What if I told you that customers don’t like to be sold to, but they like to buy? And what if I told you that to get them to buy, you just need to create an irresistible offer?
You see, customers have this instinctive need to play it safe. Even if they are ready to buy, they are looking for the best value, usually by spending less. So how can you convince them that you’re offering them what they want? You can use a simple but powerful sales technique that’s been proven to work in my companies.
It has nothing to do with gimmicks or your sales script and it’s something you can apply today. It’s a small tweak that you can make within your offer that can convince your customers to buy more from you.
When No Is Not An Option
Now I want you to think about this when you are selling your product or service and you only offer one option. You’re leaving the door open for them to give you the response you don’t want to hear.
All the consumer can think is “Do I or don’t I want to buy this?” It’s one choice with a yes or no response. You give them room to think about whether they can afford it. If they have the budget for it. They are focusing on the price. So how do you get them to change their focus?
You give them two choices such as an A and B. Their response will be different. A long time ago at the movie theaters, they used to give you two choices. They had the large pop and the small pop.
What most people do when you give them two choices is 80 percent go for the small and 20 percent go for the large. Why? Because most people like to play it safe and they like to pick the choice that they can save money on.
So when you give your customer two choices, they aren’t so focused on whether they do or don’t want to buy your product. They’re thinking which one they want to buy. It was a brilliant strategy, but just as movie goers were just getting used to it –it changed.
Movie theatres introduced a third choice at the concession.
Watch this video about how you can convince a customer to buy from you.
Weak, Compelling, And Outrageous
Suddenly movie theatres introduced the small soda, the regular, and the large. The large, which they also call the jumbo. That’s the size that you can never ever finish, even with your kids. So now the consumer has three choices and here’s how it works.
You offer your customer the small size offer. Then you offer something in the middle and finally something that’s jumbo sized. This is what they call Contrast Pricing.
When you offer your product or services you want to make your the biggest offer the ultimate, super duper offer that is so outrageous that most people will not go for it. In comparison, you want to make your small offer so wimpy and so average that even you don’t like it that much.
But you want to make the middle one so very compelling knowing you want consumers to buy this one.
The movie theater introduced this concept and 20 percent who really like soda go for the big jumbo size. And then you have 60 percent who go for the middle and 20 percent who go for the small.
When they saw the success of this, later on, they introduced the kid size. But when you offer consumers four choices it’s a little bit too much. It’s too confusing.
So when you are making an offer, two choices is good but three choices are the best. You want to give them three choices and make the middle one as compelling as possible.
What Makes Customers Spend More
Customers don’t always look for the cheapest price. They want the best deal, so the key is to understand what the customer really wants and turn that into the compelling offer.
For example, your typical customer at a car wash just wants to wash their car. How can you ensure that they will choose one of your services?
For the first service, the first option is they wash and rinse the exterior of your car for $15. But if your vehicle is a bit dirtier, they add some new chemicals and some new shine to the exterior wash and they vacuum your interior for $25.
Now the customer is thinking for $10 more than a basic wash, you can get your car looking great for Saturday night. So this looks like the better deal.
They also remind you about your third option, the super detailing wax for $200. You decide not to go for that one because the price is too high and you just wanted to wash a little dirt off your car.
So the customer will likely go for the service that’s in the middle. And that’s the one they actually wanted to sell you from the start.
What Consumers Will Pay For Convenience
You’ve seen tiered pricing at work in your life, from green, gold, platinum and black credit cards. Sometimes it’s hard to tell the difference in options between the colors. Same with Insurance companies that have several choices in their plans and you need a table to really see the differences.
The idea is to give the customer choices. If you offer what they need, it’s not unusual for them to pay more, even for your outrageous offer.
One example is the three Flash Passes at Six Flags amusement park. Do you remember what it felt like to spend hours standing in line in the hot sun? That was probably the least enjoyable part of your experience.
Well, the Gold Pass reduces wait times by 50 percent and can cost up to $80 a day. The Platinum Pass reduces wait times by up to 90 percent and costs up to $135 a day. Maybe it’s not surprising that existing and new customers are willing to upgrade to Platinum to avoid the lines and maximize their fun time.
The tiered strategy also works the other way, by lowering the price point. Another example is Uber. It started as a ride-sharing luxury service. The traditional uberX service offers riders a midsize sedan to go directly to their destination. It was like having a limousine but without the black tie formality.
But in 2014, it launched uberPOOL which offers riders a shared car going in the same general direction. The trips take longer because of the extra pick ups and drop offs, but the price is up to 50 percent less than uberX.
It shows how the small size offer can increase in appeal. In fact, uberPOOL accounts for 20 to 50% of all trips, depending on the city. So it is possible to jumbo size your offer, or small size your offer, and still reap a benefit.
How To Apply This To Your Business
You can easily create three options in your business. It doesn’t matter what you call it: small, medium and large….or silver, gold, and platinum. You want to make a small offer that is very small. And a large offer that is as expensive and luxurious as possible, knowing that most people will not go for it. But here’s what’s interesting.
At any given time even as much as 20 percent of your marketplace will want the best offer because they want the best. That’s a huge profit margin but know that you’re not counting on this to sell for the majority of your customers.
You want the majority, the 60 to 80 percent to go for the middle offer. How do you do it? What you can do is list the features and benefits. Let’s say for the big offer you list 10 things, then 7 for the middle, and just 2 for the small offer.
Then show how the 7 things gets the customer the most value. Then you offer them the one in the middle. This is called contrast pricing. This jumbo choice is a decoy. You’re not counting on selling this. It is simply a decoy.
You see selling is about giving your customer choices. Not too many and not too little. Just the right amount. You want them to believe that it was their choice to make that purchase and make that decision.
Final Thoughts: Convincing Your Customer To Buy Your Ideal Choice
From the days when they gave customers choices A and B, to the days when they had small, medium and large, businesses had one purpose in mind. They wanted customers to buy something, not go home empty handed because they were thinking about the price.
So when you are creating your product or service, you want to have contrast pricing. You want to have a weak offer and an outrageous offer that few will buy. And in the middle, you want the compelling offer. The majority of your customers will compare the smaller offer and the biggest one, and believe they found a good deal with the middle one. But it’s the choice you wanted them to make all along.
Have you ever bought the jumbo, the large offer? Comment below.