Balance sheet method is an approach used by salesperson to gain commitment from consumers by telling them to think the pros and cons of all alternative available. It is also called Ben Franklin Method.
Make two columns. List all the pros of the alternative in one column and all the cons in another. Then two conditions will arise:
- Any one column will become longer than the other so that will clearly imply if pros of the alternative is more or cons accordingly the consumer can take the decision if he should go for that alternative or not.
- If two columns are of same length then the list will help the consumer to become more familiar with the advantages and disadvantages of the alternatives available.
This will help consumers to get a clear picture of all the alternatives and help them to choose better alternative.
First of all, make two columns and list all the pros and cons of the alternative in respective columns. Once the list is complete, analyse the list and give weightage to each item. Then compare the items in pros and cons with the same weightage. Strike out the items with the same weightage. After that remove from the list all items where one pro would equal in weight two cons. That eliminated three items. Then repeat the same in reverse way by removing all items where two cons equal three pros. That eliminated five more items. This process reduces the size of the list to manageable one and makes the decision making easier.
Advantages and Disadvantages
The main advantage of the balance sheet method is that decision making becomes easier because the outputs are clear. However, this method also has several disadvantages, including:
- Consumers might not be able to cover all pros and cons of an alternative; some of them might be missed.
- the process sometimes become cumbersome and confusing.
- time consuming process.
Let’s consider a situation: Should I buy a car?
- Pros: saving money in long term; saving time in long term; convenience in going to distant places; more people can go at a time; can be used for commercial purposes.
Cons: big upfront cost; maintenance and insurance; may not be used regularly; high monthly instalments.
Then give weightage to each item. After striking out the items with same weightage we can clearly see that the pros of buying a car outweigh cons of buying. So, the decision should be with buying a new car.