How One SAAS Business Eradicated the Paradox of Choice using Packaging and Smart Pricing

September 9, 2021
Emmanuel Cohen

As against the popular notion, businesses that offer too many choices don’t do well. This is particularly true in the fashion industry as it is in other industries. That’s why AIMS360 uses packing and smart pricing to eradicate the paradox of choice.

AIMS360 is a cloud-based, fully integrated order and production management and processing software for fashion manufacturers, wholesalers, importers, and distributors. They merge offers to streamline and simplify the sales process and guarantee that customers are provided with what they need, when they need them, and have a maturity path as a fashion business, with the help of AIMS360 solutions.  AIMS360 is the top-performing Enterprise Resource Planning (ERP) fashion brand software company. Their over 500  are SMEs. Their software handles everything from stock management, order processing, stock management to accounts receivable. In 2020,  over one billion dollars were processed by the AIMS360 platform. AIMS360 offers its software on a SAAS as a subscription every month. Their customer base also varies from sole proprietors just starting in the fashion industry to mid-size businesses and businesses all the way up.

AIMS360 started with a tailored approach for each customer since there was so many services to offer and needs to meet

Each customer could mix and match from all of the company's services, as well as variable terms and amounts of services based on the size of the operation. The company later realized that customers would be more satisfied and loyal if offered exactly what they wanted. Sadly, this approach did not work out. The sales process was extremely challenging because customers were perplexed according to AIMS360 President Shahin Kohan. “We were essentially giving them 40 options.” This phenomenon, nicknamed "the paradox of choice" by author Barry Schwartz, has become well-known in the business world.

People have a hard time making decisions, and this is why brands that give a lot of options don't do well

And the chances are that, even if they make a selection, they would be dissatisfied because they did not grasp the choices they were making and/or did not feel they were obtaining the best alternative (i.e. most perceived value).

AIMS360 decided to do things differently by segmenting customers based on their needs, driven largely by the size of their organization. Designer, Visionary, Luxury, and Emerging were the four sizes of customers they had. Kohan explained, “Because we work in the fashion sector, we gave them unique names:

The Designer is for people who are up and running, but they’re not yet a big brand. Maybe they’re doing a million dollars of volume, maybe they’re doing $2 million, they’re doing Instagram, they’re doing Shopify, they’re selling to some boutiques, maybe one or two department stores.

Visionary is for people who are just getting started, they have a vision, but not much business yet. You can enter your styles, you can do some invoicing, you are starting on the right foot.

Luxury is for enterprise clients who haven’t developed their in-house corporate system.

And finally, Emerging is for companies that are doing well enough that they are basically outgrowing Excel and QuickBooks and ready to kind of rock and roll.

AIMS360 began pre-packaging their services in packages that would be appropriate for each business size — and offer a natural upsell path for businesses as they grew, with higher tiers having a greater price to capture the additional services delivered.

While presenting an offer to a customer, for instance, AIMS360 will inquire about the number of Shopify connections the company has. Kohan explained that  “A company might have 20 separate stores on Shopify, 20 different domains because they have different things that they offer on the different brand names in Shopify, and they're all different stores. A company might have 20 separate stores on Shopify, 20 different domains because they have different things that they offer on the different brand names in Shopify, and they're all different stores."

On a Designer plan, AIMS360 limits the number of stores you can have; if you have too many, they will push you up to Luxury.  These plans and costs aren't fixed either. The organization adjusts the packages on a regular basis to keep up with the market and the needs of their consumers.

AIMS360 discovered that simplifying their packages has made it easier for them to sell, brought more fulfillment to their consumers, and reduced churn

Customers of AIM360 feel confident that they are purchasing the best product for their needs, without feeling obligated to learn everything there is to know about the fashion industry. Which is the point: AIMS360 allows fashion businesses to concentrate on their core business while leaving the business software to the professionals. And that’s how AIM360 uses smart pricing and packaging to do away with the paradox of choice.

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