How Many Options to Include In Your Proposal
There are two rules for presenting your proposal: 1) include options, 2) don’t include too many options. I’ll tell you why, and what to do about it.
Full Episode Transcription:
Hello there, and welcome to another episode of the Liston.io Show. I’m Liston, and I want to help you build a better consulting business. Now, if you haven’t done it yet, do subscribe to this podcast, so you don’t miss a single episode. And, if you’re so inclined I’d love it if you’d left a review in iTunes, or even just email me directly and tell me what’s on your mind. Liston@liston.io. If you do any of those things it helps me get the word out to other people who’d like to conspire with both you and me to build themselves a better consulting business.
In today’s episode, I’m going to talk to you about jam. Not in as like what’s your jam, or what’s my jam, or to jam out or be a jam band. Actual jam that you spread on a piece of toast, and how many options is too many options to give your clients when you present your proposal. Before I get to that however, I want to thank Roberta McDonald for her question, which I’ll be answering at the end of the podcast today. Which reminds me, if you go to liston.io/podcast you can now leave a question for me there. You speak it. I’ll be playing Roberta’s question in the second half of this episode. You can leave me, essentially, like a little voicemail, and maybe I’ll dedicate a part of an episode to you, a whole episode to you. It really depends on what it’ll take to answer your question. Also, if you have any ideas about the podcast or topics for me to cover you can leave them there too. That’s Liston.io/podcast.
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So, the question for you today is what’s your favorite kind of jam? If you pick any flavor, any kind of fruit, any kind of sweet candy flavor surely you can find it in the store. If you enter a supermarket and you go to the aisle where the jam lives no doubt, you will find dozens, or even a hundred of more kinds of jam. The question is how many kinds of jam is too many? Well, in 2000, Sheena [Ienger 00:03:27], [Iengar 00:03:26]? I don’t know. I’m sure I’m saying that wrong, but anyway, Sheena and her colleague, Mark [Leper 00:03:34] setup an experiment to find out how many jams is too many.
Here’s what they did: They setup a display table showcasing 24 varieties of jam, and people who sampled it received a $1.00 off coupon. The next day they did the same exact thing, but this time they only displayed six varieties of jam. Here’s what they found. The display with more types of jam attracted more people. That was the winner, the obvious winner. Visually, more people were attracted to this display table when it had more jam. Ostensibly because they wanted to try them all. I mean, the common wisdom is that people like choice. Of course, more choice is better. That’s what we think in pretty much all aspects of our lives. Having more choices is better, but were people more or less likely to buy when there were more choices?
Here’s what they found: People who saw six jams were 10 times more likely to buy than people who saw 24 jams. Let me repeat that. People who saw only six jams were 10 times more likely to buy than people who saw 24 jams. If we agree on the idea that more choice is better, what the heck is going on here? Why wouldn’t people buy more jam if they saw more jam, and therefore were more likely to have a jam that exactly suited their needs?
Well, what’s going on is what’s called the dimensioning marginal utility in having alternatives, and that is a really, really fancy econ speak way of saying the first few choices are much more important than the next few. That’s it. So, we’re going to have more benefit from having a few choices than having five or six times as many choices. Let me put it another way. Having one choice isn’t as good as having three choices, but having 10 choices, somewhat counterintuitively is almost certainly worse than having only three.
One of the reasons for this is something called cognitive load. The more choices that we’re faced with, the more thinking we have to put into a decision the more our brains hurt, and having a hurt brain is not a good thing. Especially … Let’s bring it back to you now. Especially, when you’re asking a client to make a decision to do business with you.
There’s another point to make though, also. I know that when I go to the store there’s all these different kinds of jam. I’m a big fan of toast, and I’m a big fan of jam, and that is my personal tidbit today. But, no matter how many kinds of jam there are, I don’t go there and evaluate them all every time. In fact, I’m almost certainly going to buy either raspberry or orange marmalade. Of those two, I buy raspberry jam much more often. Now, truth be told, I am a creature of habit, so I might be a little bit different than you. Some people like more variety than others. I like a lot of change in my life, but not with my jam. That’s not one place where I would really mix things up too often. So, for me, a smaller decision set that included raspberry and orange marmalade, say only five types of jam, would be much better than showing me a hundred kinds of jam. I just don’t want to think about it. It’s too much work, which of course brings us to your proposals and the choices that you ask your clients to make.
Your proposals are a bit of a Goldilocks solution. Giving too many options can be a really bad thing. What you’re looking for is not just the one option that everybody’s most likely to choice. Although, you should do that, but what you should also do is look for what is that Goldilocks number? What is the number of options that do the best job of helping your client get additional value by understanding different way of working with you? But, doesn’t give them so many choices that it becomes completely overwhelming.
Here’s what to do. When you submit your proposals they should have options. Remember those first few options are empowering and provide a lot of additional value to your clients. Plus, going from one option to, say, three or four. It’s changes your client’s internal conversation in their head from, “Should I work with this person?” That’s what someone asks if you give them only one option, but if you give them several options they’re probably asking a question like this. “Which option should I choice?” Let me make it more concrete. If you give a single option your client can either work with you or not work with you. Of course, they have the option of negotiating, but essentially, what you’ve given them is a binary choice. Do this, or don’t do this. So, statistically, it’s a 50/50 decision, but if you give three options your client effectively has four options. Three options by which to work with you at different levels of value and the option to not work with you. If you give one option, statistically there’s a 50% chance that they won’t work with you, but if you give three options, statistically, there’s only a 25% chance that they won’t work with you.
This obviously is a superior way of doing business, but as I already showed you with the jam example, giving too many options is a bad thing. So, just because three is better than one doesn’t mean 10 or 20 is better than three. So, here’s what I recommend you do. Present three or so options so your client can make a clear decision. There should be clear differences and concrete reasons why people would choose one option over the others, and there should be a clear escalation in value. In this case, when I say value I mean the value experience by your client and also your price. So, your price should be more in option two than it is in option one, and it should be more in option three than it is in option two. This helps your client make an informed decision.
I’d also suggest you package your offering based upon the clients situations you most encounter. Who are those people who need just a little bit of help from you? What would go in that package that you present to them? Who are those people who need kind of an average amount of help? That would be your middle option, and that’s how you would package your service. Then, who is that rare group of people who need a lot of your help, a lot of your time, and want to pay a really high price for much more? That would be your top tier.
One thing to remember is people are most likely going to be pushed into the middle. So, on average more people will choose that middle option. So, you’re going to want to focus on packaging that middle option, and then creating a smaller and a higher option that relates to the middle option. If you’re packaging your services I’m not sitting here worried that you’re going to go out and create 50 packages. What I am worried about, honestly, is that you go with kind of a menu, a really long menu that has 20 or 30 different service lines that you offer, and you present that in a proposal and allow your client to choose.
There’s a couple of reasons why that’s a bad idea. One is it’s easier to sell six kinds of jam than 24 kinds of jam. We’ve already established that. The second is, if you’re already bought into my motto, serve, don’t sell. Then part of your service is to help your client decide what is the best path forward and what is the best way to work with you? Part of your job in creating these packages is to give your clients clear direction on that best way to work with you. So, you should create infinite options or infinite permutations of ways to work with you. You should create a reasonable number of prepackaged options that work for your client. I mean, of course you could give them your giant menu of all your services, and you may even attract more people to your booth, but you know for sure you’ll sell a lot less jam.
Now, I’d like to turn to a question that came in through the website Liston.io/podcast. You can go ask me a question there now, and it came from listener, Roberta McDonald. She listened to episode 12 where I suggested to never, ever, ever in any circumstance send a proposal over email prior to presenting it live. There are lots of reasons why I recommend doing it that way, but if you’re not sure why go back and listen to episode 12. There’s also a companion episode 11, where I talk about when to write that proposal in the first place. But, Roberta made the mistake of sending the proposal over email prior to presenting it, and hears her question.
Hey, Liston. Roberta McDonald here. I’ve been following your work on LinkedIn and really appreciate everything that you’re putting out there for us hungry consultants. My question to you is when you do actually make that error, that mistake how do you recover from it? I mean, I do want to followup with her, but I also don’t want to appear desperate because I know that’s a bit of a death knell as well.
Great question, Roberta. Thank you so much for asking it, and here is some advice for what you can do when you get ghosted. First of all, there’s not a whole lot you can do, other than attempt further contact. The question is how do you communicate with this person knowing that they have cold feet, or there was something wrong. Basically, if someone becomes non-responsive it’s telling you that there was not enough trust built, or not enough value demonstrated in the first place, and that’s why they’ve just disappeared on you. So, you have a pretty big problem here. The problem was bigger than you thought it was prior to writing that proposal, which is why of course, I don’t want you to write the proposal until you get verbal agreement, and you’ve dealt with any other reasonable objections that you can find.
But, to your question. You want to do what do you do now. Here’s what I would recommend. Number one, pick up the phone and call them. If you continue to send emails to people it’s very easy for them to ignore you, but if you call and talk to the person they can’t just ignore you. Right? They’re in the moment. It’s not so easy to ignore a real live human being who’s expecting a response from us. If they don’t answer leave a voicemail, and don’t expect them to call you back. You’re going to have to call them again. So, I would do that a couple of time until you get ahold of them. In the beginning, maybe skip the voicemail part, just call them one, two, maybe three times to see if you can get ahold of them, and then resort to a voicemail and step down your communication.
The second thing you can do of course, is send an email. Now, this didn’t work when you sent the proposal, so I wouldn’t expect a response when you’re sending an email asking about the proposal. So, what you’re going to have to do is try to stand out of their inbox. One of the ways that I would do that is to acknowledge the situation and just say something like, “Hey. I’d love to chat again. I know I must’ve missed the mark terribly and written an awful proposal that you didn’t want to see or talk about. I totally get it. What can we do?” Definitely use some humor if you can, but you’re going to have to really grab their attention in order to get a response at this point because for whatever reason they don’t feel comfortable talking to you again. Usually, my guess is, the main reason most people will not feel comfortable talking to you again is because they don’t want to reject you to your face, or in a direct two-way synchronize conversation.
So, if you give them permission that it’s all right that you’ve been rejected and that you acknowledge the situation you may be alleviating a lot of the pressure that they otherwise would feel, and the baggage that they would bring into that conversation. That could be one tool that you use.
Another thing you can do is set up a ghosted campaign. So, if you have and email tool … I use Mixmax. I’m a huge fan of it. I can go in and setup, say, as many emails as I want, and add someone to a campaign that drips out to them over time. So, maybe I send them three or four emails over the course of a month, and then one email every quarter for the next year, and just kind of either check in with them, which it’s not a good idea to say, “Hey, just checking in.” So, don’t do that. You can be more creative than that, but give them a piece of content, something that you found online. Of course, I have this podcast and my Linkedin videos and lots of other things. So, there’s lots of ways I stay in touch with people, but give them something valuable, and you can continue to do that, but in an automated way. That may be helpful.
Then lastly, of course, the last thing you could do is just write them off. You can just move on completely. Now, if you really wanted to work with this person I would put in a little bit of additional effort to try to recover the conversation, but I think you should know it’s unlikely that, that’s going to turn them into a client immediately. You’re goal now, after you’ve been ghosted when you send that proposal, shouldn’t be to win the contract. Your immediate goal should be to restart that conversation but when they’re not responding to you you’re not in an active conversation, which means you’re not in a relationship. In all consulting, like it or not, is a relationship business. Relationships come from conversations. Therefore, no deals come without conversation. If you’re not in a conversation you can’t even get to the relationship part.
So, try to restart that conversation, focus on that part of it, and Roberta I hope, deeply, that this helps. It happens to everybody. It happens to me. It happens to my clients. What you want to do is try to eliminate, as much as possible, the risk that you’re going to send a proposal that you’re client doesn’t feel comfortable talking about. Of course, the next time you do this, when you present live you’ll obviously have a chance to see how your potential client reacts to what’s in your proposal and you’ll have a chance to correct it on the spot. So, Roberta thank you, again, for sending in your question. If you have another one, or if anyone else listening to this, if you have a question you can now go record a voice message for me at Liston.ioshow/podcast.
Thanks again for listening, and I hope you have a fantastic day. Bye.