An Important Lesson From Starbucks

Guest Post by Sean McPheat

Last week, one of my trainers and I were on our way to visit a prospect when we stopped off at a Starbucks for a drink.

We ordered our favorites and sat down.

I was just looking around while we waited for our drinks to be delivered to our table, when I noticed the pricing on the menu on the wall.

Frankly, I had never paid much attention to the prices; I just ordered what I wanted in the size I wanted.

I asked my colleague if he had ever noticed the pricing structure of the drinks.

Like most people, he replied that they hadn’t.

I noticed that there were three sizes, named Tall, Grande and Venti.

These are 12 fluid oz, 16 fluid oz and 20 fluid oz.

The prices of the drinks were £1.95, £2.30 and £2.65 respectively.

We then worked out that the Grande size (which is the size we both ordered) was 35p more expensive than the Tall size. The Venti was 35p more expensive than the Grande.

Also, the Grande is 33% larger than the Tall and the Venti is 25% larger than the Grande.

What is interesting is that most people buy the medium-sized drink.

They probably think the Tall is too small and the Venti is too large.

What’s also interesting is that, when a person is presented with three choices, most people go for the middle, safer choice.

Humans see the choices and, rather than decide yes or no, they choose from one of the three offered.

If the choice gets too much, possibly more than five choices, then the brain gets confused and may switch off.

So how does this apply to us in sales?

Well, when we present solutions, instead of recommending just one direction, we can offer maybe three choices to the prospect.

By getting the prospect to have a choice of solutions, they have a different way of viewing the options.

It may sound something like this:

“So, Mr Prospect, we have some options here. Firstly, you could go with our silver package, which includes the back-up and future opportunities we discussed. You could go for the gold package, where our processes will help you keep up to date with new ideas and technical improvements. And there’s also our platinum package, for those who need the personalized services that come with having your own hotline number to a consultant 24/7. Which of those three appeals most to you and your business needs?”

What you see here is the ‘Starbucks’ approach to presenting options:

If the prospect has just one choice, they decide between yes and no.

If there was an option between two solutions, it would be easier for them to make a choice.

Then with three options, it means they switch from a yes or no approach to a ‘which of the three would be best for me?’ process.

It would probably be best to put the option most people would go for as the middle choice, as it means they feel upgraded from the lower choice, but don’t feel embarrassed or downgraded if they don’t go for the highest option.

My colleague and I tried this with our prospecting call, and guess which option they preferred?

Yes, you guessed it…the middle ground!

We hope to close the deal with her very shortly, because they were the one who made the choice.

Thank you, Starbucks, for giving us the idea to offer the three levels of service!

To your success!

Sean McPheat

ABOUT THE AUTHOR

Sean McPheat is the CEO of the MTD Training Group – MTD are the management training and leadership development specialists. Sean has been featured on CNN, ITV, BBC and has over 400 different media credits to his name. Sean’s MTD Management Blog is followed by thousands of people each week who are interested in improving their management skills. Sean is also the Managing Director of MTD Sales Training and a new digital learning platform, Skillshub.

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