Now there’s a scientific term named “The Sunk Cost Fallacy”…
…and it could be preventing you from closing more deals in your consulting business.
So what is a sunk cost fallacy?
It’s the tendency that we have as human beings to make decisions based on past investments.
Here’s an example.
Let’s say Alex has been negotiating a deal for the past month or so…
…and during this time, Alex has a bunch of meetings and goes back and forth, putting all his time & energy into this deal.
And when the deal begins to go sideways, he still holds on and never lets go…
And he keeps investing your time & energy despite knowing deep down the deal will not work out.
Now you may ask why would Alex even keep going and it’s because he’s invested.
And once you put your time & energy into something, you make the decision to keep on going because you’re invested.
This is the “Sunk cost fallacy” at play here – and it’s the most common thing most consultants fall victim to.
Now the thing you want to ask yourself if you’re ever in Alex’s situation is this:
“Is my time and energy better spent trying to save this deal that you know may not work out…
…or is it better spent going out and finding 3 more deals which have a higher probability of closing?”
If you were in this situation, what would your answer be?
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