The POWER OF THE DEFAULT OPTION
Here’s how I made our Scouts fundraiser MORE money, increased their profits, and made life easier for their customers.
Best of all, you can do it too.
**Looking to scale your store? Join us here.
NAME: Ep 384 Sales The Power Of The Default Option-audio.mp3
Selena Knight, a retail growth strategist and store owner, welcomes listeners to the Bringing Business to Retail podcast, which provides strategies, tools, and insights to help scale stores. One of the most effective ways to increase sales and profits is to use the power of the default option. This means to clearly define the baseline of a customer’s purchasing option, making it more likely that they will purchase the middle tier item that provides the most profit. In this episode, Selena explains how to use this strategy to get more sales in a retail business. She provides examples of how this concept has been used in other businesses, and outlines simple steps to implement this idea in one’s own business.
In this conversation, the speaker talks about the power of the default option. They use a personal story as an example, in which they needed to buy a gift voucher for their daughter’s friend’s birthday. Despite the fact that the party was only two hours away, they were unable to find a gift voucher option on the website, and had to call the store to buy one. The speaker encourages people to add gift vouchers to their websites, even if they’re a physical store, as they are a convenient and popular option for customers. They also advise to get the plugin that gives access to gift vouchers, as this could save people from unnecessary hassle.
The speaker is discussing the power of the default option. He is the treasurer of a scout group and their big fundraising event is selling Christmas trees. The speaker recounts a story of how people spend an incredible amount of time deciding which Christmas tree to buy. They have an online site but don’t offer gift vouchers. He talks about how they added a delivery option to their site for a $20 fee which is almost as much as they make from selling a small Christmas tree. He encourages people to look at how customers value different things by selling live Christmas trees. He also suggests upselling and cross selling Christmas cakes, puddings and donations.
The speaker was discussing their experience setting up a website offering shipping or delivery as the default option. Surprisingly, many people chose delivery, which drew their attention to how people are generally okay with the default option. The speaker went on to recommend that ecommerce stores and brick and mortar stores with websites have different levels of shipping, such as flat rate delivery, expedited shipping, or express shipping. Additionally, they mentioned using companies such as Sherpa or Uber for same-day delivery, which could even be a money-making option. The speaker concluded by reminding the listener to be aware of the different shipping options available.
0:00:00 “Unlock the Power of the Default Option to Increase Your Retail Sales”
0:02:01 The Power of the Default Option: A Case Study on Gift Vouchers
0:04:47 “The Power of the Default Option: Exploring the Benefits of Offering Delivery for Christmas Trees”
0:08:19 Exploring the Benefits of Offering Different Shipping Options for Improved Customer Experience and Profit
0:10:16 “The Benefits of Same-Day Delivery Services for Shopify Stores”
0:11:58 Exploring the Benefits of Offering Expedited Shipping as a Default Option
0:15:06 “The Benefits of Offering Expedited Shipping Options for Improved Customer Experience”
0:17:01 “How to Give Customers a Better Customer Experience”
0:00:00 Salena Knight: You.
0:00:02 Salena Knight: Hey there, and welcome to the Bringing Business to Retail podcast. If you’re looking to get more sales, more customers, master your marketing, and ultimately take control of your retail or ecommerce business, then you’re in the right place. I’m Selena Knight, a retail growth strategist and multi award winning store owner whose superpower is uncovering exactly what your business requires to move to the next level.
0:00:33 Salena Knight: I’ll provide you with the strategies, the tools, and the insight you need to scale your store. All you need to do is take action. Ready to get started? Hey there, and welcome to today’s episode of the Bringing Business to retail podcast. I am super excited to have you here and so very, very thankful if you have taken a little bit of time out of your day to have me inside of your ears talking all about how to grow your business.
0:01:07 Salena Knight: Now, one of the simplest ways for you to make more money and get more sales is what I like to call the power of the default option. It’s simply telling people what the baseline should be or telling people what the baseline of most of your customers looks like. Now, you’ve probably seen this when you’ve gone to sign up for some software, and it says this is the bottom.
0:01:31 Salena Knight: Rung, and this is the middle rung.
0:01:33 Salena Knight: And it’s usually popped out, and it’s the most popular, and it’s got banners, and then there’s the premium version. What they really want you to buy is the middle tier, like they know where they make their money. And you, my friends, can do this in your business as well. So today I have pulled out one of the instagram lives that I did called the power of the default option, and I want to show you a super, super simple way for you to make more money and get more sales.
0:02:01 Salena Knight: All right, let’s jump into it. Hello. Today I want to talk to you about something that I really hadn’t thought about until I looked back at some numbers for a volunteer role that I hold, and I want to talk about the power of the default option. But before I do that, can I please, please just say, if you do not offer gift vouchers, please freaking put gift vouchers on your website, even if you’re a physical store, because in 2 hours, I have to drop my daughter off at a birthday party. She is 14.
0:02:39 Salena Knight: They her and her friends love very niche Japanese manga. She’s probably listening to me. I’m going to say they’re comics. They’re probably not comics. Whatever those books are that are kind of like comics but actually books, those things, they love those. And so her friend has asked for a specific book. Of course, it’s only available at a very specific bookstore in the city. I live anywhere near the city. That’s like a good 30 minutes bus trip. So we had come up with the decision that we would get the gift voucher for the book.
0:03:14 Salena Knight: I’ve just gone I’m looking at my screen now. I’ve just gone on to find the gift voucher and then the page that says gift vouchers because it’s not there. So I search gift vouchers, come up with a page and it says available in store or call this phone number. I literally had to go and dig out my credit card to get the credit card. I sit down, I make the call. Lovely lady, hi, I’d like to buy a gift voucher. She says awesome. Okay, so I’ll get your details and we post that out to you.
0:03:42 Salena Knight: Like, it doesn’t really work for me when the birthday party is 2 hours from now. She’s like, oh yeah, we’re very, very behind the time. And I said, look, I don’t really understand why this is not where we’re going with today’s conversation. But while I’m on their website and is flashing, I need to see what they use. Feel like it is probably a WooCommerce website. It’s certainly not a shopify website because it would say that in big letters anyway.
0:04:16 Salena Knight: Just get the damn plugin that gives you gift vouchers. Like if your staff can’t sell people product, then how do they meet targets? Like how do you make money? If I had a choice, I would go anywhere else to get this book. Now, even worse, we have to print a picture of the book and put some cash into an envelope. Fun fact, don’t own any cash. Everything is on my phone. So I’m going to have to go to an ATM and withdraw money.
0:04:47 Salena Knight: See how difficult something as simple as buying a birthday present has become because these people haven’t caught up with the time. They have an online site. Like I’m looking at it right now. They have an online site. I can buy books on it. Why can’t I buy a gift voucher? It literally would be I reckon the price of one gift voucher would cover whatever the cost of the plugin is anyway. But I digress.
0:05:10 Salena Knight: So today I want to talk about the power of the default option. Now, backstory to this is I volunteer my time for our local scout group and somehow probably the fact that I like making money. I have become the treasurer of the Scout group. Great thing is we now have money in the bank, which we never did. But our big fundraising event for the year is selling Christmas trees. And doesn’t matter where you are in the world, you probably have Scouts and girl Guides who are selling you Christmas trees.
0:05:43 Salena Knight: Can you do the wavy type thing? Do you give you some emoji if you have ever bought a live Christmas tree? Because whilst they’re awesome oh my God, the hassle that comes with live Christmas trees. I was an arborist. Like I used to climb trees and look after trees for a living. I am never having a live christmas tree, I will sell them for you. But I’m not having one. I had, like, massive rashes up my arms and people oh, my God. If you ever want to see how people value different things, selling live Christmas trees is the way to go. Because we had hundreds of Christmas trees.
0:06:24 Salena Knight: Fat ones, skinny ones, tall ones, short ones. Like, they come by size, but sometimes there’ll be bushier ones, sometimes there’s skinnier ones, sometimes there’s dark green ones, sometimes there’s light green ones. I have never before seen people spend, and I’m not joking, 40 minutes looking at Christmas trees to decide which one they want. Like, I’m talking over the top OTT anal about the Christmas tree. And some people really want a tall, skinny one because it will fit into a corner. Other people want, like, the biggest bushiest one that they can find.
0:06:58 Salena Knight: Some people want a really dark green one. Some people want a really light green one. It blows my mind. It’s just a Christmas tree, but there you go. If you ever want to see how values are different between customers, sell live Christmas trees. All right, so on the Live Christmas tree website, we have a WooCommerce site for the Scouts and we sell our Christmas trees. We also have upsells and crosssells, which is fantastic.
0:07:23 Salena Knight: And one of the options is delivery. Now, for us, delivery is pure profit because the delivery is done by the volunteer mums and dads at the Scout, so it doesn’t cost us anything. So if we can add on delivery at $20, that is almost as much money as we make on a small Christmas tree. So kind of a no brainer, right?
0:07:48 Salena Knight: If we can’t get them in the.
0:07:49 Salena Knight: Crosssells and the upsells for Christmas cakes and Christmas puddings and donations, which was one of the things that we put in put into the website, then we try and get them to buy the delivery. It’s great customer experience, but also pure profit. And so when I set up the website, I set it up with shipping or delivery as the default option. And wouldn’t you be surprised at how many people chose delivery?
0:08:19 Salena Knight: Now, I know that they all didn’t mean to choose delivery because a bunch of people emailed back and went, oh, I just realized that I chose delivery. I actually want to come and pick it up. So downside of that was a little bit of customer support was required, but what it drew my attention to was that people are generally okay with the default option. How does this relate to you? So one of the things that I tell the people who pay a lot of money to work with me is that you should always have different levels of shipping. And this doesn’t matter if you’re an ecommerce store or if you’re a bricks and mortar website, bricks and mortar store with a website, or if you’re pure play ecommerce commerce.
0:09:01 Salena Knight: When someone goes to check out. Generally speaking. Generally speaking, I’ve got like flat rate delivery or expedited shipping, express shipping in some way, shape, or form. But in this day and age, there are so many more options to the point where you can be making money on the shipping rather than it costing you money. So hear me out. Here in Australia, and I know that you have different definitely in the US. You have different options as well. Uber do it too. But here in Australia, we have a company called Sherpa, and that is same day delivery, usually within about 2 hours.
0:09:37 Salena Knight: You can do this with Uber, too. And I have heard I don’t know if this is true, so don’t quote me. I have heard that there is potentially a plugin coming to shopify, if it’s not already there, that will allow you to book Ubers for your customers. That’s pretty awesome, in my opinion. Anyway, Sherpa does a very similar thing. It is a delivery service where customers can pay for same day delivery. Now, I have a couple of clients who are using this, and on average, the client is paying, and this is just for general products. So a general size box. We’re not talking about huge oversized things, just your general parcel, couple of t shirts, a couple of boxes of games or something like that.
0:10:16 Salena Knight: The general price that they’re paying is about $32. So $32 for someone to have it delivered same day. Now, I do have one client who is in a very specialist niche of adult products, and that is something that their customers actually want. So come sort of Thursday afternoon, Friday afternoon, you’d be surprised at how many people choose that option. For most of you, not all of you, but for most of you, you’re probably paying. You’re subsidizing the shipping in some way, shape, or form.
0:10:51 Salena Knight: You might have free shipping over $150 or free shipping over $50 or whatever. But there’s a point where the money it’s costing you is coming out of your pure profit, right? And a lot of you have flat rate shipping, which doesn’t always recoup what it’s costing you. So when there is an option for you to make money on shipping, or at the least have it cost neutral, I am all for that. Like 100%, I am all for that.
0:11:24 Salena Knight: But even better is the customer experience that comes with that. And I kind of mentioned on my Instagram before Christmas, like, I am the person who paid for expedited shipping because I left everything to the last minute. To be fair, if this book was available right now, and I could pay, let’s say the book is $20, I’d probably pay another fifteen dollars to twenty dollars to get that delivered same day because I can’t be asked to go to the bank and find an ATM and get the money out. Like the time that it’s going to take me, I could have earned to $20. Somewhere else, right?
0:11:58 Salena Knight: That sounds very fickle, but time is really valuable. And so don’t always think just because you wouldn’t pay for something like expedited shipping that somebody else wouldn’t pay for it. I also paid like $70 to have something here shipped from the US. Because it was for my back and totally needed it, totally wanted it. Best thing I ever bought. And that was like the same price as the actual item. But these guys were smart enough to realize, girls, these people were smart enough to realize that people all around the world will pay for that and it didn’t have to cost them as a company anything.
0:12:33 Salena Knight: So back to power of the default option, which is the name of this conversation right now, if you have like flat rate shipping or free shipping as the default option, one of the things that you could potentially look at implementing is an upgrade to express shipping. Now, generally speaking, everything is generally speaking because I’m just going with what I know day to day with the people I work with.
0:12:59 Salena Knight: The cost for you as a retailer or an ecommerce store owner for regular shipping, which might be what, two to ten days in the current god knows if we can get anything delivered at the moment, versus expedited shipping, which is generally same or next day, doesn’t cost an awful lot, sort of usually between two and $5. So if you could offer, if you did offer expedited shipping for say, $5, you now, instead of paying for the free shipping because someone ordered over $150, it’s now cost neutral because they paid for the upgrade and they paid the difference.
0:13:36 Salena Knight: And I’m not really making sense here because as I say it, I’m realizing that I haven’t given you the whole story. Okay? On general, the clients that I’m thinking of pay around five to $7 to get a parcel shipped here in Australia. To get that upgraded to express is generally about $2. So they’re paying anywhere from seven to $9. So if they charge $5 for the express shipping, the actual shipping is only costing them $2.
0:14:04 Salena Knight: Hopefully that has made sense the second time around because I didn’t give you all the numbers the first time. So the cost to them is $2 instead of $5 or $7 or $9. Does that make sense? Hopefully it does. And so you can go even further and you could say upgrade to expedited shipping at the cost of said expedited shipping, which here in Australia is probably around like twelve to $15. And the thing is, if you make it the default option, people will generally pay it, the good customers.
0:14:35 Salena Knight: A couple of days ago I talked to you about your customer royalty and your VIP customers and really creating offers for them. Those people generally want their stuff fast, and so a couple of extra dollars to get it to them quicker is a great customer experience, is reducing any loss in terms of shipping, potentially it is breaking it even or even making you money. But at the end of the day, most importantly for your customer, for you it’s the money. For them, it’s the experience of being able to get their purchases quicker.
0:15:06 Salena Knight: And so what my suggestion to you might be for today is looking at your shipping and maybe this might work in other places as well. Actually, it would work. It would work really well in terms of, oh, I just thought of something. It works really well with subscription boxes. And you’ve probably seen this, I’ve seen it on Amazon. I’ve seen it on my vitamin supplements where it says the price is $49. But if I sign up to have it delivered every 30 days, it’s $45.
0:15:39 Salena Knight: And the default is always the cheaper option because it’s a longer customer lifetime value. Even if you only bought two for them, they know longer customer lifetime value. And so this is kind of the reverse when it comes to shipping, is if we choose the most expensive option, then the chances of our customers choosing it and getting a better customer experience becomes much higher. And it probably doesn’t sound like an awful lot of money, but I can tell you at scale, when you are doing 5100, 200, 500 packages every day, every week, $1 on each one of those in lost profit is a lot of money.
0:16:21 Salena Knight: $2 in gained profit is a lot of money. And so if you’re listening to me thinking, oh, yeah, it’s just another thing because I’m only doing 30 parcels a week, think about this at scale and think about what you could do with that extra money if the power of the default option worked in your favor. Okay, so power of the default option is how do you give the customers a better customer experience? In that vitamin example, it is I don’t have to think about remembering having to order my vitamins and getting them here on time because they’ve worked that out in the background for me. I’m getting it cheaper as well. But in the shipping experience, I’m paying more.
0:17:01 Salena Knight: But I’m prepared to pay more because I’m going to get my products quicker and be able to enjoy them much, much sooner. All right, hope that has helped. Hopefully I didn’t confuse everybody with my numbers in my head. It’s usually why I try and draw the number stuff out, like on the whiteboard behind me, because numbers in my head don’t always work so great. If you are interested in being part of any of our programs, our Supercharged Mastermind or Scalia store, feel free to drop me a DM and I can tell you some more about it. Other than that, I would love to see you back here again tomorrow at some point.
0:17:35 Salena Knight: And feel free to join me on the Bringing Business to retail podcast. All right, you guys have a great day. Bye. Oh, I have to do a call to action that is like, something that’s engaging. I’m still learning this instagram stuff, so give me, like, an emoji, which is a box. The gift box emoji. If you found this helpful. The gift box emoji. If you found this helpful, that would be awesome. Thank you so much. Bye.
0:18:02 Salena Knight: So that’s a wrap. I’d love to hear what insight you’ve gotten from this episode and how you’re going to put it into action. If you’re a social kind of person, follow me at the Selena knight and make sure to leave a comment and let me know. And if this episode made you think a little bit differently or gave you some inspiration or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review.
0:18:31 Salena Knight: On your platform of choice. Because the more reviews the show gets, the more independent retail and ecommerce stores just like yours, that we can help to scale. And when that happens, it’s a win for you, a win for your community, and a win for your customers. I’ll see you on the next episode.