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

PowerOf3

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.