psychology edition: service offerings
The Paradox of Choice
Last week I wrote a blog post about the Paradox of Choice and how having too many links in your navigation is hurting you. To refresh your memory, the Paradox of Choice is a phenomenon where consumers experience anxiety when they’re presented with a lot of options to choose from. The anxiety leads consumers to make no purchase whatsoever because they’re too overwhelmed.
In last week’s blog post I applied this phenomenon to your website navigation. The more links in your main navigation, the more overwhelmed your website visitors become. And the more overwhelmed your website visitors become, the less likely they are to click one of the links in your navigation. You could unknowingly be turning away potential leads because your website visitors are too overwhelmed by choices when they land on your website.
your service offerings
In this post, I’m going to apply the Paradox of Choice to your service offerings. As an entrepreneur we have a ton of ideas floating around in our heads. New ways to help our current clients, ways to create passive income, and ways to expand our reach to a new set of clients.
But with all of these ideas floating around, sometimes we forget to stop and think about how this looks to an outsider. How does adding a ton of services to our website affect our leads? Does it really open us up to new clients? Does it really make us more money?
Or… does it keep us from easily being able to land clients? Keep us from making more money?
applying the paradox of choice to your service offerings
The Paradox of Choice would say that offering too much overwhelms our website visitors and keeps them from making a purchase or signing on as a client. So how can we make sure our service offerings are set up correctly to keep this phenomenon from happening?
Here are a few tips for applying the paradox of choice to your service offerings:
Limit Your Number of Services
Let me guess, when you started your online business you weren’t 100% positive what services you wanted to offer.
What you did know is you wanted to have the freedom to work whenever, from wherever. You wanted to feel fulfilled by what you were doing. You wanted to make an impact on other people’s lives. And you didn’t want to be stuck to those 2 weeks of vacation (3 weeks if you were lucky!).
So when you built your website you started offering a bunch of different services to see which ones would stick.
The service page on your website looked something like this:
- General VA Services
- Social Media Management
- Email Marketing
- Web Design
- Graphic Design
- Blog Management
By offering a bunch of different services you thought you would appeal to a bunch of different business owners. And in the process, you could test the waters on everything, figure out what you like, what you don’t like, and refine your offerings from there.
You were only charging around $15/hour but that was okay because you were still learning and figuring everything out. Your availability filled up and before you knew it you had a full workload.
So after a few months you try to raise your prices a bit. And while you got some push back from a couple clients, a majority of your clients were okay with it.
Six months to a year goes by and you realize that in order to make more money you need to take on more clients (which means working ALL. THE. TIME.) or raise your prices. Since last time a majority of your clients were okay with you raising your rates, you go that route because you figure it will be okay. But this time… you get a lot of push back and some clients even cancel their services.
Why did this happen?
Because now you’re charging a premium rate for a bunch of services you’re just okay at. You haven’t niched down. You haven’t specialized in anything yet and become really, really, really good at it. While you might think your skills are at a premium level and deserve to be paid a premium price, it’s harder to convince your clients this when you offer a wide spectrum of services. Your clients are overwhelmed with what you’re offering because you’re offering too much.
Niche down. Pick 1 or 2 services you enjoy and are really good at it.
When you niche down you
- Have more free time because you don’t have to stay in the know on social media management, email marketing, web design, AND branding (now you just have to stay in the know with 1 or 2 of those services.
- Can raise your prices because you appear to be more focused (from an outsider’s point-of-view) and if you’re more focused on 1 or 2 things, you must be more of an expert.
- Land clients easier because when someone visits your website, they’re less overwhelmed with options (they don’t fall under the paradox of choice phenomenon so they’re able to make decisions more easily).
Don’t Have Any More Than 2 Packages Per Service
Similar to not offering a ton of services, the number of packages you have available per service should be limited.
When someone makes the decision that they need to hire a VA, they’re commited to bringing someone onboard. But that doesn’t necessarily mean they know exactly how many hours they’ll need help or what types of tasks they want taken off their plate.
Or when someone decides they want to hire a business coach, they’re commited to working with someone to grow their business. But again, that doesn’t mean they know exactly what they need help with or exactly how to grow their business (if they did, what’s the point of hiring a coach?).
Even with web design, when someone decides they need a website, they’re commited to finding a web designer within their budget. But that doesn’t mean they know the platform they want to use or the exact pages they want on their website or whether they want email opt in forms.
Business owners who help people come to those decisions are business owners who land clients easily.
So how can you do that? Limit the number of packages you offer per service.
Like the jam study showed, if you offer 6 different web design packages because you want to make sure there’s a package for everyone, you’ll end up attracting no one. Your leads will be too overwhelmed by choices and will work with someone who offered them just 1 or 2 straight-forward solutions.
Keep it simple, offer no more than 2 packages per service!
Don’t Offer a List of Add-Ons
So what happens if during a sales call you realize neither of your 2 packages are a good fit for this person but you know you can hep them with just a couple tweaks?
Whatever you do, don’t offer a list of add-ons. I have two reasons for you:
1. When you offer a list of add-ons, people expect that you could easily remove things from your current package just as easily as you can add things. This puts you in a tough position of defending why your package is set up the way it is. If you never provide a list of add-ons, this becomes 1000x easier.
2. When you offer a list of add-ons, you assign individual prices to individual services. So instead of a web design package costing $3,597, now someone sees $3,597 + $497 (for X) + $297 (for Y) + $347 (for Z). That’s a lot of numbers and it makes it seem even more expensive.
So what do you do?
This is when custom packages come in handy. If you’re on a sales call and you realize “I can definitely do this but one of my standard packages isn’t right for you,” tell them you’ll put together a custom package just for them.
“Custom” makes a package seem very specific to your client’s needs. And bonus, when you give the price it’s just a single number instead of being broken into a package price plus add-ons.
Listen on sales calls, figure out what it is the person needs, and then recommend a fixed or custom package based on their needs instead of giving them your fixed package plus a long list of add-ons for them to stare at, get overwhelmed by, and then forget about.
MORE PSYCHOLOGY LESSONS FOR HAVING A HIGH-CONVERTING WEBSITE
The Paradox of Choice doesn’t only apply to your service offerings or website navigation. In my FREE guide, I chat about another way you can apply the Paradox of Choice to your website and services. Plus, I share two other consumer psychology studies and teach you simple ways to apply them to your website.
Download the FREE guide here and start generating more money from your website!
If you can’t get enough of the subtle changes you can make to your website, sign up for my online course Web Design Classifieds – a course for web designers who want to build high-end websites and charge more for their services. We dive into the psychology behind color, copy, and design so that every website you design is a high-converting website!
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