Are you a gambler? Apparently many people are. According to the 2006 Gross Annual Wager Report, Americans lost nearly $91 billion on all forms of gambling combined. That’s a lot of loot. Much of it is lost in casinos. Casinos do a great job of understanding human behavior to get people to gamble away their money. Your sales are hopefully not a game of chance. You still need to understand customer behavior so you are more likely to sell.
How many choices do you offer? People make decisions by comparing one choice to another. The persuasion principle is known as contrast. Do you ever notice that off-white fabric looks dingy only when it’s next to bright white fabric? That’s contrast.
Contrast is used in business to make decisions. When there are multiple choices, we compare one to the others. When in doubt, if there’s only one choice, it’s harder to make a buying decision. Why? There’s nothing to compare it to. If you submit bids, do you only offer one choice to your customers? That is a mistake.
I worked with a consulting company. They offered one program as the solution for each bid. It was basically a take it or leave it proposal. They weren’t as successful as they should have been. Their success rate was 50%.
I asked if the program they present in each bid could be broken into three offerings: a low priced version, a medium priced version with a few more options and the highest price offering with the most options. It could. I suggested that they change their proposals to offer the one proposal that they would have offered in the past as the low cost option. Then offer two higher priced options. I predicted what they will find is that more companies select the middle priced offering. I was right.
Here’s why. A wine expert recently told me that in the restaurant business, the most highly marked up bottle of wine is not the least expensive bottle in a category, but the second lowest. Why? People don’t want to be seen as cheap by ordering the lowest price bottle. They select the second cheapest.
The wine expert was absolutely right. My husband took a client to an expensive restaurant. The least expensive bottle of wine was $100. My husband didn’t want to look cheap so he picked the second lowest priced bottle. I’ll bet the wait staff at his table were smiling at his choice!
There certainly are enough gamblers in Las Vegas. You don’t have to gamble with your selling. When you bid with three choices, you can tap into people not wanting to appear cheap and picking your lowest priced offering. You’ll also help them make a buying decision. That’s something you don’t want to leave to chance