About Us

The Science of Options in Selling VSCs

The Science of Options in Selling

Providing options to customers results in more sales, but only when it’s done the right way. An F&I office will increase sales by incorporating options into their presentations. These are powerful techniques that rely on our most basic psychological drives.

There is a Magic number and it is….

Years ago, psychologists ran an experiment to see how having options influenced buying decisions. The experiment was simple, they went to a college campus and offered to sell a piece of gum to random people. In their test they averaged a 23% conversion rate. Even without any advertising or sales prep they were able to get nearly 1 out of every 4 people to buy the gum.

For the next phase of the test, they again offered to sell people a piece of gum. This time they presented two different flavors to choose from, both priced the same. Their conversion rate went up. Under those conditions 33% of people bought a piece of gum. The only difference in the two experiments was adding another option to the experiment.

By this we can see that presenting a choice increases the rate at which people will buy. Over the years businesses have conducted similar experiments. The results are always the same. When a business offers more options, their conversion rate goes up.

How many options is the optimal number? As businesses have experimented with the number of options, they’ve learned that three is the magic number. The only catch is the three options must be comparable, like offering three flavors of gum. Offering to sell gum, a pen, or a matchbox car doesn't get the same results.

Why does it work?

There are several reasons why giving three options is so effective. Those reasons are deeply rooted in our identity and psychology. They guide our actions without us even having to think about them. That’s why this effect of adding options is universal.

One reason of having options has such a strong effect on us, is that people want to feel like they’re in control. People sometimes feel powerless in an F&I office because they don’t understand the process or the products. One way they can feel empowered is to make a choice. People will generally choose the option that gives them the most control. When presented with one product, the choice is between saying “yes” or “no.” For many people, being able to say “no” grants a greater feeling of authority and control.

Another reason providing options work so well (especially three options) because we like to rank things that we encounter. We rank which car is best, which athlete is the fastest, which foods we like best, or even what kind of pet is better. The idea of first, second, and third place is one of our favorite mental activities.

When presented with three options, we rank them to decide which is best. This process is subconscious. Once a decision is made, it’s more difficult to turn them all down. After all, nobody wants to turn down what they’ve decided is the “best” option.

A third reason relates to our cost tolerance which builds on the other tendencies. Once a person has determined the hierarchy of the options, they decide whether they can afford any of them. The process here is much more complex than whether they have enough money to make the purchase. Factors include their risk tolerance, priorities, culture, and current mood. These factors will lead some people to always spend big, choosing the top tier option. Some will always choose the middle option because they prefer to avoid extremes. Others will choose the lowest option because they tend to be more cautious in their spending.

How to start using this technique

As with any sales technique, Options Selling will take a little time to get used to. Most people see an immediate jump in their sales when they start using it. One change that salespeople must make is to present three options and then let the process proceed organically. Remember you are relying on your customer’s underlying psychology and you can’t force it. Your customer will decide which option is the best for them. If you try to push another option as the best, the resulting dissonance will doom the sale.

Do everything you can to understand the needs and wants of your customer before you engage them. This will include understanding your product and engaging in general market research. The most important part of this is to pay close attention to the customer when they are with you. Listen to everything they say and watch their body language. Let them feel in control and important, this way they won’t feel the need to gain control by saying “No”.

Once you understand them, describe the available options so the customer can understand. If you talk over their head with too much industry jargon, they will be more likely to reject everything. You want them to understand the options so they can easily calculate which option is best for them. That calculation is the foundation for all the psychological triggers you will rely on for the sale.

Zoom: the tool that makes option selling easier

One tool that can make this process easier for F&I is Alpha Warranty’s Zoom Application. We created it with this powerful sales technique in mind. It has helped hundreds of dealers boost their conversion rates. In fact, dealers that start to use Zoom in their presentations increase their conversion rate by an average of 10%.

Zoom is a free tool available to all Alpha dealers. It presents three options based on the vehicle data. It presents the options in an easy-to-understand interface. Once you close the sale, you can complete the transaction right there. Zoom also gives the user access to reports that will help simplify reporting. If you would like a free training on how to use Zoom. Contact us and we’ll be happy to assist.


Coverage Lookup
Please select if you are an Agent/Dealer or Customer/Repair Facility from the options below.