The Rejection Then Retreat Strategy: Sales Psychology 101

by Josh Barney
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Have you heard about the rejection then retreat psychological sales strategy?

How can eCommerce businesses, digital stores, and brands increase conversion rates without adjusting their pricing or marketing strategy?

The answer lies in a small psychological sales technique that could make a difference to your digital business and landing pages.

marketing and sales psychology

The technique I’m about to explain goes against the strategies adopted by the vast majority of online stores. I see it when I’m shopping online, when I’m clicking on ads that’ve retargeted me (because checking out landing pages is something I’m sad enough to do in my spare time) and when I’m browsing brands and eCommerce stores.

The rejection then retreat strategy is a psychological technique that tips prospects who are on the fence into buyers, and increases the average order value of visitors who’ve entered your store with a buying mentality.

What Would You Do?

Before we get into explanations, reasons, and applications, read the examples to better understand rejection then retreat.

Let’s pretend (for the sake of this article) that we’re average customers who’re in the market for a new mobile phone contract.

  1. You visit a mobile phone provider’s website. The first thing you see on their homepage is an amazing deal for a cheap phone. It wasn’t what you were looking for but it’s a good deal. You then look at the phone that you really wanted and it’s more than 2x the price. This makes you think that the phone you wanted is expensive. So, you go back to look at the deal for the phone you didn’t want.
  2. You visit a different mobile phone provider’s website. The first thing you see is an offer for their premium, top-of-line phone with tons of storage and add-ons chucked in. It’s out of your budget but the price aligns with your expectations. You then search the website until you find the phone that you really want. It is less than half the price of the premium phone, making it seem great value. What would you do?

Whilst the above scenario might seem simple, the psychological effects it can have on buyers is immense.

A Rejection Then Retreat Example

To help me explain, let’s look at an example given by Dr. Robert Cialdini, author of the brilliant sales and marketing psychology book, Influence.

influence book cialdini sales psychology
This book is a must read for anybody in sales and marketing.

A boy scout approached Cialdini, asking him if he wanted to buy a $5 ticket to a scout’s social event. The thought of attending a scout’s social event and having to adjust his calendar, resulted in Cialdini turning this offer down.

As soon as Cialdini said no, the boy scout asked him if he’d like to buy some $1 chocolate bars to help them fundraise for the event. Cialdini bought 2 of these chocolate bars.

This doesn’t sound too amazing, right?

That’s because up until now, you didn’t know that Cialdini doesn’t actually like chocolate.

chocolate sales example rejection then retreat

The psychologist hypothesized that the only reason he decided to buy the chocolate was to help the boy after rejecting his first offer. If the boy scout had initially asked him to buy chocolate bars, Cialdini would’ve said no…

…but, because he was presented with a larger, more expensive and less reasonable offer first, he felt obliged to accept the smaller offer.

This is the power of the rejection then retreat strategy.

There are three psychological reasons that explain why opening with a premium, high-end offer first, before following it up with your best-selling price point (and upselling on it), works so much better than presenting your low-value product first.

Let’s take a look at them…

The Principle of Contrast

Everybody knows what contrast means, right? It’s when there is a striking difference between two things.

In this case, it refers to price.

contrast price comparison table sales psychology
Price comparison tables are a sales and marketing tactic that are often found on landing pages.

As a psychological demand, we seek relation. It allows us to compare, judge and come to informed decisions. This puts tremendous importance on the first price you present to prospects.

The rejection then retreat strategy uses the principle of contrast to align brands, products and offers with the high-end, premium corner of the market, before contrasting this feeling with an industry average price point…

…this contrast, causes urgency to buy and convinces sceptical prospects to purchase.

For example, I look on a branded sportswear website for a new pair of running shoes. I immediately see a pair of trainers that look amazing, but they are way out of my price range. This makes me see this product as an aspirational purchase. Before I leave the site, I see a similar pair of trainers that are within my price range. This effect primes me to buy.

premium priced products rejection then retreat

The principle of contrast highlights the importance of always showing your premium options first, as long as prospects are aware that this is NOT the only option available to them. And this is why it’s so powerful in sales psychology and the rejection then retreat technique.

This principle also works in reverse. When prospects see a cheap price first, they are much less likely to make high value orders. Think about it…

…why would somebody want to spend a lot on your brand, when others can align themselves with the brand for much less? 

The Theory of Reciprocation

I’ve actually written an entire article about this amazing technique, check out The Theory of Reciprocation: Get Back Big, By Giving Small First if you’d like to learn more! 

Reciprocation (at its most basic level) is the psychological compulsion to return a favour.

When somebody does something for us, a powerful psychological effect drives us to reciprocate in turn.

Reciprocation in social psychology definition.
Reciprocation in social psychology definition.

For example, has somebody ever bought you a birthday present that wouldn’t normally? When their birthday arrived, did you buy (or feel a need to) get them something in return? Have you ever been invited to an event by somebody you don’t know very well? And then felt compelled to invite them to something in return?

This theory works in the rejection then retreat strategy, because by retreating to a lower priced offer, you are reciprocating to your prospects needs. The reduction in price and demand is a favour.

The retreating element of rejection then retreat is perceived as a sacrifice or concession in order to fulfill your prospect’s need. And as a result, you will have triggered a psychological need to reciprocate in your potential buyer (making them much more likely to accept your second offer).

Structured For the Odds

The rejection then retreat strategy increases your chances of a prospect buying from you, because (as well as all the amazing psychological effects) you are able to make more than one offer.

Brands and businesses that go straight in with their best offer, will only win a new customer if this is accepted. If it is rejected, they have nowhere else to go.

sales psychology

However, by implementing the rejection then retreat strategy, you will win BIG if they take your premium offer, but if they reject it, you have a second chance to win by offering your best deal.

rejection then retreat sales psychology

By implementing this sales strategy, not only can you use the powerful effects of contrast and reciprocation, you can also enter in a (digital) negotiation with your visitors, offering multiple deals.

The structure of a rejection then retreat offer increases your odds, simply by doubling the number of offers.

How Can You Use Rejection Then Retreat Online?

If you’ve ever visited an IKEA store, you’ve seen this principle working in a physical environment. You are made to walk through every section, with their most expensive products always on display first (in the showroom areas).

IKEA rejection then retreat sales strategy
An IKEA store is a typically example of the rejection then retreat sales strategy.

Hopefully, you’ve already thought of a few applicable rejection then retreat ideas (for your brand) but, just in case you haven’t, I’ve put together a list of broad ideas that could be applied to (near-enough) any digital business:

  • Always having your products listed (by default) in descending price order, from highest price (at the top) to lowest
  • Promotional banner ads (at the top of your homepage) featuring aspirational, premium products (and their prices)
  • Re-marketing emails to cart abandons, offering them a discount on their purchase, or suggesting similar, cheaper products with the same product tags
cart abandonment email offer rejection then retreat
A cart abandonment email offer from Kate Spade, demonstrating rejection then retreat.

  • Prominently featuring your most expensive products
  • Using rejection then retreat to negotiate on price in conversational marketing – e.g. live chat or Messenger marketing
  • Running premium-priced products on ads, or using a catalog ad with a premium product featured BEFORE a standard offer
  • Pop-up triggered upon exit intent with an offer for a cheaper product or discount
  • Displaying prices for all plans when offering subscription deals
  • Asking for contact details when a warm lead rejects your offer

How Shouldn’t You Use Rejection Then Retreat?

When implemented incorrectly, the rejection then retreat strategy can have the opposite effect, lowering conversion rates and driving prospects away.

To avoid this painful situation, make sure you avoid these mistakes:

  • Inflating the prices of your regular products. Doing this will allow you to implement rejection then retreat, but prospects will automatically see you as being overpriced. Only use this tactic with premium offers!
  • Testing with mid-range products. Rejection then retreat will not work if you’re not all in. Be bold, offer your premium range first.
  • Assuming that you cannot use this tactic because you only sell one product (or many similar priced products). Whilst it isn’t worth creating a premium product purely for the sake of this strategy, you can ask for the contact details of anybody who declines your only offering. This smaller ask is less taxing and will build your marketing list.

Conclusion  

Rejection then retreat is a powerful sales strategy that is often overlooked.

Every day I see websites that start out by offering (or promoting) their cheapest offer, before trying to upsell prospects to their premium products. This type of strategy only works when a brand has a clearly defined sales funnel…

…and the sad fact is, most brands (especially in eCommerce) are not that well prepared.

Try things in reverse if you aren’t using a funnel! List your highest-priced products first (or at least alongside your best value offer) and upsell when they accept the retreating offer.

Josh is the Founder of We Imagine Media, an award-winning content marketer and best selling author. He creates and strategises content, sharing the most successful tactics with his lovely audience. He hates writing in the third person, follow him on the social links (above) so he can get back to writing as himself.

8 Responses

  1. Great read!

    However I have wondered if there is a conflict between the ‘Rejection Then Retreat Strategy’ and the ‘Foot In The Door Technique’.

    Some research strongly indicates that by getting subjects to agree to complete a smaller request, that they are far more probable to complete a larger request, indicating that it’s best to start with smaller requests.

    Then on the other hand, when I read of the ‘Rejection Then Retreat Strategy’ there is research indicating that it’s best to start with a larger, or over-inflated request as the subject will be more probable to comply with the desired and smaller request when it’s presented in contrast to first.

    What are your thoughts on this?

    Thanks!

    1. Hi Brad,

      The hardest thing to do (as a business) is to turn a prospect/lead into a customer.

      Every business has its own target market, products and marketing processes- this means that the best strategy to get the sale varies from company to company. On Digital, using a value ladder technique (products ascending in price/commitment) is usually the strongest technique, but there is also room for the rejection-retreat strategy (as mentioned in the How Can You Use… section above) in your marketing campaigns!

  2. I appreciate your sharing this! As a psychology graduate I’m immediately drawn to literature such as this. I’m also glad I actually stopped to check it out and not delete (sorry). You know how it is with daily emails flying into your mail box.
    I’m an avid reader when it comes to cpd! I’m Definately checking out some of your reading list suggestions.
    Can I just give my opinion about the value question of retreat vs foot in the door strategy…….in my experience whilst the foot in the door strategy might get you more first time buyers….it doesn’t evoke a positive trusting seller buyer relationship. The latter means they are less likely to be a returning or frequent customer. In my humble opinion 🤔

    1. Hi Amanda Jane, thanks for your comment!
      Yes, I really enjoy marketing psychology too! We’ve got some other guides that might appeal to you, notably, Psychology of Colour, and Priming in Marketing.

      I agree ab out the foot in the door technique too, but it depends how the technique is used. Every brand has it’s own unique propositions to consider!

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