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Offer less choice to get more sales

October 8, 2009 | By Paul Ryan

Regular Anthill contributor Steve Sammartino published an interesting post on his blog this morning. Steve is in the process of tweaking the pricing model for his company Rentoid and relayed a nugget of advice offered to him by fellow entrepreneur Chris Pearson (founder of Skitch and Comic Life).

“The more choices you give consumers, the less likely they are to do any anything.”

This advice – while seemingly anathema to our free choice, no chains, ‘new economy’ culture – is spot on.

We think we’re doing our customers a favour by providing them with more choice – making the whole thing more about them than us. Surely they will reward us for being so thoughtful and providing them with so many options.

But the reality is that “customers”, while a coherent entity in your mind, are a loose collection of individuals, each with their own attitudes and agendas. Every additional choice you present them with increases the complexity of the purchase decision they are facing. Pretty soon the scales tip and it becomes easier for them to defer that more difficult decision to a later time… which often never comes.

As with many decisions in business and life, you’re better off using your judgement, instinct and, eventually, experience to settle on the right option, then remove as many of the other distractions as possible. If you miss the mark, you’ll almost always have a chance to tweak.

Photo: optimal tweezers (Flickr)

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  • http://www.magnation.com Sahil Merchant

    I understand the point, but how do we reconcile this with Amazon and the new economics of long tail distribution?

    [Reply]

  • http://www.rentoid.com Steve Sammartino

    Sahil,

    I think the key issue is not to compare ourselves with success stories. They face a different set of rules to us. They have revenue, trust, loyal members and momentum. And so there is greater flexibility in their execution than a startup or small business has. Their attention base is so large their ratio browsers/ piurchases has a smaller impact on them.

    Steve.

    [Reply]

  • http://anthillonline.com/author/paul-ryan/ Paul Ryan

    Amazon and other big companies have obvious advantages, but I think choice on pricing is very different to choice of products. Offering multiple prices for a product is where things get complicated.

    I think Webjet and Expedia do a great job of offering extra purchase choices without distracting the customer from their core purchase. You’re booking a flight or hotel, but you also get offered insurance, car hire, etc. But these are largely separate, ancillary purchase decisions rather than altering/complicating the core purchase decision.

    [Reply]

  • http://www.pollenmarketing.com.au Natalie Giddings

    Great point. So glad you said it.

    It comes down to consumer decision making. We love a short cut.
    Effective packaging that portrays product benefits effectively is a short cut. Indeed placing products for easy access and convenience is another short cut.

    Harbouring over a long array of product choices is a dilemma and likely to induce procrastination in many instances.

    [Reply]

  • annemaree fitzgerald

    Is this why the vast majority of consumers around the world shop in supermarkets? Consumer behaviour has not changed – we just want departments. A way of editing and organising. Fresh food to the left, dairy down the back……..that’s design.

    [Reply]

  • http://www.LENSER.com Carol Worthington-Levy

    This rings very true – i just heard about a study here in the US that confirms this too. WalMart is testing this by reducing choices in each department. A well known crafts store is removing the stuff they think they must have even though hardly anyone wants it. And sales sizes are up; plus customers are more satisfied with their choice when there is less to choose from.

    And these findings coincide perfectly with work i've been going in the web world – microsites. I did a microsite for a client this past year in which we pulled a niche group of products out from his existing stock, and developed a new brand, a new site, etc. that was heavily targeting this niche. There is still great selection but nothing that's irrelevant to that niche.

    Because visitors see more of what they want and less of what they don't want, the number of pages visited is almost twice as many as on their bigger site, and the customers are more loyal and more dedicated, with email open rates higher than their main site. People get to see specifically what they want and they get in, shop and get out without distraction. I'd bet there are a lower percentage of abandoned shipping carts, too.

    [Reply]

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