Rows of Jam on a Market Stall

It sounds counter-intuitive. Surely if you want people to buy more, you have to offer them more? Well actually, research has discovered that too much choice has the opposite effect.

Have you ever gone to a restaurant and looked at the menu and just felt overwhelmed at the amount of choice? Sometimes there are so many things that you like the sound of on the menu that you are worried about making the wrong decision! We have all experienced buyer’s remorse in a restaurant when a friend’s dish turns up and you wish you had ordered that.

However, a restaurant is an unusual scenario. For one, you are usually with other people (unless your first name is Billy or Norman) and you have pre-booked your seats. Therefore, in this captive audience scenario of a restaurant, it is unlikely that you will abstain from making a decision.

In lots of other buying situations though, it is proven that too much choice actually makes it less likely that someone will purchase. Imagine browsing online or within a shop and comparing lots of alternatives. Many of us would walk away safe in the knowledge that we hadn’t made the wrong decision…. simply because we avoided making a decision.

In a psychological experiment carried out in 2000, by researchers from Stanford University, a simple market stall was used as the basis for the research. On one regular day at the food market people would find a display table of 24 different kinds of jams. Similarly, at the same market on another regular day the same stall only presented a choice of 6 different jams.

Now, although the bigger display generated more interest, people were found far less likely to purchase a jar of jam than they would have from the smaller display. The results were not marginal either. The smaller display resulted in it being 10 times more likely that a purchase would be made.

Now let’s put this into the context of marketing. If you are spending marketing budget on attracting people to your stall, firstly you want to make sure you are talking to the right potential audience – in this case jam-eaters. Secondly you want to give yourself the best opportunity to maximise conversions from that audience into paying customers. If you spent £25 on attracting 250 people to you stall and one delivers you 15 sales at £1 profit per customer and one delivers you 150 sales at the same rate – then one loses money and one makes considerable profits!

This isn’t all about foods and jams though. Similar exercises have taken place across other sectors such as clothing and the results have been the same!

In 2015 the Journal of Consumer Psychology published an article which analysed a total of 99 ‘Choice Studies’ and specifically looked at those cases in which reducing choices helped to boost sales.
The four criteria they identified that motivated consumers to buy were:

1. When people want to make a quick and easy choice
2. When the product is complex (so fewer choices)
3. When it is difficult to compare alternatives
4. When consumers don’t have clear preferences.

So, think about your own business. Is your offering simple or are you over-complicating the purchase decision? How much competitive choice is there in your marketplace – is there anything you could do to make comparison difficult? Are you making buying process as quick and easy as possible?

So before you decide to add another service or product line to your offering consider whether it is really required. Don’t just consider the cost to the business of listing the new line, but consider the potential implications of it making the purchasing decision more complex.

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Ian is the founder of Opportunity Marketing marketing, with over 18 years of experience in successfully setting up marketing departments, creating marketing strategies and implementing these strategies across a wide number of SME companies in both the B2B and B2C sectors through a variety of channels.