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  • Joe Wichowski 9:52 am on August 19, 2013 Permalink | Reply  

    Why McDonald’s 3 Sizes are really just 1 choice… 


    I admin it – I love McDonald’s French fries.  Warm, fresh out of the hopper, with lots of Ketchup (Ah! They have Heinz!).  Its a guilty pleasure that my daughter and I love to share often as a mid-Saturday afternoon snack, especially in the winter months coming back from sledding.  Its our new “tradition”.

    But recently I began to wonder – why am I so adamant on always buying the Large?  When I think about it, I don’t even consider the small – it doesn’t look big enough to me.  And the medium – I always “feel” that I may run out.  Besides, the price of the medium and the large is so close, its better to have “more” than not enough, right?  I have a reason to buy the large, right?  I mean, it only makes sense

    Come to find out, McDonalds is no dummy.  Marketing studies have shown that you can add persuasion to get people to “super size” their options by focusing on the “size” of your offerings, and their related prices.  Here’s how they do it:

    1. Offer 3 choices (A, B, and C).  Make the first choice “small” or the bare minimum.  Then, make the Medium choice very close in size to the Large (or very close in offerings).  It shouldn’t be exact, but it should be close enough to “cloud” the picture – make it difficult for the client to see much different between the two.
    2. Next comes pricing.  The price between A and C should be based on the margin – it should reflect the actual value offerings, and provide good margin (or desired margin) for your company.  In practice, the price for A versus the price for C should roughly be somewhere around 2x – meaning the items included within C have to be limited enough to reach a 2x spread.  Then, the price of B is to be skewed very close to C – towards the top 25% of the spread between A and C.
    3. Remember if the price between A and C is too large, the “value” of C gets diminished, and users can simply select A.  Not necessarily bad, but C is the “desired offer”.

    In following this pattern, it is quite easy for McDonald’s to sell Large French fries all day long.  The key is in the value.  So the question becomes, how can you apply this to your sales offerings?

    In my first post on providing options during the sales process, I discussed the power of 2 choices.  Once you get your team focused and executing on that, how can you get them to expand on that, and provide for an A, B, C option that persuades the customer to buy C?  Granted sometimes that is not possible – after all, the customer is often very busy and looking for a “quick quote”.  But for longer term engagements, or more strategic buying patterns, strive to get your sales force to help their customers realize that buying the “large” really makes the most sense for them.

  • Joe Wichowski 8:19 am on August 12, 2013 Permalink | Reply
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    The art of “More Choices” with less… 


    As sales people, we often provide our clients with way too many options.  Our product catalogs are full of so many awesome offerings, and we know the customer can benefit from every single one of them.  Our proposals get bigger and bigger, trying to add value to what we are offering.  We want to make a difference, and we want them to have everything they need.

    Studies have shown, however, that this type of behavior can lead to “paralysis by analysis” during the decision making process.  Consider the following scenario:

    A mother and daughter walk up to a corner.  There, they find 2 ice cream stores: one that serves only 3 flavors – vanilla, chocolate, and strawberry; and the other that has 31 flavors to choose from.  Both mother and daughter choose to visit the store with more options – choosing from 31 flavors has to be better, right?

    However, after entering the store, they are overwhelmed with so many choices, that they spend 10 times as long picking out “which flavor” they would like.  In essence, there are so many options, it is difficult for them to decide on what is the “right decision”, so they take longer to make the choice.

    In the above scenario, had the mother and daughter been presented with 2 stores – one with 3 flavors, and another with 3 similar but different flavors, their brain actually would have made their ice cream “choice” well before they even went into the store – they would have had clear vision very early in the decision making process.

    As such, in sales we should strive to offer our clients the choices they want, but not every choice they could use (at least, not now).  By writing smarter proposals, you can help your customers make faster decisions, and be more comfortable in the decision they’ve made.

  • Joe Wichowski 8:45 am on August 5, 2013 Permalink | Reply
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    Give your clients a “Yes” or “Yes” choice… 


    Pop quiz – What does the last sales proposal you sent to your customer look like?  Are you just quoting the products that you and your customer discussed?  Or are you going further – building a second proposal, that they didn’t even ask for, providing them with “another way to go”?

    Marketing studies have shown that even when you think you are giving people “1 choice”, you are essentially giving them 2 – They can say “Yes”, or they can say “No”.  The issue lies in the presentation of the options – why not increase (or better) your odds by controlling the story?  Why not try to give them a “Yes” or a “Yes” option?

    Instead of just a single proposal, can you provide your customers with an “A” and a “B” proposal?  Its not enough to include them on the same quotation – they have to be seen as physically separate – they should be able to hold each separately in their hand.

    What if Option A is the “bare minimum” to get the client started, but Option B offers long term support, training, maintenance, etc?  What if Option A is the base tooling assembly, but Option B provides for long-term stock service capabilities to help the client decrease their costs over the next 3 years?

    By providing an A and a B proposal, the discussion becomes more of a “which one fits you best?” as opposed to a “can we execute on this single proposal or not?” – you’ve changed the conversation.  The customer is now discussing options with you (physically shifting them in their hand, A or B, as you discuss them), neither of which leads to a “No”.

    By controlling the conversation, you can change the game – and your rate of closure – all to the benefit of the client.

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