Psychology in Sales – Study #3

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Study #3 – Admitting Shortcomings


Is it ever a good idea to admit to your faults? After all, people want to see the perfect you, the perfect company, product, service, etc…


The Study


Consumer behavior research from social psychologist Fiona Lee states that admitting shortcomings is a great way to simultaneously highlight your strengths.


Lee’s study aimed to measure the effects of admitting to missteps and faults, and how these actions would affect stock prices. Experimenters read one of two fictitious company reports. (Both reports listed reasons why the company had performed poorly last year.)


The first report placed emphasis on strategic decisions that turned out to be wrong.
The second placed emphasis on external events. (e.g, the economy, the competition, etc.)


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psych 3.2

The test subjects viewed the first company far more favorably than the second. Admitting to shortcomings in areas like strategic thinking showcased that the company was still in control, despite their faults.


After examining hundreds of these types of statements, Lee found that the companies who admitted to their strategic faults also had higher stock prices the following year.


When blaming external forces (even if they happened to be true), companies gave skeptics a reason to view them as not having the ability to fix the problem, in addition to the consideration that they might just be making excuses.


Hope this helps make your week even more successful.


Happy Tuesday & Happy Selling!