The JOLT Effect with Matt Dixon

Full Episode Transcript PDF: Click HERE

Intro [00:00:00]:

Welcome to Brainfluence, where author and international keynote speaker Roger Dooley shares powerful but practical ideas from world class experts and sometimes a few of his own. To learn more about Roger’s books, Brain Fluence and Friction, and to find links to his latest articles and videos, the best place to start is RogerDooley.com. Roger’s keynotes will keep your audience entertained and engaged. At the same time, he will change the way they think about customer and employee experience. To check availability for an in person or virtual keynote or workshop, visit RogerDooley.com.

Roger Dooley [00:00:37]:

Welcome to Brainfluence. I’m Roger Dooley. Today’s guest is a special treat for me, as his work has influenced my own in a major way. Matt Dixon is the author of three bestselling books the Challenger Sale, the Effortless Experience and The Challenger Customer. Matt’s latest book is The Jolt Effect how High Performers Overcome Customer Indecision. He’s a frequent contributor to Harvard Business Review on sales and customer experience. Matt is a founding partner of DCM Insights, a boutique consultancy. Previously, he served in leadership roles at organizations like Tether corn Ferry, Hay Group and research firm CEB. Now Gartner. When I was writing Friction, the research Matt and his colleagues at CEB did helped shape my thinking about the effect of effort on customer behavior. In recording this episode, we experienced some technical difficulties that led to much of my video and audio being corrupted. So I’ll be filling in for myself after the fact as needed. Luckily, Matt’s end of the conversation was recorded without a problem. So you’ve got 100% of the good stuff. Enjoy the show.

Matt, I’m curious. You would think that by now your theme would have been put out of business. Why do companies continue to create such effortful experiences? It seems like by now everybody should know that too much effort is a very bad thing.

Matt Dixon [00:01:58]:

It’s funny, Roger. I remember when I wrote the book and I gave a copy to my mom and she said, are you telling me companies don’t actually understand this yet, that this is what customers want? And I said, you’d be surprised. Actually, companies think you want something totally different. They think you want to be wowed and excited. And she said, well, they don’t do a very good job of that either.

Roger Dooley [00:02:22]:

It’s one of those things that everybody knows about. Years ago, I was going to speak at sort of an elite entrepreneurial conference, and I said, Well, I’m going to talk about friction, wasted effort. And they said, oh, no, everybody knows about friction. You got to do something else. If everybody knew about it, it seems like we’d have a lot better experience on that point.

Matt Dixon [00:02:42]:

It’s an interesting one. My sense is people companies do know about friction. I think what they struggle with is a couple of things. One is they don’t know really, or don’t appreciate the impact it has on customer loyalty. But I also think that they don’t really know how to fix it. I remember years ago, Roger, we were talking recently about an airline experience you had. I was presenting to one of the big airlines in Europe and I remember putting up on a screen all the drivers of customer effort, like repeat contacts and channel switching and repeating your story over and over again and getting transferred or escalated and these kinds of things being forced to jump through hoops. And the head of the group, the customer service group, kind of started laughing. And I was thinking, of course you’re laughing, you’re an airline, you enjoy doing this stuff to your customers. But that’s not why he was laughing. Why he was laughing is he said, that’s our project list. That was our project list last year. Those are our priorities, to knock those things out. And by the way, that was our list the year before and the year before that, and I’m pretty sure it’s going to be our priority list next year. Tell us something we don’t know. The problem is we don’t know how to fix these things. So I think that’s probably more the issue I run into with companies.

Roger Dooley [00:03:51]:

Right. Probably. It’s difficult too. I mean, they may know how to fix them, but fixing them is expensive. I mean, I’m sure that that’s right. Airlines are running on legacy code in a lot of cases, and they can’t really change the website easily without fear of breaking it and such. But it’s difficult to affect change. In fact, I just did a workshop for an Austrian company in New York City, and a leader in that group who is dot at the highest executive level in the organization, said in our company, fighting friction is a high friction experience, that there would be a lot of resistance to making change, that would change the variables that we want.

Matt Dixon [00:04:34]:

Making things easy is hard, it turns out.

Roger Dooley [00:04:36]:

Anyway, before we jump onto the Jolt book, is there any new data from the effortless experience? Because effortless experience is some years old now.

Matt Dixon [00:04:45]:

Yeah.

Roger Dooley [00:04:46]:

Looking basically at the effects of wasted effort on loyalty, have you developed any new data since then?

Matt Dixon [00:04:52]:

A few things I would throw out there. So one my co author on the new book The Jolt Effect was a guy named Ted McKenna. And he and I spent about four years at a conversation intelligence company called Tether, and they actually work with a lot of brands, both B to B and B to C. But we actually used a lot of their machine learning platform to continue to explore the contours of effort reduction. What creates effort for customers, what are the things that great companies do to minimize effort or reduce effort? And we were able to use unstructured data, right. It recorded phone conversations and chat interactions, email exchanges, SMS exchanges, things like that. The original research, of course, was built off of survey data. And so this has been fascinating to now be able to look at millions and millions of actual customer service interactions and look at how does effort actually play out, not as a customer recalls it, and how they fill out a survey after the fact, after their service experience, but actually how it happens in the moment. So I think it’s really enriched our understanding of effort. I would share with listeners is that I think if we look back on the effortless experience, I think there’s probably two places where, if we were to rewrite the book today, the two areas I’d focus on to update it. I think the first one is around this whole question of digital, right? So we talk about digital. Creating a sticky self service experience is something that low effort companies do. Obviously. I think our take on technology and digital was probably obsolete as soon as the book came out because technology, as you know, changes so dramatically. I’ll give you an example. Like something like an omnichannel experience back in 2013 was just like this figment of the imagination. It was something vendors were talking about, but you couldn’t find any companies actually doing it. Fast forward to today and you’ve got platforms like Service Cloud and Customer and Gladly and the list goes on and on who are actually delivering this kind of seamless omnichannel experience to brands all over the world. So you can find hundreds, if not thousands of companies delivering that kind of experience. So these things have changed pretty dramatically. Now, the other area I think we’d have to do an update is on the front line experience, because I think what’s happened is there’s two things there. One is as we get better at self service and digital, what happens is the easy stuff goes away, and then what’s left over for the live service representative is, by definition, the more complicated things. These are the things that the customer couldn’t solve on their own, that you couldn’t have an AI like a chat bot or virtual assistant handle. You actually need to talk to a human being. And so that’s really changed the employee experience, the frontline agent or representative experience, when you layer on top of that. The second thing is work from home. And what’s happened in a world where service representatives are now working out of their basement offices, home offices, you name it, with the dog barking and the kids and the FedEx guy at the front door, and they’ve got all these distractions and they don’t have their peers surrounding them anymore that they could lean on to help them solve some of those more complicated issues. So you’re finding issue complexity going up and the support surrounding the representative kind of going down, or if you will, being lessened in this work from home environment. So I think that creates a really challenging job for the frontline representative. I point your listeners toward two articles we wrote that came after the book. One is called kick ass customer service. The other is called reinventing customer service. Both of those were in Harvard Business Review over the past couple of years. And I think they’re a good window into how do we think differently about hiring skill development and building the right culture for our service organization so that they can really thrive in this world of much more demanding customers, much more complicated issues. And do it in a world where they’re often on an island by themselves without their colleagues and managers at the ready to help them.

Roger Dooley [00:08:46]:

Matt’s latest book is the Jolt Effect. A key focus of the book isn’t on sales lost to competitors. It’s on sales lost to indecision. Here’s why Matt thinks indecision is so important.

Matt Dixon [00:08:57]:

That’s right. So we’ve been tracking this Roger for the past few years, but what we found in our research is that anywhere between 40 and 60% of the average salesperson’s pipeline are deals that are actually lost to no decision. So to be very clear, these are customers who will go through the entire purchase journey. So if you’re in a transactional, even a consumer setting, let’s say you’re selling insurance or home services or cars or what have you, cable, mobile phones, it doesn’t matter. Pick your consumer product. These are customers will spend a lot of time with your representatives, your sales reps in your call center, or if you think about business to business. These are customers who will go through the entire six month purchase journey evaluating your solution, talking to your reference customers, kicking the tires on your product, having you do demo after demo after demo, proof of concept trials, pilots, you name it, building proposals, only to end up doing nothing. And I think if you look at that 40% to 60% of the average salesperson’s pipeline, and then you multiply it across a team, then you multiply it out across the entire organization. This is a problem that represents a massive dead weight loss for a commercial organization. And it’s a problem that’s getting worse literally before our very eyes. I was in at the salesforce.com conference a couple of weeks ago, the Dreamforce event in San Francisco, and I remember presenting the content around The Jolt Effect early in the week. And there’s one guy from a B2B company who came up to me afterwards and said, I checked with our Sales Ops people. I think our no decision loss rate is about 45%. So, yeah, this is a big problem for us. We don’t pay enough attention to why this happens and what we can do differently.

He came back to me. I saw him again at the end of the week, and he said his Sales Ops person told him just in that week, given the down economy and all the scrutiny that’s on big purchases right now, that number was over 50%. So just in the span of like five days, that number had, for a single company had moved multiple percentage points. And I think a lot of companies are seeing that now. They’re seeing a lot of initiatives canceled. They’re seeing a lot of customers who were engaged early on suddenly ghost them, go radio silent, disengage from the purchase journey. And again, it’s a huge cost to us in sales.

Roger Dooley [00:11:08]:

Conventional sales wisdom is that the reason most customers don’t make a decision is status quo bias. If you’re faced with a decision that doesn’t have a clear winning option, it’s preferable to do nothing. Why change if you don’t have to? The typical sales response to this is to sell harder, reiterate your benefits, ramp up fear of what might happen without your product. Matt explains why this doesn’t work.

Matt Dixon [00:11:32]:

When you think about what salespeople are trained to believe and what they’re told by their managers and what their managers are told by their sales leaders, it is very much what you just said, which is, look, if the customer starts to disengage. If they start to show signs of heading down into that wasteland of no decision, it’s because they are still suffering from status quo bias. Right? You haven’t put the status quo to bed. Either they believe what they do today is good enough. They don’t believe that your product or your service is a compelling enough reason to change. Right? It’s not a superior enough alternative. Or maybe they just don’t think it’s a top priority, right? I’ve got other priorities, other fish to fry. But all of those reasons are because they are still committed to their status quo and you need to break the gravitational pull of the status quo. And as you said, very well. Like every salesperson knows that customers regularly will pass up on better opportunities sitting right before them. Instead, just keep continuing to do what they do, right? People are lazy. They like to avoid change. So it takes a lot to get somebody off their status quo. But in a world where salespeople have been taught that anytime a customer starts to ghost you or disengage or go radio silent or start to get cold feet, is because you haven’t beaten the status quo, what we tell salespeople to do is go back and do a few things. So first of the first thing we tell them to do is go back and rearticulate the benefits of our products and service. So, Roger, you must have missed when I showed you how many zeros there were on that ROI calculation and how much money you’re going to make by how much money you’re going to save and how great this is going to be. So we try to paint the rosy picture. If that fails, the second thing we tell salespeople to do is dial up the FUD, right? The fear, uncertainty and doubt to try to create a burning platform. Make the customer squirm a bit, right? Roger, these problems are not going you can’t wish them away. They’re not going to solve themselves. Your competitors are all using our product, and they’re seeing tremendous benefits. And I’d hate for you to be left alone with your terrible current solution. So again, we try to get the customer to realize the cost of their inaction. And the third thing we often see salespeople do is they try to use that sort of disappearing discount, like, well, I understand this might dot be the right time, but that 10% discount I gave you is really only good this quarter, and I can’t give you that price next quarter. Prices go back up or leveraging like an implementation window. So we’d love to get you up and running with our solution, but our platform but we only have a certain number of implementation slots. If you don’t sign up now, I can’t guarantee you when we’ll be able to get this installed for you. Think about supply chain shortages, right? We only have a certain number of those product in stock, and I don’t know when we’ll get it back in stock. I cannot guarantee. So if you don’t buy it, we’ve only got a few left and nothing I can do. So what we’re trying to do is get the customer off their status quo by dialing up the FOMO, the fear of missing out. And what we found in the research is that more often than not, those techniques actually backfire. They don’t actually get the customer off the fence. In fact, they make it more likely the customer will do nothing. And the question is why? And you asked it before. So what really is driving the customer to become indecisive? And what we found is it’s not your inability to make them appreciate the FOMO, to dial up the FOMO. It’s the FOMO. It’s not the fear of missing out, it’s their fear of messing up. And so when we actually look at that in detail, what we find is this is a good representation of not status quo bias, but what’s called omission bias. Omission bias is about when I’m looking at two paths. One is a path where I lose, but it’s through inaction. Something bad happens, but it’s because I did nothing versus something bad happens because I did something. Human beings are wired to avoid that second path and to go for the first path. Nobody wants to be on the hook for a loss that they are personally responsible for. Now, the question I think salespeople often ask is, well, what are customers so worried about? It turns out in our research, we found three specific fears that they have. There are three specific types of FOMO, or fears of messing up. The first one we call a valuation problem. Valuation problem is where the customer doesn’t know what to pick. So whether you’re looking at homeowners policy, so it’s a consumer purchase, or whether you’re looking at a million dollar software implementation for a business, a B, two B purchase, there’s so many different options that we can consider. There’s different contract lengths, there are different integrations, there are different bells and whistles. There’s premium versions, basic versions. You’re rolling out software, you could buy ten seat licenses, you could buy 1000. There’s all kinds of different things we can consider evaluation. Problem is, when the customer is looking at all this stuff and it all looks good to them, and they struggle with the question of what not to buy, right, because I can’t have it all. So when I decide what should be in the package, I eventually sign up for, I don’t want to make a mistake, I don’t want to pick the wrong thing, I don’t want to take the wrong thing out of the shopping cart. And I worry that if I do that, it’ll become an irreversible decision. So that’s the first type of FOMO. The second type is a lack of information. So there’s this irony, Roger, I think, in the world today, where take any purchase, whether it’s buying a new laptop, buying a car, buying again, a complex, expensive solution for your business, there are so much information out there for customers B to C and B to B, to research every kind of purchase decision they might make. I mean, we could spend a lifetime researching before we ever consume all the available information. And so, while there’s so much information out there, and I think maybe because there’s so much information out there, the second type of FOMO is when the customer feels like they haven’t consumed enough of that information. They’re not a savvy enough consumer. As you know the old saying, buy or beware right. And it’s the customer feeling like it’s the next white paper I read, or the next customer review, or the next reference call I do that will show me all of this mistakes to avoid in buying this product or this service. The third type of FOMO is called outcome uncertainty. That is, Outcome Uncertainty is very specifically where the customer fears they won’t get what they’re paying for. Now, it’s not nefarious, meaning that they’re not worried that the company is going to take their money and not give them anything. That’s not really the concern. Their concern is more that they won’t fully get the benefits. So imagine I’m selling a business solution to you, and we’ve built a business case on like a ten x ROI, and it’s going to lead to these great growth in your business and cost savings and all these great things. It’s the customer worrying about, well, what if we only get a five x ROI? If that happens, it’s going to be a bad look for me, and in the current environment, I could actually lose my job. Think about a big expenditure in the current environment where there’s so much scrutiny, so much risk aversion, the customer putting their badge on the table and saying, we’re going to go forward, we’re going to partner with this vendor, we’re going to buy the solution. It’s going to generate tons of money for us. And when that doesn’t come to pass, somebody gets called to task for that. I was presenting this recently to, as I mentioned, the salesforce conference I had, a VP of software came up to me afterwards and said, I suddenly realized we do this all the time. We tell our salespeople to do this is when the customer starts to get cold feet, dial up the FOMO. And what I suddenly realized is in the grand scheme of things missing out on a 10% discount versus losing your job, it turns out that they care more about losing their job. So I don’t know why we do this, but it makes perfect sense. And these are human concerns. These aren’t even about customers versus other. This is just the way we’re wired as human beings. And I think for so long in sales, we’ve just told people every indecisive customer is a nail and you got to use your FOMO hammer to beat on those nails. But it turns out it’s the FOMO that keeps them from moving forward, not the lack of FOMO, if you will.

Roger Dooley [00:19:01]:

So Matt, given that the indecision issue is not status quo bias, it’s this FOMO or various, various other issues, what are? You really wrote an entire book about this. But in a nutshell, what are some ways that people in sales can deal with this type of indecision rather than trying to either invoke scarcity or other issues like that?

Matt Dixon [00:19:25]:

So the book is called The Jolt Effect. And it turns out Jolt is actually an acronym. And I’ll tell you what those four techniques are that it speaks to. We found these in our analysis, which again, we looked at two and a half million recorded sales conversations and used machine learning to study those. So we found these actual behaviors. These were not things we invented. It’s things that Star Salespeople kind of came up with on their own because they realized this is a big problem, not being able to dial down the FOMO. So they came up with this playbook on their own. We just gave a framework for it. We like Jolt because it’s memorable, but it also says what’s happening here, right? We’re kind of jolting the customer out of their stuck indecisive state. So the first technique is the J is judging the level of indecision. Everything starts there. We need to understand what is the source of the customer’s indecision, what’s causing them to become indecisive, how indecisive are they at a personal level? And are there other contextual amplifiers, for instance, an economic downturn where there are a lot of eyes on every single purchase decision? Or maybe it’s a customer who’s gotten burned in the past by a vendor. And so there’s a lot of baggage that they’re bringing to this decision right now through no fault of your own. As a salesperson or as a supplier, but the customer is bringing that to the table and it’s amplifying their indecision when we do that. The funny thing about indecision is it’s not something people are comfortable talking about. If you ask customers, they’ll all say they’re decisive people. But we actually know from the data 87% of those sales calls we studied had customers with either moderate or high levels of indecision. So the reality is actually quite a bit different from how we tend to think of ourselves. And so it’s everywhere, but it’s really hard for salespeople to detect. So we need to dial in our active listening so we can spot those signs of indecision and what customers are saying. And then we’ve got to develop techniques to be able to get the customer to articulate their fears. How do we get them on the table so that we can talk about them and do something about them? Now, why that’s important is it tells us what’s our playbook for getting the customer across the finish line, and then, of course, it tells us when we should forecast this opportunity to close this week, this month, maybe next year. And is this even worth our time, or should we pull up the ten stakes and maybe spend our time elsewhere? So that’s a J. The O is offering your recommendation. So we know in sales that one of the things we love to do is put lots of options in front of our customers, and that’s actually options in choice are a bit of a double edged sword for any of your listeners are familiar with. Barry Schwartz’s book around the paradox of choice we found is that that really plays out in sales, big time customers. When you put lots of options in front of them, they get really excited. They love that your solution, your product can be integrated with almost anything else that they have. It’s totally configurable for their needs. There are all these new roadmap items like bells and whistles out the yazoo. They love that. But the problem is when they go from talking about an idea to actually having to buy something, that does require some hard choices, namely what’s going in the shopping cart and what’s coming out. And what most salespeople tend to do is when the customer starts to look at everything and say, boy, this all looks great, Roger. I don’t know what should be in the final proposal, because I don’t know what to say no to. It’s like looking at a buffet and everything looks great. And they struggle with making those choices. What most salespeople do is they put the decision back on the customer. Well, Roger, tell me what’s really important to you and your business. My hope is by asking you the right questions, you’ll figure it out on your own. But that’s a little bit like going to a restaurant and seeing 20 great items on the menu, and you ask the waiter or waitress what you should order, and they say, well, what are you in the mood to eat? It’s actually not very helpful. What you’d rather is that waiter or waitress say, everything Roger, we make here is wonderful. You can’t go wrong. But this is my favorite dish, and if you want something a bit lighter, I’d go with this one. That’s a great one too. What we found is that’s what best salespeople do, they will let 1000 flowers bloom, but then at some point they break out the weed whacker and they get to a narrower consideration set and they put a personal recommendation on the table. What happens in that moment? Something called delegate theory. It allows the customer to shift some blame for a bad choice onto the salesperson, just like you would if the waiter or waitress recommended their awesome dish and you didn’t like it. It’s not totally on you. It’s a little bit on them because they recommended it. The third one is limiting the exploration. So this is all about getting our customers. Our customers will want to be experts. They don’t want to buy a thing until they’ve read all their user reviews. They’ve done all the research, and the problem is they can’t consume all the content. It’s physically impossible. They’ll spend a lifetime and they’ll never consume all of it. And so how do we get the customer to stop wanting to be an expert themselves and start seeing us as an expert, as a salesperson? Not just an expert, but a trusted expert. The analogy I use here, Roger, is if you think about it, imagine you were planning a trip to Italy with your family and you’ve never been there before, and you’re out there shopping for a travel agent. Would you want to work with a travel agent who also has never been there and never planned a trip for anybody else, and who maybe you suspect? His only motivation is to get you to stay in five star hotels and fly first class because that’s going to be more money in their pocket and try to oversell you. Or would you want to work with a travel agent who said, I understand exactly what your budget is and in fact I think we can save you a little bit of money and you’re going to have an awesome experience. Because I go to Italy like ten times a year. I’m totally in the know. I plan hundreds of vacations that have been look at all these thank you notes I’ve gotten from my travelers. They love the trips I put together for them. That is a trusted advisor, right? And so it’s a term we use a lot in sales, but we don’t often define what it means for salespeople. So we’ve got to take key moments and we’ve got to establish that trust that we’re not there to hide the ball or hide the dirty laundry or sell the customer more than. They need and also position ourselves as an expert, as an advisor. And there are key moments where salespeople can do that in our analysis. Again, if your customer doesn’t trust you and doesn’t see you as an expert, that’s a customer who’s going to do their own research and they will engage very quickly in analysis paralysis. We found that when and this is a danger for salespeople, last thing I’ll say on this one, because when the customer is asking for more content, they’re asking for another demo or another reference call or another white paper that feels to the salesperson like they’re making progress, right? We can put it on the CRM system. They’re engaged in the learning journey. They’re moving towards a decision. But what best salespeople know is that that’s a recipe for analysis paralysis. They’re going to end up just endlessly consuming and never end up making a decision. So I’ve got to get them to stop trying to be an expert and to trust me as their guide and their expert. The T is taking risk off the table. So remember that outcome uncertainty we talked about. I might not get all the benefits I expect from this purchase. We’ve got to establish a safety net for our customer and that could be as simple as an opt out clause or a prorate to refund clause in your contract. But in complex purchases, it might be something like adding professional services to the agreement so we can make sure if anything goes sideways, we’ve got your back, and we are there to make sure we get back on track. And we don’t have any slippage or roger, I know this deal is just because this proposal has just gone to legal and we don’t have a signed agreement, but what I’d like to do is sit down with our customer Success team because I think what we’d like to do is roadmap out how we’re going to go from installation to value. What are the key performance indicators we’re looking at? Who should be involved? What are the obstacles we’re going to want to look out for? This is built off of what we know great companies do when getting value out of our solution. We’ve been there, we’ve done that, we’ve got your back. And so that instills the feeling for the customer, any of those techniques. I’m not going to look like a fool for buying this. I’m going to look like a hero, actually. And so that’s the JOLT effect. Four key behaviors. And again, we like it because it speaks to what’s happening here. We’re getting the customer from I want this to I bought this, which is the goal, of course, in sales.

Roger Dooley [00:26:56]:

That was a great summary of The JOLT Effect. And I encourage our audience members not to assume that they’ve learned it all, but to pick up, because it is really packed with good information. It’s not a gigantic book, but it is really full of good info. That is, I think, actionable for really any kind of sales process. So Matt, how can people find you and your ideas?

Matt Dixon [00:27:18]:

Sure. Well, I’d love to be connected with any of your listeners. If you heard me on the show, by all means send me a LinkedIn invitation. Let me know you’d like to be connected. Maybe you have a follow up question. Hit me up with that. Let’s just stay connected and continue the dialogue. The other way you can check us out is visiting https://Jolteffect.com. A lot more information about the book and the research. A number of free resources on there as well. Manager, coaching tools, things of that nature. And then also a lot of options for how we’re helping companies enable those skills and develop those skills amongst their salespeople.

Roger Dooley [00:27:47]:

Great. Well, we will link to those places on the Show Notes Page at https://rogerdooley.com/podcast. Matt, thanks much for being on the show. I wanted to connect. It’s great to finally have that happen. Take care now and good luck with the book.

Matt Dixon [00:27:59]:

Thanks, Roger. It’s great being here and great to be connected with you as well.

Outro [00:28:03]:

Thank you for tuning in to Brainfluence to find more episodes like this one, and to access all of Roger’s books, articles, videos and resources. The best starting point is RogerDooley.com. To check availability for a game changing keynote or workshop, in person or virtual visit RogerDooley.com.