Reduce To The Ridiculous

By Raul Ramirez

A life insurance agent sits across the dining room table from a couple. The couple is middle class with two children ages 2 and 10. After conferring with the couple for 45 minutes the agent has designed a plan to protect the family against death of either the mother or father or both. The agent slides the proposal across the table to the parents. The parents glance at the proposal and see that the plan will cost them $50.00 a month. The couple hesitates then glances at each other.

The agent observes the hesitation. He anticipates an objection and reaches into his pants pocket and pulls out 2 quarters, 2dimes, 3nickels and 4 pennies. He then puts the change on the table and states that The childrens future will be protected in the event that a tragedy takes the life of one of you or both for a little over a dollar a day or a cup of coffee. In sales, the next one that speaks loses. The couple smiles and asks Where do we sign?

This is called Reduce to the Ridiculous and it is a form of framing. In the sales profession this is a very effective way to overcome the monthly objection. Millhouse framed his decision in the very same manner. The salesman reduced to the ridiculous and Millhouse bought. Forty cents a day sounds better than $12.40 a month. The couple in this example was faced with the dilemma of $50.00 a month. The children would still be taken care of financially in the event the parents died but $50.00 a month is a lot of money, that is $600.00 a year or just $1.61 a day. Wait a minute, just $1.61 a day? We can do that! Where do we sign? What does this say about our customer base?

People do not respond the same to prohibitions and allowances (Plouse, 1993). Take for instance the agent and the couple or Millhouse and the salesman, both were faced with a substantial amount of money out of pocket even though the need warranted it. When the agent and salesman turned the concept around to the point of value for only pennies a day, the customers frame was changed and the sale was made. The framed saw that the allowances far outweighed the prohibitions regardless of the fact that everything was the same. This is very powerful in the world of sales. How you make a decision is often determined by how you view your choices or how you frame the questions around it (Anderson, 1999).

In the Millhouse example the salesman framed the question around the future success of the company being worth one can of soda. This statement is pretty ridiculous to the point that anyone would say yes to that statement. If the salesman framed the question any other way, the possibility of a sale at that moment could have been greatly diminished. For example, if the salesman stated that the future success of the company depended upon the purchase of this product today, there is no value associated with the gain or loss. Millhouse didnt see a can of soda being the reason the company is successful; rather Millhouse can easily validate that the decision could be made tomorrow and thusly rationalize against the purchase. For example, he could rationalize the overall cost versus gain, interest paid, and Is it really a value. People tend to be against risk and will look for reasons to talk themselves out of the situation when given the chance (Anderson, 1999).

The can of soda a day is not a loss compared to the future success of the company.

Framing in the business world can be a powerful ally to the salesman. Salesman are trained not to go into a sales pitch right away but rather feel out the prospect, gather information and find the hot spots. An experienced salesman knows his prospects as well as the product if not more. An experience salesman builds a relationship with the prospect. An experienced salesman asks the right questions. An experienced salesman frames the closing statement to the point that the prospect would be a fool not to buy.

A good listener as well as inquisitor can learn more about a person in one conversation than they think. The more the person knows the more power that person has to be an influence upon the decisions we make. In these cases knowledge is power. Successful businesses with products to sell have uncovered so much information about the people and markets to which their products are being sold to. Without this knowledge, the marketing departments would never know how to cleverly make that closing statement, or put that person there in that commercial or use those colors within the product they are marketing to sell. This is all a form of decision framing by influencing the way the customer sees the product, convinces themselves to purchase the product and rationalize that the purchase was a good decision. Framing a decision in part is controlled by the normalcy, habits and attributes of the decision maker (Plouse, 1993).

Morally, people must take the decisions they make into careful consideration and accountability. One can have a great influence over another when it is done right. We are all guilty in one way or another of framing, from the toy companies to convincing your boss you need a raise. The world is bought and sold face to face or across the airwaves using frames. Conflict and peace and the reasons for either one are thrust upon us by using frames. The key is to take time in making a decision.

Usually a decision can be made on a product or situation with a little bit of time in between. Will the decision be different? There is an extreme possibility that it will. If one was framed and took time to think about it, more than likely the decision will be different. Millhouse didnt take time to analyze the total cost of the product on the extended payment plan and the difference that would make on the actual bottom line and whether it was worth it then. We are all guilty of framing and being framed. We all have a responsibility to take a few steps back and think about and realize the decisions we make. The fact of the matter is we would probably be surprised about how differently our lives might actually be.

References

Decision Making Traps We All Fall Into Kare Anderson Canadian Womens Business Network 1999. retrieved 18 November 2005. http://www.cdnbizwomen.com/articles/kare8.html

Plouse, Scott (1) (1993) The Psychology of Judgment and Decision Making New Aster: McGraw-Hill

Licensed

About the Author: Raul Ramirez is a licensed agent in the state of Florida. He owns and operates Gulf Breeze Insurance Inc. an independent insurance agency. Please feel free to use this article on your site or email so as you include name of author and website.

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