Skip to main content

Options for Sales – Lessons from Retail

One of the most important sales lessons I learned from my retail days when I was younger was the concept of options. Specifically, I was taught to offer no more than 3 options. As long as the options fit what the customer was looking for (or at least fit by some prioritization of features), 3 options drove customers to buy. Anymore and you risk of overwhelming customers.

Today, this is still true, too, in B2B sales. I’m using a similar offer of three options in everyday life, even. Though, in my current role, I am not offering three products. I am providing three options to get an advancement of a sale.

Curious about where this Rule of 3 came from, I did a little research and found a study between professors Sheena Iyengar of Columbia University and Mark Lepper of Stanford University – “Why Choice is Demotivating”.

In the study, Iyengar and Lepper provided samples of 6 or 24 flavors of jams or chocolates to passers-by. With 24 flavors, 60% of people stopped to try the flavors, while only 30% stopped when shown 6 flavors. Clear winner for flavors, right? Not exactly.

When the researchers looked at who actually bought, only 3% of those provided the 24 flavors made a purchase compared to 30% who were shown 6 flavors. When you shake out the numbers, fewer choices drove more than 6 times the sales.

I’m not sure where 3 came from, however, providing options (and few of them) drives sales. Providing options provides confidence for the customer. It provides a sense that the sales professional knows the customer’s needs. Too many, then, overloads the psyche – we can only remember “3 data points” before degrading.

Remember when sell or getting commitments – provide options, but stick to fewer.

Comments

Popular posts from this blog

Vertical SaaS? Horizontal SaaS? It’s All News to Me

Not sure why, but I have only recently heard of a term called “Vertical SaaS”. Okay, there’s also “Horizontal SaaS”, too. Based on some light research, looks like vertical SaaS is also a growing trend and the number of companies fewer than horizontal SaaS providers.
Vertical SaaS borrows its moniker from the concept of vertical integration whereby there is more control over a supply chain from raw materials to point-of-sale. Here, vertical SaaS companies focus on a niche market (industry) offering a solution that enables more process control.
Horizontal SaaS providers get really good at a particular offering, and widen their market to reach scale. Their focus is on breadth of market, and thus, its sales and marketing strategies can require more resources.
Many vertical SaaS companies (such as Veeva Systems, Guidewire, Fleetmatics) are doing well usurping legacy systems of traditionally slow-tech-adoption industries. Here, vertical companies develop a best-of-breed product, and focu…

My Life-Defining Moment Happened When I Failed to Make Varsity in High School

Ever stop to think about who you are? What makes you tick and tock? How about what you truly enjoy and what you’re good at vs. not good at? Or what/ who has shaped you into the person you are today?
I’m at this stage of figuring out whether to continue independent consulting while iterating on ideas for the next startup or take on some full-time employment (consulting, product management, or otherwise). My recent post about my daily/ weekly schedule was an interesting exercise in stepping back and recognizing what I’m actually doing in a day, and made me really think at the macro level.
In one of my recent reflections, I thought about defining moments in my life. One of those watershed events that truly transformed me was my failure to make the Varsity soccer team in high school. I won’t rehash the whole story here – shared the story almost a year ago in my post titled “Getting Through Dark Moments and the Most Vulnerable Story I've Ever Told Publicly”. It’s this moment that I w…

Role of A Startup Advisor

Over the last year or so, I have become an Advisor for a couple startups. It’s been a great experience for me to teach and continue learning as an entrepreneur. I do meet with several startups and entrepreneurs weekly, but not officially as an Advisor save for a couple.
During (and especially after) Body Boss, I realized the importance of having Advisors. Advisors help startups and the executive team navigate the go-to-market waters bringing specific experience to the table – industry, technology, etc. With that comes connections, too.
The role of a startup Advisor includes: Guiding the startup on its directionProvide valuable insight into the industry, competition, market, etc.Share connections to move the company forward – prospects, new hire candidates, otherEstablish cadence around metrics for progress In exchange for devoting time and attention (and reaching success, hopefully), startups typically provide stock or cash to Advisors. This ensures both parties are aligned on objecti…