How You Frame Choices Matters

Social scientists Itamar Simonson and Amos Tversky conducted an experiment in a 1992 study based on how we frame choices. They offered their test subjects a choice between $6 or an elegant Cross pen. Only 36 percent of the subjects chose the Cross pen. They then incorporated a third choice, a less attractive pen, and asked test subjects to choose. Only 2 percent chose the inferior pen, but 46 percent chose the Cross pen when presented with all three options.

Studies such as this have been repeated with various other products and tradeoffs. One I found particularly interesting involved microwave ovens. Subjects were given the choice between an Emerson priced at $110 and a Panasonic priced at $180. Both microwaves were on sale at one third of their regular price. Less than half of the subjects--43 percent--chose the Panasonic. Then the researchers gave subjects a third choice, a Panasonic priced at $200 that was only 10 percent off the regular price. Only 13 percent chose the $200 Panasonic, but this time 60 percent chose the $180 Panasonic.

What these studies show is that consumers frame choices differently when presented with different alternatives. Simonson and Tversky proposed that when faced with a choice between x and y options, adding a 3rd option (z) that is inferior to one of the initial options (y) will increase the likelihood that the individual will choose y.

How you frame choices for your clients matters. Are there ways that you incorporate this knowledge to help sell your product or service?

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24 comments:

May 9, 2008 at 10:26 AM Dike Drummond MD CPC said...

I market training and coaching packages and have always offered three options with any given program.

Platinum - includes the product and one-on-one coaching

Gold - includes the product and group coaching

Silver - includes the product alone or product and teleclasses

Let's assume your prospective client likes what you are doing and is seriously considering a purchase ...

If you package and offer just one option this sets up a "yes or no" thought process.

If you use three options it will set up a "which one do I like best".

That ability to choose results in higher overall sales and the majority picking option #2.

Try it out and see for yourself

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