Choosing is Painful

By Lawrence On October 26, 2010 · 68 Comments · In Marketing, Pricing Strategy

Note: FREE seminar details below

Why is it that committing to a decision so difficult? Well, there are a number of reasons, but the following is the main one.

Opportunity cost.

Think about it. Why is America’s divorce rate so high? Committing to one means that you cannot have others.

Commitments Mean Sacrifice

What all of this means is that when you commit to, let’s say, a tamale at Acapulco, it also means that you potentially lose out on having a scrumptious bite of burrito, enchilada, taco, quesadilla and much more! Choosing is painful because you have to sacrifice.

Most people experience something called “loss aversion,” which means that people fear losing out on something. In essence, we hate making the wrong decisions because of the sacrifices we have to experience with that particular decision.

This is the reason why buffets or sampler platters are so popular. We get the option to have some of everything, even if we don’t exercise every option.

A good example would be a personal experience when I went to eat at a café with a friend.

I asked my buddy, “Hey George, what did you order?”

Without even gazing up from playing a game on his cell phone, he responded, “It doesn’t matter. Just know that it’s better than yours.”

With a smirk, he added, “But don’t worry, I will feel the same about yours.”

When posed with choices, we choose whatever is best at the moment understanding that we will experience buyer’s remorse afterward (temporarily). This sounds very much like the saying “the grass is greener on the other side,” huh?

This is very common when you see a server walking by with a delicious entrée that you did not order. That is another case of loss aversion.

Balance in Choices

Understanding this difficult process, Bing (Microsoft’s new search engine) branded themselves as the “decision engine” rather than another “search engine”. Knowing that making decisions is not an easy task, Bing tried to label Google as nothing but a daunting wall of options.

What they did differently was simply remove some text choices. They narrowed the search results and added other benefit-based options such as map results, price comparisons and one-click previews (such as a sample of a song) rather than just search results.

Their perspective is that the less choices they give you, the faster and less painful it will be to make a decision. That makes sense.

Following Bing’s logic, we need choices, but not too many. How many is too many? How little is too little?

More importantly, how can we craft our packages in such a way that would encourage our customers to choose us painlessly? And ultimately to pick the preferred package?

Not only are you a competitor amongst competitors, you are a competitor to yourself.

Why is this Important?

The ease of choices makes commitments feel less frustrating. So, let’s imagine that there were two very qualified wedding professionals. Everything about these two are comparable.

However, one of them has a very complex packaging system where users have to commit to a package, and then pick the album [and covers], and then choose the hours, afterward and…forget it.

The complexity will stymie the customer’s commitment process. To be honest, most customers don’t know what they want.

It’s just as how I learned to “want” some suggested luxuries (like seat warmers) when shopping for a car. And I didn’t even know about the what-cha-ma-call-it before today, but I want one of those do-hickeys now.

If customers can’t see the value difference clearly between your packages [if you even have any], then you will never be the victor.

Seminar

I know this sounds very text-book’ish and you still haven’t walked away with solid usable and applicable knowledge. I know. This is important. Soon I will release some very cool posts.

Next week’s chapter: Discounts – wickedly good article, promise.

I’m nearly finished with compiling all of this info, but want live feedback. I’m opening up a FREE seminar.

November 8, 2010 at 1PM – LA/OC
(I haven’t settled on the class size yet, so if anyone has a big studio they graciously want to lend, I’m very appreciative.)
Understanding the Psychology Behind Pricing and Packaging

Next steps…

Want an invite? Comment below – using the blog form (not Facebook) – your name, where you’re from and why you want to attend. I will email you details for seminar.
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