Share on Pinterest

Offer Less, Raise Your Price and Still Get More Business...

Tuesday, June 2nd, 2015 by Charlie Hutton,

Jun 02
getting more business

Categories: Getting More Business

Share on Pinterest

According to a new study less is often perceived as being more and more is often perceived as being less. Sooooo you can offer less, charge more AND still increase get more business (sales).

Sounds good right, so let’s give an example:

You have a great £200 services with incredible reviews online that solves on a very big problem. You also offer a bonus £17 product along with the service to boost sales. Ironically, that £17 bonus could actually be costing you sales.

The reason is because of “Presenter’s Paradox,” and it goes something like this:

Perceivers’ judgments show a weighted averaging pattern, which results in less favorable evaluations when mildly favorable information is added to highly favorable information. In other words, including mildly favorable information in your presentations actually LOWERS judgments from the evaluators’ perspective.

3 professors conducted several studies to test this theory. In the first test, they either bundled an iPod Touch MP3 player with 8 MB of memory and a cover, or the same iPod Touch MP3 player with 8 MB of memory, a cover and 1 free music download.

Participants in the study were then shown one of these packages and asked, “Please estimate how much you would be willing to pay for this.”

Result?

The participants were willing to pay more for the smaller package that contained only the iPod (m=$242.19) than for the larger and economically more valuable package that contained the iPod plus the free music download (m=$176.71).

In the next test, subjects were asked how much they would pay to stay at a hotel with a 5 star pool, versus a hotel with a 5 star pool and a 3 star restaurant.

Result?

Participants seeing the ad featuring both the 5 star pool and the 3 star restaurant were willing to pay significantly less per night (m=$92.45) than those seeing the ad featuring only the 5 star pool (m=$108.80).

See how this can help you get more business yet?

In another test, a $750 fine for littering was seen as being more severe than a $750 fine plus two hours of community service.

And in yet another study, a scholarship for $1750 was seen as being more valuable (and made the winner more happy) than a scholarship for $1750 plus $15 for textbooks.

To be clear, in each study participants saw only one option and were asked to rate that option and say how much they would pay for it. They were not given a choice between the 2 different options.

So why exactly did the test subjects assign a higher value to the packages that contained less?

The researchers believe that people subconsciously “average” the items in a package. Thus adding something small to something big results in a lower average and a lower perceived value.

So what does this mean to you when it comes to getting more business?

First, present only the truly great things about your product or service.

For example, if you’ve got a piece of software that does 1 mind-blowing thing and 5 ordinary things, only talk about the 1 mind-blowing benefit.

Second, consider NOT bundling lesser items in with your larger item. If you do, present them as entirely separate bonuses that do not reflect the value of your main offer. And test your offer with and without the bonuses.

Third, if you are giving a presentation, reduce your points to just the exceptional ones – leave out the more mundane information. The audience will remember what you say as being more important and persuasive than if you try to cover every point.

Read the full study here:

http://www-personal.umich.edu/~smgarcia/pubs/presenters_paradox.pdf

Download’able Quote Card “Offer Less, Raise Your Price and Still Get More Business

get more business

Cover Photo by Dave Fayram and covered under Creative Commons

Share on Pinterest
Read previous post:
get-more-clients
Get More Clients To Buy : “I Think” or “I Feel” – Which is More Persuasive?

When trying to get more clients to buy, choosing the right words to use can be the difference between closing...

Close