be optimistic and rush in too quickly.
- Make choosing the only option. One great workshop activity you can do with a customer, is to imagine that the status quo is not an option. In many cases this could be true, such as a piece of software or hardware having support discontinued. If the company had to make a new choice, what would they do? This can help avoid a quick-fire status quo decision.
3. Consider the Way You Frame Decision Making Conversations
Language is extremely powerful, and as an MSP – you may be asked to advise and consult on decisions that your client’s business success hinges upon. When we frame questions as either a positive or a negative, we put them forward in such a way that they encourage one particular response from a client over another.
Think about a business plan to integrate new technology and embrace digital transformation. It involves many stages and you are taking it to your client as a proposal. It may feel natural to introduce the conversation with “This proposal will end up increasing productivity by X%” or you may want to be cautious and say “The estimated costs will be $X.” Truthfully, both of these are examples of Framing, and could lead to poor decision making on both your own behalf and that of your customer.
Instead, try outlining the pros and cons in a more detailed way – going through them with your client systematically and viewing the same information from multiple points of view. In this situation, the two Framing examples above can become two halves of the same coin. There will be X costs, and these will result in X productivity benefits.
Today’s MSPs are More than Simply Service Providers
In order to stay ahead of the competition, you need to be able to become a valuable extension of your client’s business. Whether it’s advising on strategy, using smart tools such as RMM, PSA, or remote access, or becoming the go-to counsel at the end of the phone, you need to feel confident that you are thinking clearly, on their behalf as well as your own.
As HBR comment, awareness of traps like the three outlined here is your best weapon against falling into them, and the first steps to building a strong relationship with your clients with a foundation of intelligent decision making.
Want to hear more about how Atera makes becoming a full-suite MSP simpler? Get in touch.