What Choice Architecture Means for Sales Professionals
In a 1909 meeting, Henry Ford famously remarked that customers could purchase the popular Model T in “any color so long as it’s black.” This enduring quote perfectly illustrates what it means to be a “choice architect.”
Sales professionals in the early 1900s were thrilled with the rising demand for the Model T. Wanting to sell more, many dealerships requested that Ford increase the line to include more colors, but Ford protested:
“It is strange how, just as soon as an article becomes successful, somebody starts to think that it would be more successful if only it were different”
He kept the customer’s options limited and offered only black.
The result: Ford sold 15 million Model T cars, the largest production run of any vehicle at the time.
A choice isn’t always a luxury; sometimes it’s a burden. Much of the Model T’s success stems from how easy it made the decision process.
“The way a choice is presented influences what a decision maker chooses,” according to research in the Journal of Marketing Research. Those who understand this idea and use it in selling interactions are choice architects.
Here, we look at a few tenets of choice architecture and how sales professionals can use them to their advantage.
Balancing Options and Cognitive Burden
We’ve moved on from the early days of the Model T. Competitors are everywhere, and customers need options.
For the sales professional, this customer expectation involves two considerations.
- First, the sales professional with a greater number of options has a better chance of matching the customers’ needs.
- Second, however, with more choices comes a greater cognitive burden for the buyer.
Researchers suggest that when asking this question, sales professionals should consider three things:
- The willingness of the decision maker to engage in the choice process
- The decision maker’s satisfaction with the decision process
- The nature of the process that will be used to make the decision
Because buying decisions often involve numerous stakeholders and diverse needs. Therefore, it’s best for the sales professional to focus on as few choices as possible while still meeting the customer’s needs.
The researchers suggest just three or four choices.
Balancing Short- and Long-term Choices
Choices have implications for the present and the future. However, “individuals tend to be myopic and prefer to receive positive outcomes early,” explain the researchers. This favoritism for short-term results is understandable; many customers don’t know what the future holds.
Making a decision with regard for the future requires more assumptions, which carry uncertainty. Moreover, further research shows that when making these assumptions, most of us anticipate unrealistically positive future outcomes.
Sales professionals often see these characteristics unfold in the customer’s decision-making process. The problem occurs when these difficulties lead the customers to defer difficult decisions.
Eventually, the deal languishes, and forward movement stops. Sales professionals can help customers overcome this problem by helping them consider second-best outcomes. This exercise helps clarify what future results will hold.
Additionally, “placing limited windows for opportunities can overcome the tendency to think that the future holds more resources,” explain the researchers.
Sales professionals need to underscore the risk associated with not making a decision. Standing still carries a cost.
Simply put: connecting the choice to the expected outcome helps customers move through the buying process.
Balancing More Guidance and Less Guidance
Some customers have strong intrinsic preferences; others have mild ones. Understanding which one the sales professional is engaging matters because of “partitioning.”
When a sales professional breaks a decision into numerous attributes, they’re partitioning. Doing so is important when positioning solutions to customers with mild intrinsic preferences. This group likely seeks more guidance. Sales professionals can fulfill this need by creating a decision process around the attributes that they believe are best for the customer. That is, any customer decision is essentially a choice on how to allocate a limited resource (e.g., money).
However, most people are biased towards allocating resources evenly across the available choices. Therefore, sales professionals, acting as choice architects, can help guide customers by limiting or expanding the choices made available to them.
Consider the example of a financial sales professional who wants to guide the customer towards a long-term investment solution.
They can offer more sub-categories around attributes like cost, dividends, and annualized performance while combining less important attributes, like one-month return, into just one category.
We live in a noisy world with an ever-increasing array of options. The sales professional’s job is not to impress with a vast list of possibilities.
Instead, they must listen to the customer’s needs, then deliver a carefully curated, concise list of options designed to steer them in the right direction. Keep options limited, connecting the choice to the expected outcome, and limit the less preferable choices to just one category.
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