Embrace Past Fear of Missing Out, It's Actually Fear of Better Opportunities That's Impacting Your Revenue
Everyone in marketing and sales circles is familiar with FOMO, or Fear of Missing Out. When something appears scarce or is on the verge of disappearing, it becomes more desirable. This is why phrases like, "Our lowest price ever - expires at midnight!" or "Only two left!" can be so persuasive. They stimulate FOMO, and in turn, encourage customers to act because they may not get another chance.
But what about FOBO? Fewer marketers are aware of this phenomenon. FOBO, of course, stands for Fear of a Better Option. Coined by Patrick J. McGinnis, author of Fear of Missing Out, this concept is as powerful as FOMO, but works in the opposite direction. While FOMO can accelerate sales, FOBO acts as a sales-killer.
How FOBO Kills Sales
FOBO arises when a customer hesitates in the buying journey. They might pause to explore alternatives or freeze in uncertainty. Analysis paralysis sets in. While choice is generally beneficial, an abundance of choices can be overwhelming. Customers struggle to identify the best option when weighing features, prices, and quality. This can lead to decision paralysis, where customers choose to do more research or simply give up trying and delay the decision.
The Power of Indecision in Lost Sales
Sales expert and author Matt Dixon asserts that anywhere between 40 and 60% of a salesperson's pipeline consists of lost deals due to no decision. The situation may be no different in consumer sales. Shockingly, 70% of shopping carts are abandoned before a purchase is made - essentially, no decision. This statistic doesn't account for the shoppers who almost make a purchase but cannot quite bring themselves to finalize it.
In sales, the emphasis often centers around business lost to competitors. Indecision, however, is the leading cause of lost deals. FOBO - the fear of a better option - plays a substantial role in indecision.
Dixon introduced the concept of "FOMU" or Fear of Messing Up. In business environments, potential buyers may avoid options with better potential due to their riskiness. A risk-free choice does not threaten the buyer's career, while a negative outcome, no matter how unlikely, could lead to career setbacks.
Overcoming FOBO to Improve Sales
To overcome FOBO and boost sales, consider these strategies:
- Highlight Your Unique Selling Proposition (USP): Make it clear what sets your product or service apart from competitors. This highlights the value in choosing your offering rather than searching for a better option.
- Focus on Value Over Price: Instead of driving sales by low prices, show customers how your product or service solves their problems or enhances their situation. Emphasizing value helps customers view your offering as a worthwhile investment, reducing the temptation to look for alternatives.
- Build Trust and Credibility: Leverage customer testimonials and reviews to demonstrate your product's or service's success. This provides customers with reassurance that your offering is a positive choice, reducing their concerns about finding a better option.
- Offer Personalized Solutions: Present your product or service as a tailored solution to address each customer's unique needs. This makes the customer feel like your product is carefully crafted just for them, reducing their inclination to seek a better option.
- Create Urgency: Leverage limited-time offers or flash sales to create a sense of urgency and encourage customers to make quick decisions. Reduced decision-making time reduces the time customers have to search for alternatives.
- Improve the Sales Experience: Streamline the checkout process by simplifying forms and offering multiple payment options. A seamless buying experience reduces the risk of being frustrated and abandoning the purchase.
- Engage with Customers: Utilize live chat and email marketing to engage with customers and address their concerns. Regular engagement helps build trust and keeps the customer invested in your offering, making them less likely to seek a better option.
- Address Concerns Proactively: Anticipate common questions or concerns repeatedly voiced by customers and address them openly. Proactively addressing concerns demonstrates that your company is prepared and confident in your product or service, which can reduce the customer's FOBO.
By implementing these strategies, you can successfully tackle FOBO and increase conversions by making your product or service more appealing and trustworthy to potential customers.
Matt Dixon, a sales expert and author, reveals that up to 60% of lost deals in sales are due to indecision. This echoes the 70% of shopping carts abandoned before purchase in the B2C sphere. Dixon emphasizes that FOBO, or Fear of a Better Option, is a significant contributor to these lost opportunities in both B2B and B2C contexts.
Amazon, a prominent B2C company, has mastered the art of overcoming FOBO through strategies such as providing personalized recommendations and offering Prime discounts for quicker delivery. By doing so, they create a sense of urgency and encourage customers to make decisions before they can reconsider.
In contrast, some B2B companies may struggle with FOMO, or Fear of Missing Out, when delaying decisions due to the perceived risk of missing out on better opportunities. However, strategically addressing both FOMO and FOBO can lead to improved sales outcomes.
For instance, by focusing on the unique selling proposition of their product or service, companies can showcase their value and reduction in risk for potential buyers, thus mitigating the effects of both FOMO and FOBO.
