The Three Boxes
A much smarter way to sell..
Universally, one of the single most common motives of starting a small business is to make money. And to do that; especially from sales; you would need your customers to buy from you more often.
You may be familiar with this idea in one way, or may be completely new to it. Either way, let me introduce to you a simple, yet, very powerful and proven sales technique.
This technique usually has a lot to do with your kind of offer, but start by thinking about it this way:
Let's say you run a small business where you sell a kind of product or a service, and all you've got is just one option, or one type of product. When a customer looks at your offer, all they can think of is, “Do I want to buy this or not?”
Because there's a limit, a lack of options, it is a Yes or No kind of decision. So their focus is only on whether they can afford your stuff or not.
However, if you present two choices; like an “A” and a “B,” customers start thinking beyond the price and start edging towards deciding to make a choice.
Imagine going to a movie theater in 1980s America, and you wanted to a soda. Generally, they’d give you two choices: the Small soda and the Large soda
And since humans are risk-averse by nature, and would want to pick a choice they can save money on, most people ‘play safe’ and go for the small soda
Mathematically, about 80% people goes for small soda, 20% goes for the large.
What's beautiful about offering two options is that between the two choices, the customer isn't solely focused on “Do I want to buy this or not?” Now they're thinking of making a choice, “Which can I afford? Which do I want to buy?” That small mindset shift changes everything.
Now, imagine also, that the movie theater decides, and introduces a third choice.
So there is the Small soda, the Regular soda (which used to be the old large), and the Jumbo-sized one (looking so huge and intimidating that the first thing someone would think after seeing it is, “Whoa!... This BIG... I can never, ever finish it; even with a family.”)
The whole point of this is to make customers see the Regular soda as the perfect choice.
Furthermore, when you offer your customers three choices, you introduce what is known as “contrast pricing.” By giving only one option, your customers compare you to competitors. But by offering 2 or 3 options, customers compare you to YOU.
So, by using contrast pricing, in most cases, movie theaters have 20% of buyers, the soda lovers, go for the big soda. 60% go for the regular. While the final 20% who are price sensitive go for the small one. That's human design.
(Though some movie theaters go as far as introducing a fourth option,
I personally believe two choices are good, three choices best. The fourth one brings in kind of a confusion; making it hard to make a choice.)
Another popular example of The Three Boxes in practice is the car washes. They also use this technique very well.
You take your car to the car wash, and they give you three choices:
You can just “shampoo” the exterior of your car for 15 dollars only.
You can also have your car's exterior shampooed, the interior vacuumed with a nice perfume after, and also have some new shine added; only for 25 dollars.
Most customers might have already started thinking, “All for $25? Well, for just 10 more dollars to give my car a nicer look; both on the inside and the outside; I'd take that.”
The final offer is usually the most detailed and intense cleaning; but it costs more. $200.
Most people will readily reject that one. The price sounds so crazy and more expensive compared to the other ones listed. But since you wouldn't want to be so foolish to pay so much, or so cheap as to go for the very least, most of the car owners simply just go for the one in the middle. For them, it's about getting the best for less. For the car wash guys, that's the whole trick! That is exactly what they wanted to sell you!
So, How can you apply the Three Boxes?
As I stated earlier, Three Boxes has a lot to with your kind of offer. If you have at least 2 or 3 different offers, it is an ideal one for you.
When pricing your different products, services, and offers, intentionally design them.
Make the cheap option feel limited, the premium one feel extreme, and the middle one look like the smartest deal in the room. That’s the one you actually want to sell.
Selling is about choice. Smarter selling is giving your customers choices. Not too many, not too little, just right; while letting them believe it was their choice to make that purchase.
P.S: What are your thoughts on the Three Boxes?