Jun 24, 2008

Is It Better To Have More Products For Sale, Or Less?

Mike Dillard from Magnetic Sponsoring sent me this great email that explains so clearly the value of being focused. His article is called...
Is It Better To Have More Products For Sale, Or Less?
And How This Effects Your Recruiting Results.

A few years ago I was building a team with a popular juice company that had one single product in their line.
This had become a growing trend after the success of Noni and Sea Silver – two companies that had broken sales records for the industry with single product based lines.
Without doubt, it was a phenomenon that caught everyone’s attention, and sparked much debate among distributors.
Is it better to have just one product, or should you have many to fit all the needs of your potential customers like New Vision, or Herbalife, Isagenix, or Melalueca?
For many people, logic dictated that having multiple products was an advantage. But the numbers said differently, and this juice company became the third in a row to shatter all sales and growth records, despite their minimalist product line.
That’s the point of this letter… It’s not to argue for one model or company over another, but to
discover the psychological reasons behind the numbers…
Why did consumers buy more product, more often, when they were presented with fewer choices?
Well last night I started reading a new book called, “YES! 50 Scientifically Proven Ways To Be Persuasive” by Robert Cialdini.
And guess what I found on page30…? Yep, the answer to this massive question. Here’s an excerpt from the book that demonstrates this phenomenon in two very different studies…
“Behavioral scientist Sheena Iyengar and several colleagues analyzed company-sponsored retirement programs for nearly 800,000 workers, looking at how the participation rates varied as a function of how many fund choices the organization offered.
Sure enough, the researchers found that the more choices that were offered, the less likely the employees were to enroll in the program at all.
For every 10 additional funds the company offered, the participation rate dropped 2%.
By comparison, they found that when only two funds were offered, the rate of participation was roughly 75%. But when fifty-nine funds were offered, the participation dropped below 60%.
In a second study, they set up a display at an upscale super market in which passersby could sample a variety of jams that were all made by a single manufacturer. Either 6, or 24 flavors were offered at any given time.
The results demonstrated a clear and astonishing difference between the two conditions: Only 3% of those who approached the extensive-choice display actually purchased any jam. Contrast that with the 30% who bought jam when they approached the limited choice display.”
Now there are always exceptions to the rule, when variety plays a positive role, such as Baskin Robins Ice Cream, but in most cases, too many options leads to indecision. I found that this philosophy had a positive impact in ALL areas of my networking business as well.
Having a single product based line was advantageous in many ways…
It created PERFECT focus and momentum throughout the company because every single distributor, was dealing with the same product.
Think of it as a bandwagon effect.
All of the conference calls, all of the tools, all of the websites, and all of the training were about one
single product.
New distributors didn’t join and say,
“So which products should I promote”,
or “Which tools should I buy?”
Every distributor and every team was on the same page. This laser-like focus produced incredible results.
Having too many options creates fragmentation throughout the distributor force, with various teams using different methods, and tools to promote different products.
This creates confusion and doubt for new distributors who can’t help but wonder if there’s a better way being used by another team.
Focus is destroyed. Now when it came to recruiting, we relied on this same behavioral tendency to maximize results there as well.
I’ve always had a saying in this business when it comes to the sponsoring process… “People will only choose from the options you give them”.
It was a technique that was extremely useful when it was time to take an order and fill-out the distributor application.
You NEVER ask a prospect, “So John, how much product would you like to buy for your first initial order?”
That’s sales suicide.
You GIVE John 1 to 3 options that he MUST choose from.
For example, let’s say that your company offers three product for 1, 3, or 5 boxes of product, valued at $100 per box.
Well when I was recruiting distributors for this juice company at the time, I would have only offered John the option to get started with 3 boxes or 5.
Starting with 1 box was NOT an option that I’d give him.
If he asked if he could just purchase 1, the answer was no… “John, how do you really expect to start a successful business with 1 single box of product? If you want to be a consumer, that’s fine, but as
a business builder you’d be shooting yourself in the foot and I can’t let you do that.“
If he insisted on buying only 1 box, then I’d let him go. I wouldn’t sponsor him.
For several reasons…
1: He wasn’t coachable.
2: He wasn’t really serious about his success to begin with.
3: He was going to attract, and start others in the business the same way he came in… A bunch of people willing to “give it a try” with 1 box of product.
Because I only gave my prospects the option to get started with 3 or 5 boxes of product, that meant that 100% of my distributors started with 3 or 5 boxes, instead of 1 or 2 like most people on other teams.
This meant our team was doing 3 to 5 times the volume and having much more success in building a customer base because they actually had product on hand to sell and promote.
Just remember… YOU dictate the terms. Your prospects can only choose from the options YOU give them.
I used this same mentality when writing the “Building On A Budget” course.
I could have included 10 to 15 different methods for producing free traffic online, but I intentionally limited the course to my top 5, most effective methods.
If you give a student too many options to choose from, they’re paralyzed by indecision.
If you give them a short, focused path to follow, they’ll get incredible results, which is exactly what’s happened for those who’ve gone through the material like the people at the bottom of the page here…
Just remember…
The fewer the number of options, the more focus…
The more focus, the better the results…
Best wishes,
Mike Dillard
Magnetic Sponsoring
You may use this article to post on your blog or website as long as you do not change anything in the article including the links and full give credit to the author. Posted by Frank Tocco--MLM Mentor and Business Builder. http://Shop4Dreams.ws

1 comment:

Elliot said...

Great article Frank. You really motivated me to re-think my marketing to stimulate an emotional response from people.