You just finished the call. You know, the call from the dealer that you have been working with for the last couple of months. The dealer whose office you left last week feeling confident that he or she was going to change providers and award you their business. All that was left was a couple of details to wrap up.
I think more business may be lost due to the “Status Quo Bias” of the dealer and decision team, rather than a financial or service advantage offered by the incumbent.
But now they tell you that they are going to stay with their current provider. It doesn’t make any sense; you know you were the better choice. What happened?
Most of the time we rationalize that the incumbent must have really cut his deal and made some big promises to keep the business. Maybe they did, maybe not.
I think more business may be lost due to the “Status Quo Bias” of the dealer and decision team, rather than a financial or service advantage offered by the incumbent.
The status quo bias is a serious threat to every competitor vying to unseat an incumbent. It’s a powerful threat and present in every deal.
If that is so, why are we surprised when we get the call?
Overcoming the Status Quo Bias
Can we get better at anticipating and overcoming the status quo bias? Yes, we can.
The first step is to realize that the status quo bias is present in every transaction, and that if it isn’t discussed early and throughout the acquisition process, we could be setting ourselves up to receive some bad news when we least expect it.
The fear of change allows us to rationalize the irrational.
When thinking about changing providers, the dealer will tend to put an irrational or greater emphasis on the potential pain or loss of the change, rather than the potential gain when considering you and your agency.
The status quo bias is rational to the dealer when the perceived emotional cost of changing is greater than the potential, logical benefit of making the change. In the moment, the dealer sees the pain of change as more real than the possible gains of doing business with you down the road. Not good.
To work through this, ask the dealers some critical questions to explore the pain of change so it can be a rational and defined part of the process, not a fear.
For example, they may hear you tell them how smoothly the transition will go from systems integration to launch. But what is more valuable early on, is for them to hear that you are a practical expert in managing change.
Eventually, they need to know that you will not be just directing the transition, but supporting them in confronting the status quo bias throughout the process.
Don’t avoid asking some critical questions that will help gauge the level of the dealer’s status quo bias.
Can you share with me a transition your organization may have went through recently?
How did it go? Knowing what you know now, would you have done anything differently?
Which of your managers would be the first to embrace a change if it benefits the business? Who might come in last?
Asking these types of critical questions opens a great dialogue. If you are fortunate, the dealer may ask why you are asking these questions.
Tell them. Let them know that you deal with the status quo bias every day. Whether you are training and developing dealership associates, talking with a potential client or even internally in your own agency.
Let them know that for you to be effective and serve your dealers you must be an expert managing and guiding people past their status quo bias. Share with the dealer that there is no growth without some discomfort and pain, and see if they agree.
If they do, change gears and ask them to focus on the benefits of not giving into the status quo bias and ask them: What would happen if you decided not to decide, or just continued to accept the status quo?
The only answer is “nothing.” Then suggest that if doing nothing was truly acceptable to them, you most likely wouldn’t be having the conversation.
Don’t be surprised by the “status quo bias.” Embrace it and include a discussion about it in your acquisition process. If you do, you might avoid “the call” with your next prospect.
John Tabar is the vice president of Training at United Development Systems/Brown & Brown Dealer Services. He is an industry veteran with nearly 30 years experience in the automotive retail environment.
