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Less Is More: How To Get More Business By Offering Less

August 23, 2016 Left Field 0 Comment

Wondering how to get more business?

Less is more – It’s an age old saying but how much of it is true and if we were to apply it in our businesses would it actually mean more of the right kind of business?

But it’s kind of counterintuitive isn’t it? The idea of scaling back the services or products we have on offer in anticipation of more sales kind of feels like the wrong thing to do.

We business owners assume that the more choice we offer our customers the happier and better served they are, and the more business we will generate.

We assume, for instance, that offering 30 flavours of ice-cream instead of just two increases the chances that shoppers will find a flavour they really like.

However, research now shows that too much choice is a bad thing for sales; when there is too much choice our customer are in fact less likely to buy at all, and if they do, their satisfaction is lowered.

In 2000, 2 psychologists Sheena Iyengar and Mark Lepper published their findings on a study of jam sales in a supermarket. Here’s a short version of what they found;

The Great Jam Experiment

The experiment was conducted over two days at a high class supermarket in the United States.

On day one, the psychologists set up display table with 24 varieties of gourmet jam and offered potential buyers who sampled the jams a coupon for $1 off any jam on display. On day two, they set up their display with only six varieties of the jam available.

The large display set up on day one attracted lots more interest than the smaller display set up on day two. However when it came to making a buying decision, the shoppers who saw the large display were only 10% as likely to buy as the shoppers who saw the small display.

Remarkable isn’t it?

The Apparent Paradox Of Choice

This is often referred to this as the “Paradox Of Choice”. Some studies have found that as the variety of snacks, soft drinks, and beers offered at supermarkets increase, sales and customer satisfaction decrease.

These studies and others have shown that excessive choice can not only produce what has been called “choice paralysis”, but also can reduce buyer’s satisfaction even when they made good decisions.

Results like the ones gathered in the jam experiment can challenge our beliefs about how best to do business. Both mainstream psychology and business have operated on the assumption that the more choice buyers have, the better off they are.

We believe that more choice makes people feel better and does not make people feel worse. It’s a “bigger is better” approach and it drives modern day economies. The truth in fact, if we take a look around our environment, might actually be plain to see as very much the opposite.

But Choice Is Good, Right?

On the surface, choice appears to be good for us. But its relationship to satisfaction appears to be more complicated than psychologists had assumed. There seems to be a diminishing return in having too many alternatives available.

Each new option can take away from the feeling of satisfaction to the point that no additional benefit is achieved from adding another alternative to the mix.

This finding kind of sures up the idea of going deep and narrow is better than going broad and shallow when supplying solutions to our customers.

Going deep and narrow allows us to get to know our customers better and therefore serve them better. Too many customer types and too many services serves nobody very well.

And if that wasn’t enough reason to offer fewer services, check this out…

You’re Gonna Get The Blame

Too much choice generally requires increased time and effort on the part of the buyer and can often lead to anxiety, regret, unreasonably high expectations, blame and refusal to take self responsibility for their choices if they don’t work out in their favour.

Costs also increase for you as a business when there are a large number of choices. Keeping the number of choices small allows your business to become so good at delivering that service that perceived quality on the part of the buyer becomes a by-product. It often allows you to charge more for your expertise too.

Yeah sure, having more options allows us to say buy more stuff we need from one place – like the supermarket for example. But it may rob us of the chance of a better experience. And experience is everything, it’s why our customers buy from us.

I think you’ll agree that more options and alternatives isn’t always better, either for the customer or for the business. The big question of how to get more business in an increasingly complex business world may not be “how do we create more choice for the customer” but rather “how can we create more value from less choice”.

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Joe Cunnane is the principle of TRA Professional. Contact Joe for Tax Planning & Financial Advice

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