Marketing Strategies – “More Choices = Less Sales”

 I found this fantastic article over that the Neuromarketing blog.

As consumers, we make hundreds of choices each and every day. For those of us who are parents, we make so many more on behalf of our young children. No wonder that by the time it comes to dinner and the question “What are we going to have for dinner” just hangs in the air…

But did you know, that giving your customers too many choices actually inhibits your sales? A 2000 study at Columbia University compared consumer behaviour when faced with a selection of either six or 24 gourmet jams in an upscale grocery store.

Whilst the bigger selection actually stopped people to check it out – 60% vs 40% for the limited selection, the interesting fact was in the actual conversion. Whilst 30% of people who stopped to look at the limited section made a purchase, only 3% that looked at the larger selection actually purchased one.

Let’s run some figures on this - You have 250 people in your store in your jam isle. Of those 250 people, 150 of them stopped to look at your larger selection, whilst 100 of them looked at your smaller section. 30 people actually bought a jam of the limited selection for $5 (example only), which made you sales of $150. Only 5 people bought the same jam from the larger selection, amouting to a mere $25.

Which amount would you rather?? And all for offering less!!

Why does this happen?

According to some further research by Kathleen Vohs at the university of Minnesota, too many choices can sap one’s stamina and ability to stay focused. So rather than making the choice, they throw their arms up and say “I give up!” and walk away. I’ll bet you have done this before – especially in the shops. I know I have!

So how can you choose the right amount of products to offer?

 Well this depends a lot on your industry and your customers. Some good market research would help here. Think though about your customers time. Do they spend time looking over your product? Do they take their time about a decision? Do they absolutely positivitely need your product?

If a leisurely decision can afford to be made, then you should be ok to offer a few more products in your selection. If those people looking to buy your products just want  to grab one and forget about it, then fewer choices is the way to go.

Customer Guidance will always help. Imagine if you were in that grocery store above, and someone walked over to you and asked a couple of questions about your preferences, would you be more inclined to buy – now that your choices have been limited? You bet you will be!

Even if you have an online store and cannot be available to talk to your prospective customers, have a think about this when writing your descriptions of your products. Give them some guidance in the form of : ” If you have children who like to climb and hang of things, then our tear-free range of kids clothes is more for you” (for example!) This also helps to direct your prospective clients around your website, and help your conversion rates.

Read the full post over here.