Give Your Customers Fewer Choices and Make More Money By Gregory F. (Greg) Zerovnik, EMBA, PhD
Give Your Customers Fewer Choices and Make More Money
By Gregory F. (Greg) Zerovnik, EMBA, PhD
Many people seem to think that if choice is a good thing, more choices must be better. Nice idea, but not necessarily true. As a marketer with the perspective of a trained media psychologist, I’ve been exposed to a number of well-validated studies that demonstrate a simple fact: Too many choices lead to confusion, indecision and—often—a refusal to choose. That’s right; when you give people too many choices, their “chooser” shuts down and they don’t pick anything at all!
Evidence for this comes to us in an online edition of “Strategy+Business,” with authors Sheena Ivengar and Kanika Agrawal doing a good job of summing up past and recent research on this topic. In their article, “A Better Choosing Experience,” they note that choice for its own sake is not what works; instead, it’s how choice works to make the shopping experience more fun, more enjoyable. After all, Disneyland has lots of rides and it’s a lot of fun to visit. But those rides are organized into a handful of “lands” so you can easily choose a destination set of experiences to sample.
Psychological science has pretty well established that a consideration set of more than seven items is overly taxing. This has to do with a concept called “cognitive load.”
One study I read looked at how college students in a study group reacted to potentially distracting activities. There was a kiosk on campus between the dorm and the library that students typically passed on their way to their study group sessions. When a fake poster advertising on-campus entertainment was displayed, a significant portion of students blew off the study group and went AWOL to take in the supposed concert.
When two posters displaying competing entertainment alternatives were displayed, fewer students abandoned the study group. When three posters with three entertainments were displayed, almost everyone continued on to the study group. You may have heard of the saying, “analysis paralysis.” Too many choices requires too much thought; it’s easier to mentally shrug it all off and not decide.
In order to deal with this problem, Ivengar and Agrawal have some sound advice that I readily endorse. They outline four steps to take and I will add a fifth at the end.
First, limit your customers’ choices. The study’s authors note that when Procter & Gamble pared down the varieties of Head & Shoulders shampoo from 26 to 15, sales went up 10%. Don’t get “precious” about legacy items in your line—cut the poor sellers. There should be an apparent reason for a customer to choose among products in your lineup. Fine distinctions may be hurting your sales. If in doubt, get some interviews done with trusted customers. And then cut the number of choices.
Next, help your prospects and existing customers to make good choices by giving them access to expert recommendations. People rely on experts and gain confidence in the choices they make as a result. Work with your sales team to get a good expert panel going and get them to help you with short but relevant discussions of why to choose from among your alternative products. This is a good spot to include social media in your mix: blogs, tweets, Facebook groups…the list goes on and you need to take advantage of every opportunity. Compile an email subscription list for an insider newsletter or create a really simple syndication (RSS) “for members only.”
Third, get your options organized into sensible categories. If you can take 50 SKUs (stock keeping units) and put them into six or seven categories, you’ve already made your client’s evaluation process a lot easier. Take the work away from your client and put it onto yourself instead. You’ll reap the rewards with enhanced sales.
Fourth, if you have some products or services that are fairly complex, help people with some no-nonsense educational material. Remember to keep it short, sweet, and simple. Aim your language at your customer’s level. In some cases, this may mean you need more than one level of collateral. You don’t want to talk down to an engineer, nor do you want to bury a purchasing manager in unfamiliar jargon. Use your Web site to steer different visitors to different explanations, videos, and—if at all possible—interactive content.
Lastly, and this is my own addition to the list, do what you can to interject fun or entertainment into the choice mix. This means creating a more engaging sales communication process, a real two-way stream. Get down to business but keep it light. Assume your prospects have a reasonable sense of humor. And if they don’t, let one of your competitors have the joy of putting up with them. Not all customers are profitable, and sometimes you not only need to weed your product list you also need to weed your customer list. Good luck!
Gregory F. (Greg) Zerovnik is an award-winning marketing professional. He has a BFA from California College of the Arts, an Executive MBA from Claremont Graduate University and an MA and PhD in Media Psychology from Fielding Graduate University. Dr. Zerovnik has over 30 years of marketing, advertising, and public relations experience. He has taught marketing and strategic management in MBA programs at University of La Verne, Cal State San Bernardino, Cal State Monterey Bay, La Sierra University, and University of Redlands. He taught branding and positioning at two universities in the People’s Republic of China for two weeks in 2003 on a teaching fellowship. He has worked on both the client and agency sides of the marketing communications business, working with and for governmental and non-profit organizations, as well as for-profit companies.