Grow Your Business with Bite-Sized Options

Getting new customers can be hard. Finding really good customers — top-tier customers — is even more difficult. That’s because, while people like the idea of choices and options, in reality, they fear risk. People actually dislike trying new things. It’s much easier for most people to do nothing than to chance something.

It’s easy to see why this dynamic is frustrating for business owners. As business owners, we know, logically, that the downside of trying something new is usually pretty limited. If you don’t like your choice, you can just revert to your previous behavior. Easy, right?

Conversely, the gains achieved when trying something different (like our product) can be huge. Upgrading or improving your life can have all kinds of residual benefits. You know that if your prospects would just TRY your product or service, they’ll find that they are solving a big problem or having a much better experience.  

But the fact is that people are creatures of habit. They don’t like to change or try or experience new things. How habit-driven are we? Some studies estimate that more than 47 percent of our behavior is based on pure habit. People are hard-wired to keep doing what they’ve done before, and they just don’t like trying new things.

 The “Good Enough for Now” Syndrome

As a business owner, you have to fight against the power of habit. And you need to remember that a person can’t become a new customer unless you are able to change a habit. Most people feel that what they are doing now is good enough, and they avoid change.

In business, that’s why we love to talk about “pain points” and why I talk a lot about turning complaints into profits…because people who are uncomfortable are more likely to change.

People know the risks and rewards of their current choices. Conversely, the benefits you are promising — even if they are large — are uncertain. Unless your customer has self-identified paint points, your competition represents a choice that is “good enough for now.” You represent “risk.” The reality is that many of us are not combatting competitors who are horrible. We are up against competitors who are just okay and “good enough for now.”

Easy to Try, Easy to Buy

If your customers’ current options are good enough, you’ve got a challenge ahead of you. To get them to try something new means that trying your product must be simple to and risk-free. That’s why the most successful businesses create fast, easy ways for people to be impressed with their products and services. In the business world, we have many terms for this—trial offers, flexible consumption, self-directed decisions—but the core concept is the same. Make it easy to try, and then make it easy to buy.  

Flexible consumption means that you create as many paths to value as possible. Make it easy for your prospect to try you and to say yes. How does this work? Consider the model many gyms use. In a perfect world, they want people to commit to one-year memberships. That’s because one-year memberships represent regular, dependable revenue. It’s a profitable model for gym owners, but a scary proposition for consumers. Big commitments scare people away.

That’s why more and more health clubs have replaced year-long memberships with month-to-month fees. While monthly fees are usually a bit pricier for the consumer, in the long run, they work because people are committing to just one month at a time. A.K.A., less risk.

 Some fitness centers even allow people to purchase one-hour passes. Of course, one-hour passes are much more expensive over time than monthly commitments or year-long memberships, but they represent very little risk. People can try the facilities as many times as they like, and each visit presents another opportunity for business owners to upsell.  

Some gyms have even adopted a hybrid version of this model. They may offer the choice of one-hour passes, monthly commitments, and year-long memberships. But they offer a menu of specialty add-ons, like boxing fitness classes, personal training facilities, or muscle massage services that require a separate charge to use. These clubs then bundle those premium offerings into a high-value, one-year membership package, giving gym users even more reasons to invest in the annual plan.

Offering a portfolio of choices allows consumers to make self-directed decisions. They choose the level of commitment they are comfortable with, and they then make additional commitments as their trust increases.  

The Power of Smaller Commitments

Sometimes you have to remove all obstacles to get people to try. That’s why more and more companies, especially new services, give people something for free. Some of the most innovative businesses around offer free trials. Thinking about getting Netflix, Hulu, Amazon Prime, or YouTube TV? Sign up for a free trial first. You’ll get 30 days free, and you can cancel at any time. Of course, you give them your credit card before you get the free trial, and it’s up to you to remember to cancel. Easy to try. Easy to buy.

These services are eliminating the risk to the consumer by offering their service in smaller modules. People try their service for 30 days, enjoy it, and if they don’t cancel, the service continues. None of these services require long contracts. (It’s interesting to note that Amazon Prime originally required an annual fee but reverted to the monthly membership model. Even the largest retailer in the world has embraced the power of bite-sized commitments.)

 This also works in the world of hard goods. For a shelving company, I suggested they give prospects a free sample-sized shelf. That company wasn’t excited about giving things away. But at the same time, they employed a team of people that did nothing but create free estimates—another type of giveaway. It’s important to get comfortable with these types of investments to facilitate bite-sized commitments. To attract new people into your sales funnel, look for the kind of interim steps that will lead your prospects down the path of trial, evaluation, and eventual conversion.

Qualify Your Sale

Taking one step back, I want to emphasize that whatever you choose as your trial/bite-sized product, it must be a qualifier to a bigger sale.  

For example, a one-hour pass to a gym is not valuable to someone who hates working out. A free sample shelf is unappealing to someone uninterested in home improvement. If people are uninterested in your product or service, they will turn down these kinds of freebies, but that’s okay. You’re looking for qualified customers.

In an effort to get more people to opt-in, some companies move toward universally appealing gifts like a $50 Visa Card or a dinner for two. These kinds of giveaways appeal to everyone, and you will get more people to opt-in, but they will be less qualified. When you offer something everyone wants, you’ve lost sight of the purpose of smaller modules (converting to an eventual sale.)

Tiered Options Create Desire for the Big Sale

If you are thinking about creating smaller modules, you must create them in ways that create desire for more, bigger, better, more premium. Create a good/better/best tier. For example, some upscale car washes offer washes, interior cleaning, waxes, detailing, and even oil changes. All of these services are available to everyone à la carte. (Good) 

But these car washes also offer monthly (automatically renewed) passes for unlimited car washes. Often monthly customers have their own “no wait” lane into the car wash. If you buy a monthly pass, other services are still extra, but at a slightly discounted rate. (Better) 

These car washes also sell a premium monthly bundle that includes unlimited car washes, unlimited interior cleaning, and one detailing per month, with half-price oil changes. (Best)

Airlines are another good example of tiered offerings. They offer economy (good), business class (better), and first class (best). First class is sometimes 6x the price of economy, so airlines work hard at communicating the value of this substantial upgrade. Economy class (and business class) passengers watch first-class customers get on first. They must walk through first class’s spacious cabin to get to their seats at the back of the plane. And when everyone is seated, a curtain is pulled to close first class off from the other passengers.

 But first class is quite an upgrade for some people, and price-conscious passengers often ignored the option. That’s why, In recent years, airlines started offering the ability to upgrade your flight when you check in. If there are seats available in first-class, you can sometimes upgrade for $100 or so. This is another type of bite-sized trial. While it’s quite a deal to get a first class seat for only $100 more than your economy price, airlines know that offering upgrades for unsold seats is a way to continue to promote the value of the first class experience.

How Can You Make Your Business Bite-Sized?

Smaller sales, trials, and good/better/best tiers reduce risk for customers. These bite-sized offerings make it easier to try a new product or service and help you lead customers from consideration, into trial, on to upselling.  

Thinking about how to bundle your products and services into smaller modules is smart. Creating a path of commitment, from good, to better, to best, is also an effective way to attract customers to the kind top-tier options that provide the most dependable, repeatable revenue.

Take another look at your industry? What kind of qualifying offers can you create? What premium experiences can you offer to high-value repeat customers? With a little time and creative thinking, you’ll be able to use bite-sized options to grow your business.