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One Change in Your Sales Offer Can Make You 30% More Profit Instantly
| Guest post by: Peter O'Donoghue |
Article Overview: The new practice of behavioral economics shows how one small change to a pricing offer increased sales by 30% instantly. Without any time, effort or work. Would you like that to happen in your business?
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Free Download - Sales Prospecting Techniques - Should You Be Using Twitter for Selling to Businesses? By Peter O'Donoghue |
One Change in Your Sales Offer Can Make You 30% More Profit Instantly
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 subscribers - 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.
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About the Author: Peter O'Donoghue RSS for Peter's articles - Visit Peter's website Sales Blog Click here to visit Peter's website   How To Win New Business |
Related Forum Posts
Online Sales and Marketing vs Traditional
- Hi Evan,
I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing
Re: Online Sales and Marketing vs Traditional
- [quote="ltrahan":31w9r2iz]Hi Evan,
I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing[/quote:31w9r2iz]
I second the request...
Re: Quote of the Day - "The only people witho
- Thanks for sharing this Evan, there are some very powerful quotes in there, I particularly like this one:-
You are now at a crossroads. This is your opportunity to make the most important decision you will ever make. Forget your past. Who are you now? Who have you decided you really are now? Don't think about who you have been. Who are you now? Who have you decided to become? Make this decision consciously. Make it carefully. Make it powerfully.
regards,
Mal.
Re: Finding AND Keeping Good People
- Employee retention or as you mention “Keeping the Good People” is one of the biggest challenges for any growing business. It takes a huge effort from the entrepreneur’s end.
I can come up with the following when it comes to KEEPing the good people-
1. Motivation of the employees
2. Recognition of the needs of the employees
3. Activities to make the employees feel valuable towards the organization
4. Make benefits more accessible
5. Offer profit sharing incentives
6. Create clear career paths at the company
7. Consider telecommuting, job sharing and other flexible working arrangements
8. Incentives are essential and they don't have to be huge
9. Have other managers praise an employee's work
10. Be sensitive to the balance between work and private life
Re: Ideas on Using Twitter for Business
- I would like to add:
Provide support through Twitter
Offer giveaways + contests
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