1.2, 17, 544, 1019………
5,10, 50, 100………
The first series of numbers did not exactly make you happy reading it, now did it? But the second series of numbers was a pleasant read. Wonder why?
Our brain finds comfort in round numbers. This has immense implication in our everyday lives as humans – affecting how we negotiate salaries to how we celebrate anniversaries.
In game theory there is a concept of “focal point” – a solution that people tend to choose by default in the absence of communication. What do I mean by that? Let’s take an example.
In salary negotiations you will often see companies start the offer from a number below what they have in mind. Suppose you are negotiating and they offer you $87,000. $87K is a focal point for negotiation.
The company very well knows the rounding-off bias coz the other party (you) would then want it to be rounded-off. So you say: “Ummmm…..can we make it $90K?” and before you know, the HR responds: “Deal!!🎯”
In truth, salaries are often round numbers to begin with. In the above example the job on offer was always $90K but to make you feel you leveraged it and knowing well that people pick the closest round number, you were offered $87K😄
This is true of budgets. This is true of quota allocations.
Below tweet from Walmart is another good example. Notice they choose to not give you the exact number of businesses using Shopify but instead say: “more than 1 million businesses”.
Rounding off bias shows up in our culture too. While birthdays are celebrated every year, you don’t see anyone inviting you for their “46th birthday” as a very special event. But they would definitely invite you to their “Golden Jubilee” – the “50th birthday!”
Even our sayings show this bias!
Our emojis show this bias too! Can you find if there’s an emoji for “97”? Perhaps “22”?
However there’s one for “💯”😄
So how do you use this bias as a sales rep? From the salary negotiation tactic above, you know you can very well use this in pricing negotiation. But there’s one more situation where this is most useful and hardly ever used: meetings.
Round numbers are often used when estimating the time taken to complete a task. Suppose you need an hour to showcase the demo to your prospect. Do not book meetings at timings that are easy to round off in your prospect’s head. What do I mean? Let’s use an example.
If you booked the meeting at 4PM and you need 60mins to showcase your demo, your prospect very easily sees the length of the demo and might not be open to the idea. Same is true for meetings booked at 10AM, 1PM, 6PM…etc.
Instead if you booked the same meeting for the same 60mins at 2:15PM or 3:45PM – a non-rounded off number – your prospect will not feel that it is gonna take her an hour long on this demo. Same length of the demo but very differently perceived – all thanks to how our brains are wired😄