November 1, 2022

Proposal Options and Bathroom Stall Choices

I’ve written repeatedly about the power of presenting options in a client proposal. The benefits of offering options include giving choices, which most people prefer, and better matching different clients, who value your service offerings differently, with your service offerings they most value.

Part of the psychology behind offering options rests in what psychologists call the centrality preference. This preference helps describe why, when given a choice among an array of items, most people prefer middle options vs. the extremes on either end.

To put it in an everyday business context, for any given product or service, most people make a “Goldilocks” choice: they don’t want the cheapest option, for fear of mediocre quality, and they won’t pick the most expensive option because they don’t value the product or service highly enough.

How strong is the centrality preference? It extends all the way into the bathroom. In a research paper published in 1995, Nicholas Christenfeld shared the results of his study of stall selection in a public restroom at a California state beach. Wisely, he didn’t stand around in the bathroom all day with a clipboard. With the help of the bathroom custodian, he monitored toilet paper usage, as measured by finished rolls, over a ten-week period.

He found that 60% of finished rolls during the ten weeks came from the middle stalls, while 40% came from stalls at each end. These results indicated a statistically significant bias toward the middle options.

Christenfeld found a similar bias toward middle options in several other contexts, including the supermarket and in navigation (choosing walking routes across a parking lot).

Options in proposals are powerful for your business. If you’re not using options in your client proposals, this one change can significantly enhance your realized prices and the revenue in your practice.

If you’re already utilizing options, this preference toward the middle can help you diagnose how effective your price setting is. If your clients are making choices which are tilted toward either your basic or your premium options, your pricing is off.

 

 

Image created using Craiyon (Formerly DALL-E Mini)

(This blog post was also posted on LinkedIn.)

©Ray Business Advisors, LLC and John Ray

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About me: I help solo or small professional services firm owners with the confidence and positioning necessary to improve their pricing and change the trajectory of not only their business but their life.

I have a podcast called The Price and Value Journey, which features interviews with industry leaders and audio versions of my blog posts. You can find the podcast on your favorite podcast app.

I also have a book coming out in 2023:  The Price and Value Journey: Raise Your Confidence, Your Value, and Your Prices to Grow Your Business Using The Generosity Mindset.

For more information, go to PriceValueJourney.com