One Change in Your Sales Offer Can Make You 30% More Profit Instantly

Using Behavioural economics To Increase Sales

In the course of my reading around the subject of sales, I always look to find new and innovative ideas to make a difference to my clients. One of the most fascinating areas that has emerged in the last few years is that of behavioural economics. One of the leading lights of this new science is Dan Ariely and his fascinating book, predictably irrational.

Dan has opened my mind to so many ways of making small changes in the ways my clients promote their business. Although the changes are small the results are massive. Here are some golden nuggets for you:

His scientific tests have shown that humans rarely choose things in absolute terms. We don't have an internal value meter to tell us what something is worth. What we tend to do it focus on the advantage of one thing over another, and use that to estimate value.

If we are forced to think between options there is a risk we will just give up. Therefore options that are perceived to be no brainers will increase response rates dramatically.

Examples:

High Priced entrees on a restaurant menu will boost revenue, even if no one buys them. Because people will tend to order the second most expensive meal and this gives them something to compare it to.

The Economist offered a subscription that caught dan's eye so he decided to replicate it in an experiment to find out how powerful the technique was. A hundred people were offered the following choice:

1. Internet only subscription $59 2. Print only subscription $125 3. Print and Internet subscription $125

How many do you think took up each offer?

It was 16, 0 and 84. Therefore 84 people went for the no brainer $125 subscription because it was perceived to be such good value when compared to the other choices.

Intrigued, Dan replicated the experiment but this time with only two choices- as follows:

4. Internet only subscription $59 5. Print and Internet subscription $125 This time 68 people chose the internet only option and only 32 chose the print and internet subscription. Down from 84 in the previous test. If you do the maths that's about a 30% drop in revenue from every 100 subscrbers - simply by taking away 1 option.

Your action point is to see how you promote the offers in your business. Are they all no brainers? If so find out what you have to do it and make it happen.