Why Less Is More When It Comes To Choices

When deciding how many products or services to offer your clients, how do you settle on a number? There are many facets to making a successful business transaction, and according to To Sell is Human, one factor is how you choose to frame your product or idea. One important frame is known as the “less frame.” This refers to situating your product in terms of quantity--will you choose to offer 70 variations of health insurance plans or 10? Although your instinct may be to offer as many options as possible, studies have shown that limiting choices actually leads to better sales.

This now-famous study explored the consequences of offering a multitude of choices in a retail setting. In the study, professors Sheena Iyengar and Mark Lepper set up testing booths at an upscale grocery store known for its extensive selection of products. On a given Saturday, the booth contained samples for 24 different types of jams. 60% of shoppers stopped to try a sample, but only 3% ended up buying the jam. The next Saturday, the booth contained only 6 different varieties of jam. This time, only 40% of shoppers stopped at the booth, a decrease from the first weekend. The surprising difference, however, was that 30% of people who stopped at the booth with fewer options ended up making a purchase.

This experiment showed that while having more choices may increase the number of people who consider or try out your product or service, when it comes down to the bottom line of actually making a purchase, having an excessive amount of choices hinders sales.

Applying the “Choice Theory” to Your Business

Whether you sell products or offer services, here are a few tips for making the most out of your small business processes.

• Give the consumer some choice. Although too many choices leads to overwhelm, there’s no doubt that having multiple options is nice. Consumers like to have some deciding power in a decision, and a wider selection often means appealing to a wider audience. Just make sure not to offer too many choices--it’ll leave the consumer with too many options to weigh mentally, which may turn a simple decision-making process into a stressful event.

• Categorize products into larger groups. If your business does offer a large number of products and there isn’t an easy way to cut down the selection, grouping similar products or services together is a way to minimize the appearance of too many options. For example, if you sell 100 types of paper, breaking that down into a few main categories such as “home and office” and “arts and crafts” can make even a large selection seem manageable, which is ideal for a customer.

• Don’t underestimate the power of habits. This means not making too many changes to your product selection. According to this article, for certain purchases, especially for everyday items like toothpaste, people put on “blinders” when in the store. If they have always used Colgate toothpaste, they’ll continue to use the same one for extended periods of time without considering other options. Once their favorite product changes, however, or a plethora of new items are added to the brand selection, the customer may become overwhelmed and switch to a new brand altogether. To avoid this, keep popular items relatively unchanged, and don’t offer too many choices altogether.

• Remember that all choices are important, big and small. Choices are an integral part of the daily life of a consumer--according to this article, Americans make on average 70 choices a day. In this TED Talk, Sheena Iyengar explains how widespread this choice theory really is--when a group of Americans was offered retirement plan options, there was an inverse relationship between the number of choices and the likelihood of participation in a plan. The more plans that were offered, the less likely a participant was to opt into a plan. Since quantity of choices can affect even big picture and high impact decisions such as planning for your financial future, you can bet it will affect the success rate of your sales as well.

All in all, how you frame what you’re offering is key to using the “less is more” technique to your advantage--while keeping the customer’s focus on a select number of products or options, the customer’s mood will move from being overwhelmed to being open to exploring each option clearly. This is much more likely to lead to a purchase, as well as a more satisfying experience for the customer.