Buyers are Liars. Wait, What?
Want to do an interesting online search? Fire up your favorite browser and go looking for “Buyers are Liars.”
It’s a common phrase in several industries—car sales and real estate, for example. In each of those industries, you can find two related-but-different versions of that phrase.
In version one, it is usually spoken by a resentful salesperson, as in, “Can you believe that guy? He told me he would be right back within the hour, but, well, you know—they walk out the door, they’re gone. Buyers are liars.”
In version two, a more seasoned seller, often in conversation with a young trainee, speaks it. It goes, “If they say they want a cul de sac, brick construction, east-facing kitchen—don’t believe it. Maybe one of those is key—the others they’ll compromise on, because you know, buyers are liars. You have to find out what they really want, they don’t know themselves. They don’t mean to lie; that’s just how they think.”
Both views are right. And both are reflections of businesses in which the seller holds a lot of power by virtue of expertise and a potentially menacing and arcane sales process. Not surprisingly, buyers respond with their own attempt to control the situation—withholding or otherwise manipulating the truth.
This is precisely the dynamic I’ve observed over the years in watching clients buy professional services. Clients have not been to buyers’ school. They don’t know what to ask, but are afraid of being flim-flammed. So they resort to what feels low-risk—asking the seller to recite their qualifications and testimonials.
The weaker salespeople take the potential client at face value, and actually believe they want to hear the selling firm’s resumes and past client history. Then follows the sleep-inducing recitation and powerpoint avalanche.
Do client buyers lie? Yes, and mainly it’s the services firms’ fault. The trick is to get to that place of mutual admission that there’s something each can bring to the party.
What about a very different industry?
A University of Texas study explores the “buyers are liars” theme in the market for entrepreneurial firms, often by private equity buyers. As the study’s author, Melissa Graebner, puts it:
… buyers were not only less trusting than sellers, they were more likely to be dishonest. Beyond price bluffing, several buyers engaged in what Graebner calls "material deception" with regard to their plans for post-integration "layoffs, changes in strategic direction or diminished roles for senior managers."
Sellers—generally smaller firms owned by the person who created them—appeared far more trusting of suitors. Little surprise, perhaps, given the passionate, conquering nature of entrepreneurs: "Me big geek," one seller told Graebner. "I’m a technologist. I want to build something that I want everyone to use. I want my ego boost! I’m not here for a quick buck, I’m here to do my big thing."
Another reason for the trust gap between buyers and sellers, notes Graebner, is the perceived transfer of power. "In the course of an acquisition, sellers lose power while buyers gain power," she says. "Given their prospects of heightened power, buyers viewed a seller’s trustworthiness as nonessential."
In car and real estate sales, I would say the seller has most of the power, and customers lie out of fear, recognizing that fact.
In professional services, it is the clients/buyers who often hold more power, yet don’t know it; so they also act from fear—with a result that is often harmful to both parties. The advertising industry may be an extreme example lately.
In Graebner’s study, I think the buyer has the most power again; but here the ego weakness is on the part of the seller, not the buyer. And it’s not fear that’s afoot, it’s a desire for ego stroking.
Sellers want to believe they can trust the buyer. And so many buyers, who truly do have the power, choose to lie.
Are buyers liars? Yes, but as a current movie says: it’s complicated.