How limiting choices can increase client conversion

Kim Jakubowski

Updated: Dec 13, 2023 · 10 min read

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The number of choices you offer customers is directly related to the number of customers you convert — but maybe not in the way you’d expect.

As the saying goes, you can’t be everything to everybody. So why do so many small businesses try to do just that?

During our recent Level Up With Keap event, digital marketing consultant Dallas McLaughlin covered how limiting choices can actually increase conversion rates. He dives into:

  • How to size up the marketplace and your competition
  • What your customer needs from you now and in the future
  • How to create the most value for new leads

Read on and watch the video for tips on how to ramp up your conversion rates by giving your business the focus it deserves.

Make it easy for customers to choose

Perhaps now more than any other time in history, all of us, including our buyers, our customers, our prospects, have so many needs, challenges, and use cases for niche products and services. So in a world with more noise than ever, how can your business stand out?

Dallas gets clear on how to cut through it with the psychology of decision making: We need to make it easy for our customers to choose us.

“Businesses have taken this approach of offering something for everyone,” Dallas explains. “They're looking at all of these customers and prospects and saying, ‘Hey, they've got that need. Let's go do that. Let's make all these products. Let's add all these SKUs, all these variations to the products, the service offerings...’ They're kind of expecting their clients to vote with their dollars and steer the business on their behalf.”

For the consumer, this leads to what Dallas calls “decision shock,” commonly known as decision fatigue — after making many decisions, our ability to make more decisions over the course of a day becomes worse. According to Dallas, focused messaging prevails in the face of this fatigue, because customers are often looking for the one business that can solve their specific need in the best way.

“Where I'm seeing businesses be successful is focusing on exactly who they are, what they do and what they offer. They're the best in class or best in their industry, best in their vertical at that thing — they're becoming the kings and the queens of their categories and completely dominating it. And they're saying, ‘Hey, if you want those other guys that kind of do this, and you want kind of average results, go shop with them. But if you want the best in class that your dollars can buy, come shop with us.’”

Dallas’s approach is all about efficiency. He emphasizes that narrowing your focus doesn’t mean you’re going to be doing less work, you're just going to be consolidating where your efforts are going.

“Doing less is not the advice,” Dallas says. “Doing more of the stuff that works is the advice. And it feels better because you see those results sooner, you build momentum, your work is more focused, you get better at your craft, and people recognize that you're getting better at solving the specific need.”

More traffic doesn’t mean more conversions

One common misconception Dallas hopes to dispel is that people are more attracted to businesses that have a wider variety of service offerings.

He describes a simple study. “When people walk into a grocery store, more people will walk up to the display table with more products on it. And a lot of the thinking is that a prospect is going to say, ‘I'm such a unique individual. The table with more offerings, more services, more selection is going to naturally be more likely to have something that maps to my needs because I'm so unique.’”

Businesses hear this and conclude that if they offer more services or products, people are going to line up for them. So they continue to add more to get people in the door.

“But actually, as you continue that research, all of those studies then follow that person all the way through to the point of conversion,” Dallas says. “And what they find when they do these studies is that people who were initially attracted to the wider set of offerings actually have significantly lower conversion rates. Because what ends up happening is they say, okay, of this proverbial table of offerings, perfect choice exists somewhere. So they begin looking for the perfect choice.”

This search leads to the “decision shock” Dallas described. “They try to make sure that the thing that they find is the absolute answer, which introduces a bunch of anxiety, a bunch of fatigue, just a bunch of stress into the process, which actually causes them to leave.”

So what happens at the table with a smaller selection of options? As it turns out, conversion rates for those customers are significantly higher. “They spend more, they're more loyal to the brand they buy with, because they feel like it's a better shopping experience. It was easier to find the thing that they wanted because there was less confusion in what might be the best option for them.”

Though prospects and customers may appear to want more options, ultimately, more interest doesn’t necessarily mean more revenue for the business.

This should also change the metrics businesses focus on. “At the end of the day, we want customers,” Dallas says. “We want dollars going into that cash register that we can then continue to use to grow our business further — website impressions, website traffic, that doesn't grow your business. At the end of the day, you need conversions.”

Focus on your strengths

Dallas’s advice for those starting a business or carving a new path within their business is to complete an honest assessment of their strengths.

“New businesses are typically created by somebody who came out of what is now a competitor. We all develop our craft and then we want to go do it for ourselves and keep all the money for ourselves,” Dallas says. “What ends up happening with that approach is a lot of these businesses just are the exact same business they just walked out of. It just might be a little bit faster, maybe cheaper, maybe a few additional features in there. But there's really nothing that truly differentiates the business from anybody else who's doing a similar type of service.”

So how can businesses best set themselves apart?

“The value is in being at the very top of the game,” Dallas explains. “Everything in the middle of the bell curve where everybody is fighting and thrashing over the same thing — too much warfare is happening in there for too few dollars. And you don't want to be the cheapest, because then you're the cheapest and you have to keep being the cheapest.”

This is why limiting your offerings is critical to success. “The real win is to be the best. And it's hard. And that's why you should focus on being the best at one thing. If you try to do six things, you're never going to be the best.”

He recommends developing your craft, service or product offering based on your strengths first — even before determining who will pay you for it. “If you're exceptional at this thing, there's always going to be a market. A lot of people will try to find a market that has a need and then try to weasel their way in there, which sometimes works. But I believe in being the best at what you can do and then finding the audience.”

Understand your audience

Once you’ve defined your service or product offering, the next step is to find your audience. And it's about more than just finding them, Dallas explains. You have to truly understand who your customers are.

“What are their behaviors? What are their interests? Where do they spend their time when they're not shopping for your product or service? What are they doing? What kind of vernacular or lingo are they using? What memes are they sharing?”

Beyond understanding your customers, Dallas argues that you need to truly like them to be successful in marketing to them. “If you don't like your customer, if you don't like where they're spending their time, if you're not interested in who they are, you're not ever going to be able to connect with them. You're not ever going to be able to speak their language or write copy that works for them or produce resources for them.”

Dallas illustrates his point in terms of concentric circles: your core audience should be at the center, and it may be very small. But if you focus all your messaging on that audience, you're still going to attract audiences from the circles further from the center. “You want to develop that tribe mentality, that in-crowd, and you want to try to pull people into it versus trying to go into all of their tribes.”

Don’t exchange hours for dollars

So you’ve identified your ideal service and customer, but is there an ideal way to price your offerings? Especially for service-based businesses looking to scale, Dallas is an advocate of value-based pricing over the traditional hourly rate.

"For me, [an hourly rate] is no way to scale a business because then you're exchanging hours for dollars, and there's a finite number of hours in the day. What I want to do is look at the work I'm about to do and say, "Hey, this is going to create X amount of dollars of value for your business.’ And I'm going to base my pricing off that.”

He shares an example, “If the work I'm doing is going to generate $1,000 of incremental revenue, the most I can charge you for that work is $1,000. Otherwise, why would you pay me for it? But if the work that I'm going to do for you is going to create $10,000 of value for you, I can charge $5,000 for that work. and you're still going to come out ahead. You're going to pay five times more for the work, but you're going to make 10 times more. That's the business I want to be in. Create as much value as I can and capture as much of that value as I reasonably can.”

Centralize your customer information

Dallas describes two main types of businesses he sees in his consulting work: businesses with a clear direction for the services they’re going to offer, that are now looking to scale faster. And businesses without clear priorities that are struggling to figure out their direction as they go.

“The biggest difference I can tell in those two, and it's not size, the headcount, it's not revenue, any of that stuff, it's really having access to the proper metrics in a cohesive place that everybody on the team can look at, agree to and rally around, and look at how they're moving on a weekly, monthly, annual basis.”

He recommends getting your team on the same page with a centralized data analytics tool. “You have to have something that your team can get into, and you're all looking at a single source of truth. There are too many businesses that I've been with that everybody's got their own spreadsheets. They're all doing their own funny math to get the numbers that support their cases to do things,” he explains.

“Keap is an excellent centralized resource of the company's data. It's going to be the aggregate that everybody in your organization can get into and see ‘we have this many prospects at each stage of the sales funnel… I can see which customers are resulting in the most revenue and what services they're paying us.’ So for me, Keap is awesome because it allows me to have a full look at the business.”

Don’t be afraid to filter people out

He illustrates that the best small business CRMs, like Keap, can also help you evaluate which leads will lead to the most revenue. “You can dive all the way in and see on the ground level, what's happening? What do we need to do more of? You know, what customers are actually paying us for? How many have just been sitting in our CRM database consuming time, energy and resources trying to build touchpoints with them that aren't ever going to buy from us? And how do we focus on the ones that are very near and dear to us and about to convert? And how do we retain the ones that have already converted?”

The message: Don't base your marketing on the leads you capture. Base your marketing on the conversions you're making, because that’s the audience that's going to bring you revenue.

This will likely filter people out of your sales funnel, but that’s exactly Dallas’s point. “You want to filter people out, that's okay. Leave the sales funnel if you're not going to buy from me.”

“We spend so much time thinking about the 99% of our sales funnels and prospects that don't convert. But what you should do is look at the 1% that did. And then optimize your whole funnel around that person.”

Watch the event replay for more from Dallas, including a Q&A that covers tips on A/B testing, low versus high-ticket items, and more.

Need a system that helps your business visualize what’s working and what could be improved in your sales pipeline? Check out a free trial of Keap today.

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