Page 34 - GBC Spring 2022 ENG

In the banking business, each bank has a range of service charge packages that run from $3 a month to $29 a month. These service charge packages can be offered at the branch by a sales professional or customers can choose the package online. Who do you think sells more of the most expensive service charge packages: the branch sales professional or the web?
The research clearly states that the web outsells the branch staff by a ratio of 5 to 1. Why does this happen? The answer is simple: you go on the bank website and the most expensive package is listed first and now the customer knows what is available and can make the right decision for themselves. When the customer goes into the branch, the staff don’t believe anyone would pay $29 for a package so they offer the lowest one first and therefore sell more of the lower cost packages while the web sells more of the more expensive packages.
The side effect of providing the lowest package first is that 12% of those customers had a service charge complaint within the first 90 days. You would wonder why a bank would intentionally irritate 12% of their customers on purpose. The answer is because the staff don’t understand the psychology of helping the customer make the right decision for themselves.
2. START ON A HIGH
The way you display a number of products matters. Is this relevant in your business? What could be the financial impact of making a simple change in the way we offer our products and display them?
Take note of this example. A number of years ago, I was advising a salesteamwhosoldpooltables.They were rarely selling any of the higher end pool tables and wanted to discuss with me how they could increase sales of their higher end tables. The first thing I noted was that the showroom
Research is clear that if you start high and then drop the price, the customer is more likely to say yes.“
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Golf Business Canada
had a random layout for the tables. There were higher priced units mixed in with lower priced tables. The first thing we did was change the layout. Wesetthehighestpricetablesatthe front and worked our way to the back by price so the lowest priced tables wereattheotherendoftheshowroom.
The change was almost immediate. The store started to sell more of the higher priced tables than they ever had before. Why did this happen? The shoppers looked at the high-end tables first and loved all the features so it allowed them to seewhatwasavailablebeforethey moved on to the other tables. This created a different expectation for the purchase than if they looked at the cheaper models first. That’s how powerfulasimplechangecanbe.
Other showrooms use a similar strategy. Leon’s, for example, organizes its showrooms from higher priced to lowest priced. In the past, different models of stoves and refrigerators were grouped together but now they separate them where the refrigerators are presented in a row and the most expensive is first in line. Stoves follow the same pattern.
This is the psychological principle of concessions. It is really the gentle art of negotiation. Research is clear that if you start high and then drop the price, the customer is more likely to say yes. The other key component of this approach is that if you show the
higher price item first, it demonstrates to the customer what is fully available and they then can make a more informed decision.
3. DON’T BE AFRAID TO ASK – MORE THAN ONCE
A number of years ago, I had an experience that prompted me to start writing my book.
I was visiting Maple View Mall and as I approached the entrance, I met a Boy Scout in his scout uniform. He was maybe 10 or 11 and had a little table set up beside him. He said, “Excuse me sir, I am selling tickets to the Boy Scout music jamboree this weekend. Would you like to buy two tickets? They’re only $20 apiece.”
I wasn’t going to be home that weekend so I said: “No, I’m going to be away.” Before I could escape, this young boy responded, “Well, if you can’t do that would you be willing to buy two or more of our chocolate bars? They’re only $2 apiece.” My immediate response was “yes.” As I was walking down the mall, I stopped cold because I had realized at that moment that something important had just happened from a sales perspective. I don’t like chocolate and this clever boy had figured out a way for me to give him money for the chocolate I didn’t even like.
This is a classic example of asking for the business. Even if the client says no, you can retreat to a