By:
January 09 2018

CPQ and the rationale behind irrational choices

The (ir)rationale of having more options in your CPQ

When faced with choosing between different options, you might think that the choices you make and the answers you give are rational and not at all manipulated. But sometimes the question is half the answer. There’s a Swedish saying that goes like this: “As you ask, you’ll get your answers.” This is highly relevant when we design our CPQ interface.

In workshops, I’m the first and the last to point out the importance of simplification in a product configuration. If we can remove a question, an alternative answer or maybe a complete group of questions, I always see it as a mission accomplished.

That’s why I’m caught off guard when someone shows me that the opposite of simplification may also serve our purposes when designing our CPQ solution. What we all want is to create a system that boosts sales.

We do this by simplifying, streamlining and presenting the product in the best possible way. That’s why adding a supposedly “stupid choice” that nobody will ever buy seems to make no sense at all. Let me show you what I mean.

In his TED talk, Dan Ariely shows a great example of selling a more expensive option by introducing an entirely meaningless alternative in a choice of newspaper subscriptions. Like this:

 

- Web subscription - $ 59

- Print subscription - $ 129

- Print subscription and web subscription - $ 129

 

You’d imagine that no sane human being would choose to pay the same price to get only the print version of the newspaper. But this irrational choice serves a purpose. When the middle option was included, 16% of people chose the cheap option and 84% the more expensive option. When Ariely removed the middle option and then asked a reference group to make a selection, only 32% went for the more expensive option.

Get it? Add the middle alternative – the one no one buys — and 84% will buy your more expensive alternative. Remove it and only 32% will select that expensive option. The takeaway? A good way to get someone to make a certain choice is to offer a slightly worse variant of the same thing.

 

So, what’s my conclusion?

Designing questions and answers in a CPQ solution might seem like a simple task. But as this example shows, just a small tweak will dramatically change the configuration and the order value.

That’s why a close analysis of user behavior not only benefits usability, but, as this example shows, it gives us a clear understanding of when an irrational choice serves our purpose.

Adding that irrational choice can actually boost your sales.

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