The recognition heuristic in action

For example,suppose a company issues an RFP and receives twenty proposals in response. Someone at that company has to sort through those submissions to quickly eliminate most of them. At this stage of the evaluation, there is not much in the way of careful analysis, no real weighing of the evidence. An initial set of "no names" will be discarded. That's the recognition heuristic in action. Then the evaluator will begin to apply a decision factor or two. For example, some of the proposals will be eliminated because they did not follow the RFP instructions. Some will be cut because they did not answer all of the questions or indicated by their answer that they were noncompliant with a key requirement. The decision process will move very quickly until the evaluator has the pile down to something more manageable.

Single-Factor Decision Making

But how do customers decide if they recognize both us and our competitors? Or if they have never heard of any of us? Typically, at that point they move to a slightly more complex heuristic and choose among the options based on a single criterion or factor. This single factor is assumed by the decision maker to be a useful indicator to sort among the options.(sometimes there are as many as two or three criteria, but seldom more than that.) Make sure you suscribe to my posts to get more updates through e-mail.

When the customer is ready to buy,what happen?

Conversely, if we receive an RFP from a potential client we have never heard of and with whom we have absolutely no relationship, we probably ought to "no bid" it. Our chances of winning are minimal. Finally, it means that if you are a sales professional, you can't depend solely on the corporation to handle recognition building activities. You should make the effort to communicate with your prospect and leads on a regular basis to maintain recognition. Send the prospect a clipping, drop the prospect an e-mail with an interesting Web link like http://refreshin5minues.wordpress.com that interestingly says:"what the world really needs is more love and less paper work. They say you only fall in love once,but that can't be true.....Everytime I look at you, I fall in love all over again.", leave a voice mail, and make other efforts to communicate something of interest or value every six weeks or so. That way , when the customer is ready to buy, you won't be relegated to the discard pile because the decision maker doesn't recognize you

Our chances of winning are minimal,checkout how

The recognition heuristic indicates the importance of repeated exposure, in the form of advertising and branding activities at the corporate level, and repeated contacts, in the form of phone calls, e-mails, and other forms called "nurturing" the account. Our pre-proposal activities lay the foundation for choice by establishing recognition. What else does the recognition heuristic tell us? Well, it certainly suggests that if we represent a small or new company and our prospects have never heard of us, we may have a difficult time winning deals.

Our pre-proposal activities lay the foundation for choice

To test the principle, I have often shared a "lunch menu"at the outset of seminars. The so-called menu gives ATTENDEES two options: a turkey club sandwich or baked gravlox with crem'ora sauce. As you might expect, over 90% of participants will choose the turkey club sandwich. A few adventurous souls choose the gravlox,and a few will complain that there's no vegetarian option. But people for the most part are not willing to eat something for lunch that they have never heard of. So what does this mean for our proposal efforts? First, it suggests how important pre-proposal activities are. If the evaluator has never heard of us and our proposal comes on his or her office DESK, chances are we won't get much more than a cursory glance. (Converely, if you work for a fortune 500 company, you may get passed along to the next stage of evaluation based on recognition alone.)

The Recognition

The first and simplest technique depends on recognition as a simple cue to make decisions. The basic principle is that given two objects,one recognizable, the other not, we infer that the recognized object has higher value. For instance, suppose your laptop computer suddenly died. You go to your I.T. Manager and tell her that you need a new one. She says, "well, you are lucky, because I happen to have two brand new laptops with all the software installed. You can have either this IBM Thinkpad or this kretzenheimer millennial. Which one do you want?" Chances are, you will take IBM. Why? Because you've never heard of the other one.

Understand how people gather and process information

How long does it take people to make a "keep/discard" decision? On average, a little over six minutes. Infact, fast and frugal! By understanding how people gather and process information, we can gain good insight into the best way to organize our proposals. Also,we can structure our evidence for maximum effectiveness and can prioritize the content to match the kind of information the customer is looking for based on the decision techniques he or she is using. In simple Heuristics the authors describe seven heuristics of choice, but of those there are three that are particularly important for making business decisions.

Internet security services to groups of business professionals.

Our ancestors didn't have the biggest teeth or the sharpest claws, so they needed to make good decisions. Those decisions helped them survive, and they help us function this day. To determine whether people use these techniques in making a proposal-related business decision, I asked business professionals to evaluate a proposal for internet security services I distributed, noting the time when they reach a decision either in favor of or against the offer being made in the proposal. They are looking at a real proposal, one that deals with a complex, important problem and offers solution priced at approximately $250,000. Leave a comment.

Checkout How People Really Make Decisions

Recent research has recorded for the first time how people actually make decisions. It turns out that people use a limited set of decision -making strategies or techniques. We use them from the time we're kids who are taking "multiple-guess" tests in school resort to these techniques for narrowing our choices, in our personal lives, in college, and even in our business activities. Take for instance in our carport net business,we do sometimes decide to cut it 10m x 5m instead of 5m x 5m. The researchers speculate that these techniques,or "fast and frugal heuristics" as the authors of Simple Heuristics call them, are hard-wired into our brains, part of our evolutionary survival package.

Start looking at your proposals as tools

By keeping those long-range objectives in mind as you write each proposal, you may be able spot leverage points. If you have a choice between two or more equally right solutions, you can recommend the one that will move the business relationship in the area you want it to go. In other words, start looking at your proposal as tools and opportunities. Rather than seeing them as a kind of test that's been set up by clients to count you out,look at each business proposal as a means of accomplishing your objectives. That is the real problems you face-not just getting the proposal done on time so you can check it off your list of sales"activities,"but making sure that when it is done, it accomplishes exactly what you want. Don't forget to post a comment.