A Quick Sales-Increasing Tip

31 replies
Hey gang,

Hope you're all well.

I wanted to hop on and share something that I've been doing quite a bit of research on for clients lately.

The idea is that less choices result in more sales.

There have been many examples of this. One Fortune 500 company offered it's employees a choice of five different 401K plans. When they decreased the options to just two, the percentage of employees who enrolled in a 401K increased by over 20%!

Too many options led to an inability to make a choice, and the employees never enrolled in a 401K.

Another example includes a national book retail chain. For one week, one of the branches tested shrinking the number of desks near the check out counter from seven to just one, and on that one there were only seven books.

For that week, overall sales rose within the store by 2%.

I was inspired to share this with you when I experienced the "choice-overwhelment" at a home goods store today. I was looking for a broom and there were a lot of choices. Not being domestically inclined, and having no idea what makes one broom better than the other, I felt overwhelmed and left the store without a broom. Later on I went into a discount store that had only one type of broom, and I bought it.

So, don't feel compelled to give your customers plenty of choices. If you're running an affiliate review site, for example, it's possible that having only three choices of products will lead to higher conversions than a site with 10 choices. Test it out.

I find it's infrequent that we actually talk marketing on here. Down to change that.

Love yas!
#quick #salesincreasing #tip
  • Expert say if you give people more than 3 options it is hard for them to decide
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    • Profile picture of the author celente
      Originally Posted by prostarprofitsdotcom View Post

      Expert say if you give people more than 3 options it is hard for them to decide
      It sure is something to test but I would say that is a fair call really.

      In terms of prices (lower priced products) We have done some testing and have found also that people do not want to pay $17 or $97... in thousands of tests, we found the sweet spot to be at or around the $47 - $67 mark.
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  • Profile picture of the author Shane N
    Great tip and so true!

    Of course, nowadays in places like grocery stores there are hundreds of choices for products that all do the SAME thing... But when it comes to marketing online I think this tip can really help, because people get confused before they get excited to see 20 different offers or payment/price options...

    Best,
    Shane
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  • Profile picture of the author Brad Kast
    Chocolate, Vanilla, or Strawberry. Uhh... just give me the pistachio.

    This post just reminded me of Corky Romano for some reason. lol
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    • Profile picture of the author ttdub
      Originally Posted by Brad Kast View Post

      Chocolate, Vanilla, or Strawberry. Uhh... just give me the pistachio.

      This post just reminded me of Corky Romano for some reason. lol
      You're making me hungry!
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  • Profile picture of the author Joseph G Spiteri
    You make a good and valid argument Laura when you thing about it logically
    it dos make sense I,m off to test.
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  • Profile picture of the author tpw
    Dan Ariely talks about giving three choices, so that you can sell more of your highest price offers. But when he gave people two choices, they more frequently took the cheaper option.
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  • Profile picture of the author Michael Meaney
    We've tested a similar theory, presenting 3 options... A basic version at a lower price, a middle option at a higher price and an advanced version at a higher price still.

    The middle version far outsold either of the other 2 versions.

    I suspect the reason for this is because people don't want to feel like they are buying a basic (inferior?) version, but also want to feel like they are getting a bargain... The middle option is the safer of the 3, and gives them a bit of a comparison.
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    • Profile picture of the author DSTeam
      Always a good idea to test 2 price points against 3, I've done it several times and the outcome depends a lot on how big is the difference between the second price point and the third one.
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      • Profile picture of the author tpw
        Originally Posted by DSTeam View Post

        Always a good idea to test 2 price points against 3, I've done it several times and the outcome depends a lot on how big is the difference between the second price point and the third one.

        This is a good representation of the Ariely scenario.

        It is more like:

        Option 1: $27
        Option 2: $47
        Option 3: $49

        In this scenario, Ariely found that most people will take Option 3.
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    • Profile picture of the author MissLauraCatella
      Originally Posted by Mick Meaney View Post

      We've tested a similar theory, presenting 3 options... A basic version at a lower price, a middle option at a higher price and an advanced version at a higher price still.

      The middle version far outsold either of the other 2 versions.

      I suspect the reason for this is because people don't want to feel like they are buying a basic (inferior?) version, but also want to feel like they are getting a bargain... The middle option is the safer of the 3, and gives them a bit of a comparison.
      Thanks for your input Mike. What order did you present the 3 options in? I see the highest price outselling the others when it's presented first. I think it gives readers the clearest representation of what they're "missing out on" if they go with one of the less expensive options.
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      • Profile picture of the author Michael Meaney
        Originally Posted by MissLauraCatella View Post

        Thanks for your input Mike. What order did you present the 3 options in? I see the highest price outselling the others when it's presented first. I think it gives readers the clearest representation of what they're "missing out on" if they go with one of the less expensive options.
        You know what, I'm a freakin idiot.

        I forgot about an advertising offer we run which places the highest priced advertising first...

        It's structured like this:

        $675 a month
        $350 a month
        $260 a month

        The $350 and $260 offers sell better than the $675.

        But I'm thinking about what Bill said and thinking about increasing the price of the $350 a month offer into the $500 a month range.
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    • Profile picture of the author WillR
      Originally Posted by Mick Meaney View Post

      We've tested a similar theory, presenting 3 options... A basic version at a lower price, a middle option at a higher price and an advanced version at a higher price still.

      The middle version far outsold either of the other 2 versions.

      I suspect the reason for this is because people don't want to feel like they are buying a basic (inferior?) version, but also want to feel like they are getting a bargain... The middle option is the safer of the 3, and gives them a bit of a comparison.
      Yep, decoy pricing.

      It's where you add extra product versions to try and get people to buy the product you originally wanted them to buy.

      When a price is listed by itself, the customer has no way to interpret the value of your offer. The only way for them to know if it's good value or not is to go off and look around at other options ie: your competitors. You don't want this happening.

      Instead you add extra versions of your own product, usually a cheaper and more expensive option, so they can more easily see which version is the best value.

      Here's a real world example of it:
      http://www.warriorforum.com/offline-...ould-help.html
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      • Profile picture of the author jeskola
        This is really interesting topic.

        In fact there was a TED talk on this very thing recently

        http://www.ted.com/talks/lang/en/sheena_iyengar_choosing_what_to_choose.html
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        • Profile picture of the author Ralph Moore
          I did some testing years ago on a number of different marketing trigger words and some of them were very interesting.

          A "standard" product is ok. No one wants a "basic" product.

          A "complete" product or system can be taken several ways as it alludes to your other products being "incomplete" and begs the question "Why are you selling an incomplete system?" It also infers that the lesser product is lacking something and can help lead the prospect to the better product.

          An "enhanced" or "premium" product is often bought by people who want the best or are not looking for a deal as much as having everything money can buy.

          Funny the power of words. Reminds me of "mind Control Marketing".
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  • Profile picture of the author johan_malmo
    Good stuff in here. Thank you for this post Laura. Sales tips are always welcome!
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  • Profile picture of the author Michael Meaney
    3 buy now buttons that went like this...

    Option 1: $27 | Option 2: $57 | Option 3: $97

    With a comparison chart in each column.

    Instead of...

    Option 1: $27
    Option 2: $57
    Option 3: $97

    So the lowest price was presented first, I haven't considered presenting the most expensive one first.
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  • Hey Miss Laura,

    Yes, this is very true. According to what I've read and heard, people have a tendency to just go with the default option rather than have to make a decision. I mean, hey, nobody likes to make the wrong decision - if there's no decision to make, there's no regrets. (I watched a TED talk about this which cited a study on organ donation... the major deciding factor between organ donor rates in Europe is whether the country has an opt-in or opt-out system. In other words, people don't even actively decide whether or not to donate organs - they just go with the default).

    Now, that said, it's not always the case. I saw another TED talk, this one by Malcolm Gladwell, where he talked about spaghetti sauce and how creating a range (chunky, spicy, etc.) increased sales because people could hone in on their preferences.

    The same thing is true with pricing. If you have a bronze package, a silver package and a gold package, you'll generally sell more because people with different budgets can get your product at different price points.
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  • Profile picture of the author ricky jones
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    • Profile picture of the author tpw
      Originally Posted by ricky jones View Post

      dear you can increase your sales through internet marketing
      it is new and fabulous concept
      you can do forum posting or link building

      Oh sweetheart, I am glad you found us after all this time!!
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      Bill Platt, Oklahoma USA, PlattPublishing.com
      Publish Coloring Books for Profit (WSOTD 7-30-2015)
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  • Profile picture of the author LegionNate
    Great post. I've been thinking about doing this. I have 6 physical items, but have wanted to test taking it down to three. The prices are 1) $350 2) $450 3) $525.

    I was going to try it this way:

    $525
    $450
    $350

    ...but maybe going cheapest to most expensive will be better. And TPW's idea of having the second two closer in price is something I might try. Maybe make it be:

    $350
    $475 ($25 increase)
    $525
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  • Profile picture of the author lucidsuccess
    Always follow up.
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  • Profile picture of the author Big Al
    With a slightly different application I've read the same about the number of pages displaying on your navigation menus for people to visit. Can't remember the source but they were recommending you didn't have more than 5 different options for visitors to choose from.

    Even Google never show all their options (eg. gmail, reader, calender etc). It's always the most popular few options and you have to expand a bar to find the others.
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  • Profile picture of the author DianaHeuser
    I have setup my website with 3 price options

    Option 1 (mobile site) Option 2 (Std Website) Option 3 (Std Website, plus Social Media plus Free Mobile site)

    Option is the higher priced one but I am wondering whether I should even be using the word "free" in there?

    What do you think?

    Di
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  • Profile picture of the author PaulyC
    Excellent point you're making here... I think another great reason to limit choices, especially within the IM niche, is that people often feel as though if they buy one thing they're going to be missing out on the others... But if you offer it all within 2 packages you will please the customers more often.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Mick Meaney View Post

      We've tested a similar theory, presenting 3 options... A basic version at a lower price, a middle option at a higher price and an advanced version at a higher price still.

      The middle version far outsold either of the other 2 versions.

      I suspect the reason for this is because people don't want to feel like they are buying a basic (inferior?) version, but also want to feel like they are getting a bargain... The middle option is the safer of the 3, and gives them a bit of a comparison.
      I was going to suggest pricing the middle option closer to the top option, but Bill beat me to it.

      Originally Posted by tpw View Post

      This is a good representation of the Ariely scenario.

      It is more like:

      Option 1: $27
      Option 2: $47
      Option 3: $49

      In this scenario, Ariely found that most people will take Option 3.
      Another example, a publishing company (can't pull the name out of the Swiss cheese), had a print version and an online version. Their offer went something like this:

      Print - $47
      Online - $67
      Print and Online - $67

      You can guess the result. Most people took the last option, giving the company both added opportunities to cross-sell and extra ad revenue.

      On product lines where there are many options, such as for Amazon offers, I've found that it can be helpful to break things into a series of stepped decisions.

      For example, if I were promoting fishing reels, I'd first ask people to sort themselves into Beginner, Casual (fished once in a while) and Serious. For each group, I'd offer three choices, at three relatively narrow price ranges. The beginner group would be the lowest, and focus on low cost of entry and ease of use. Casual anglers would be offered solid, mid-range equipment while Serious anglers would be offered the best (and highest-priced) equipment.

      Nine products, but once someone picks a category, only three choices have to be considered.
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      • Profile picture of the author tpw
        Originally Posted by JohnMcCabe View Post

        Another example, a publishing company (can't pull the name out of the Swiss cheese), had a print version and an online version. Their offer went something like this:

        Print - $47
        Online - $67
        Print and Online - $67

        It was The Economist, shown in the video above. :p
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        Publish Coloring Books for Profit (WSOTD 7-30-2015)
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      • Profile picture of the author MsMoneyspider
        For example, if I were promoting fishing reels, I'd first ask people to sort themselves into Beginner, Casual (fished once in a while) and Serious. For each group, I'd offer three choices, at three relatively narrow price ranges. The beginner group would be the lowest, and focus on low cost of entry and ease of use. Casual anglers would be offered solid, mid-range equipment while Serious anglers would be offered the best (and highest-priced) equipment.

        Nine products, but once someone picks a category, only three choices have to be considered.
        This is a very enticing option.... I like it very much
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