Today’s article is about a very common mistake startups make and that is giving customers too many choices. Refereeing to KISSmetrics recent blog post, Neuromarketing blog post, or Think Consulting Group blog post, we can conclude that many choices paralyze customer’s decision making process, or as some say it leads to a brain freeze. This eventually leads to a negative outcome – no customer purchasing decision, thus less sales. Why? Well think about yourself and your decision making process. How many times you made a choice when exposed to tons of information? How many times you made a choice when you’ve been offered thousands of products? Or how many times you made a choice when you’ve been offered products with bunch of features and you needed to compare all of those features in order to make the decision? Didn’t you feel confused in such situations and after some time you just gave up and left the store? And this brings us to the point that that the more choices you give the less sales you get. So let’s see what the problem in fact is and what to do.
The Problem
Very often startups are not aware that offering too much is actually hurting their sales. One might think that giving all the options you could provide has greater chances of reaching more customers. And this might be true. You might reach more customers, or visitors when offering more options as compared to offering fewer options. But what’s the conversion rate? How many out of all those customers who will stop by and analyze the options will in fact make a purchase? In its great blog post, KISSmetrics reports the findings of one study which aimed to clarify this issue. So what was the study about and even more important what were the results? KISSmetrics writes: “Sheena Iyengar from Columbia University set up a table laden with jams outside of an upscale grocery store in Menlo Park, CA. Over a period of two consecutive Saturdays, research assistants dressed up as store employees and offered samples of either 6 or 24 flavors of Wilkin and Sons Jams, a British jelly purveyor known for exotic flavors. Prior to this study, the common marketing theory was that more choices are better for customers. People like more options, so providing more flavors should lead to more sales. The results from this study proved otherwise. During the time periods when 24 flavors were offered, 60% of people stopped to sample the jams, compared to 40% when only 6 flavors were offered. These numbers seem in favor of more choices, but the important question is this: which group purchased more? Of the customers who sampled 24 flavors, only 3% purchased, but of the customers who sampled 6, 30% did the same.If you run those numbers based on 100 people, 60 would stop when 24 flavors were offered, but less than 2 purchase (1.8 to be exact). When 6 flavors were sampled, 40 stopped at the table, and 12 purchased. Which table would you want your products to be on?” Thus, we can conclude that contrary to what many people might think, offering too much is actually a bad thing and huge pain for customers when making a decision.
The Solution
1. Give fewer choices
- MVP (Minimum Viable Product). In one of our earlier posts, Minimum Viable Product, we talked about the MVP concept which is part of the Lean Startup theory (check the article if you are interested in this concept). Eric Ries and Steve Blank are one of the greatest supporters of this concept. “Based on his previous experience (one start up failure and one start up success- the IMVU) Ries argues that if you have too many features, but no customers who like them, then none of them will react. There will be no feedback and your product will die. On the other hand if you offer a product with fewer, but optimum features then you leave space for your visionaries to fill in the gaps”, we wrote in one of our earlier posts, Startup Evangelism: Sell your dream to believers.
This solution is more related to product development. What about marketing aspect? KISSmetrics gives great advises:
- Enable limited share options: “If you want people to share your content, it’s best to give them a limited number of ways to do so. The optimum number can be found through testing, but the idea is that you’ll likely get more shares from fewer options than from making choosing difficult by offering every possible sharing link”,writes KISSmetrics.
- One offer in E-Mail campaigns: “When it comes to e-mail marketing, you don’t need to make the entire sell in one e-mail. Instead, you’re trying to convince readers to take one action. You want them to click through to the site to learn more or make a purchase”,advises KISSmetrics.
- Keep Home Page simple: “Good design is not when every possible feature is included; it’s when every possible feature is removed that can be”,suggests KISSmetrics.
2. Create relevant choices:Andy Johnstonwrites forThink Consulting Group that giving relevant choices to customers is critical in the decision making process. So, how to create relevant choices? He suggests 4 tips on this: 1) Learn before they choose (find out what your customers needs and wants are, what their priority is), 2) Customize choices (give your customers option to customize choices, thus to easily eliminate non – relevant options. In this way you will help yourself to find out more about your customers’ needs and wants ), 3) Present a path (if you know your customers well then you know what they want to happen, how they want to happen, you know the way they think when making a decision thus give them a clear path that will follow the flow of their decision making process), and 4) Make it easy to buy (group relevant choices together)
A few examples
KISSmetrics provides various good and bad examples of choice offerings.
Our final advice: test, test and test until you identify your optimum number of choices. Give you customers just enough choices they need. This will surely help them make a decision and will eventually contribute to your sales increase.
Really amazing blog!