How many coins do you think are there in this jar? Is it easy to decide?
Now what if the question was – Typically a jar of this size can hold up to 5000 coins when full. How many coins do you think are there in this jar?
What you see above is an example of anchoring. Pretty much what Steve Jobs did when he launched the iPad and often used by Apple to price all its products.
We all know about the Anchoring Bias.
The anchoring effect is a cognitive bias that causes our decisions to be heavily influenced by the first piece of information we receive. This becomes an anchor or reference point. All subsequent choices are interpreted with this value rather than objectively.
Anchoring is commonly used by sales leaders to influence their customers’ buying decisions, but they make mistakes when applying it to their own teams.
Anchoring Bias in Sales Teams
Anchoring can play a powerful role in goal setting for teams. Typically, sales teams have that one monolith of a goal that their performance is pegged to. The end of month/end of sales cycle target.
While getting anchored to month-end goals helps some, it also backfires. Think of the Sales reps somewhere in the middle of the pack. Those who don’t always hit their sales quotas? These reps typically get demotivated and stop chasing the target.
It is crucial to ensure that goal-setting is not seen as a one-size-fits-all approach but something that is realistic, achievable yet ambitious.
Sales leaders can use the Anchoring effect to help their team stay the course and produce more consistent results. But there is a trick to achieve that.
How you can Use Anchoring to Improve Sales Rep Productivity
- Set glide-path targets – Expecting a 60% rep to be as motivated as a 100% rep is unrealistic and demotivating. Sales leaders can set personalized targets based on the journey towards 100%. Approach for target setting also considers where the individual rep stands so that goals set are not too far away. This makes the target more accessible and therefore motivates sales reps to try just a little harder. Setting incremental targets is key to improving performance especially when it comes to slower performers.
- Incrementally increase targets – Once a small target is reached, a new anchor should be introduced that is incremented by a small amount from the previous target. Success with the previous target will help reps confidently approach the higher target. This will ensure consistency and high productivity from the employees.
- Personalize targets – When targets are set as per each sales reps ability and performance history, rather than for the entire team as a whole, it improves the chances of better performance. It also builds the confidence of reps to do better. The result is a calibrated (tweaked) anchoring that helps each sales rep in your team perform to the best of their ability and improve on their performance.
worxogo’s nudge coach uses calibrated anchoring to help slow performers improve their performance.
Read how this sales team used calibrated anchoring to improve their slow performers quota achievement by 11%.
To know more about this or how Nudge Coach can help you, click on get a demo.