To Make More Sales, Offer Fewer Options, Not More
How the paradox of choice affects consumer decisions
Every morning I go to the store to buy fresh groceries for the day. My trips are typically pretty quick — 4 to 6 minutes in the store — as I grab some protein and vegetables and self-checkout.
At my store, the meat and produce sections are on opposite sides of the building. Today, as I was walking after picking up my chicken, a sign promoting a new brand of potato chips caught my eye.
Now craving chips, I stopped and turned into the aisle. It had been a while since I’d last bought chips, and the number of brands and flavors were mesmerizing. There were probably over 50 different options in all. I was salivating just thinking about my favorites: Cheetos, Cool Ranch Doritos, Ruffles Cheddar & Sour Cream, Lay’s Classic, Fritos, Lay’s Sour Cream & Onion, Kettle Brand Backyard Barbeque…
But as I viewed all of the bags of chips, I couldn’t decide which one to buy. I paced back and forth along the aisle for eight minutes, but there were so many that I couldn’t pick out one that I wanted the most.
Eventually, thoughts like “do I really need chips?” and “I probably shouldn’t buy a bag, I already have ice cream at home and that’s unhealthy enough” started creeping into my head and I left without buying any chips.
What happened? Shouldn’t lots of options be good for customers? Isn’t that what people want — more choices?
Too Many Jams
In a study conducted by a professor at Columbia University, a research team set up a booth of samples of jams in a California gourmet market. Every few hours, they switched from offering a selection of 24 jams to a group of six jams.
When there were two dozen jams to choose from, 60% of customers stopped to get a sample and 3% of them purchased a jar. When there were six jams on display, only 40% of people stopped. But here’s the interesting part: 30% of them bought a jam.
Contrary to popular belief, too many choices can be bad for sales. Just like in my experience in the chip aisle, customers can be attracted to a large number of choices, but when it comes time to make a purchase, too many options can make decision making difficult and lead to fewer sales.
How People Choose and the Paradox of Choice
To figure out how to combat choice overload, you must first understand how people choose. Here are the steps of decision making:
- Figure out your goals
- Evaluate the importance of each goal
- Array the options
- Evaluate how likely each of the options is to meet your goals
- Pick the winning option
In short, decision-making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.
The more options you have, the harder it may be to make a comparison across products, and the more likely you won’t complete the decision making process.
There are also psychological implications of over-choice. Decision-makers in large choice situations enjoy the decision process more because they feel more responsible for their decisions. At the same time, having more choices increases the chance that a decision-maker will make the wrong decision and regret it.
These opposing emotions contribute to cognitive dissonance and cause the chooser to feel less motivated to make a decision at all. In another study, it was found that when people were given a choice of different variants of the same branded toothpaste, people would rather avoid the pain of having to decide altogether and opt for a brand with only one option just so they don’t have to go through the potential regret of choosing the “wrong” option.
Less Is More
Reduce complexity for customers to increase consideration, engagement, and sales.
Offer fewer options: It may seem counterintuitive in the age of personalization, but options need to be limited to maximize sales. A lot of founders ask me “what happens if [a specific type of customer] comes along and they want [a specific option] and we don’t have it — wouldn’t I be losing out on potential sales?” I always tell them to look at the big picture, focus all of their resources on making their top target demographics happy, and ignore the others. If you spread yourself out too thin trying to please everyone, you’ll most likely end up pleasing no one. Unfortunately, it’s quite common to see brands undermining their efforts with good intentions. Don’t be one of them.
Give information that guides your customers: If you do provide a lot of options, you have to make it as easy as possible for customers to compare features across products and help direct them to a final decision. In my experience, most companies provide plenty of information about their products and features (which is great) but do very little to actively facilitate easy decisions.
Your goal is to help customers feel confident about their choice, so you need to provide tools that allow customers to identify and weigh the features that are most relevant to them. This requires you to think about your customer’s unique journeys, answer why a particular person should buy Product A instead of Products B, C, D, etc., and lead them through that process. Be a proactive marketer; sometimes people subconsciously want to be told what they want (they may not even know what they want until you tell them).
Make the choice for them: I see more and more e-commerce startups trying this strategy. One of my company’s clients, Panty Drop, sends you a secret curated box of underwear based on your preferences. You don’t see the product before it arrives at your door. Keep what you like, send back what you don’t, satisfaction guaranteed. Or instead of asking your customers an open-ended question (“feel free to choose between any and all of these options”), try asking them a simple yes or no question (“do you want to buy this?”). Another startup I advise pre-populates the carts of every site visitor with “staff picks” of their best-selling products. Aggressive, right? It resulted in a shorter average website duration, but drastically increased sales.