Marketing Tips: Are You Offering Too Many Choices?
All or Nothing
After a lovely lunch at a French bakery and restaurant, my neighbor friend and I walked across the street to a tea shop to grab a beverage for the drive home. What a darling place this was! Daintily and whimsically decorated and selling almost every imaginable tea and tea gadget. But that was the problem.
We walked up to the tea bar and asked for an iced green tea (a daily routine for me). The barista pointed out my options on an overhead board that was maybe 10 feet by 4 feet, literally covered with lists of teas available. There might have been up to 60 varieties or more, some choices having "guess what this is" type names. After getting dizzy from staring at the list for a number of minutes, I randomly chose a peach version that was okay, but not something I'd order again. Definitely not something I'd make a special trip to get.
The Problem Caused by Marketing Too Many Choices
We always want choice because we want to feel like we're in control. But when presented with too many choices, we have difficulty processing our options and may be disappointed with any choice we make... or worse, choose nothing at all due to being overwhelmed, as evidenced by the above examples. Translation for business owners: Less sales.
This problem has been referred to as "overchoice," a term reported to be coined by Alvin Toffler in Future Shock (Wikipedia). One of the leading experts in this topic is Sheena Iyengar, author of The Art of Choosing.
How Small Businesses Fail When It Comes to the Issue of Choice
Offering too many choices is an exceptionally critical problem for small businesses and micro businesses. In addition to driving away or lowering sales by overwhelming their customers, they overwhelm their expenses, too, by offering too many options. Added inventory, more warehousing, additional staffing, more marketing costs... the stresses that too many choices can add to a smaller operation are legion.
The "Good, Better, Best" Strategy
Three is a magical and mystical number in many cultures. But it can also be a winner in marketing since it can make it easier for customers to make a decision from this limited set of options.
Offering three levels of choice was made popular by retailing pioneers such as Sears and Montgomery Ward in their heyday. A "Good, Better, Best" range of options was common in their catalogs and in stores.
This range of options is common in many other arenas, too, particularly for services. Many online services today offer a entry-level "freemium" service (the "good"), with upgrades to standard (the "better") and premium (the "best") paid service levels. This set of options usually isn't decided upon by chance, it's by design.
Back to the Tea Shop...
In many everyday product and service marketing scenarios, a "Good, Better, Best" or limited-tier offering structure is practical for both businesses and customers. But can a case be made for offering everything imaginable such as the tea shop did? Yes, with some qualifications.
Some markets are what I would call "connoisseur" markets. In these cases, customers are highly educated on the subtle nuances between product or service offerings. They are looking for the unique, the rare, the elite, the best, the limited edition. Examples would include art, antiques, wine, comic books, collectibles, luxury items, specialty food items, etc. Widely available offerings can be considered pedestrian. So these discriminating customers want choice—even many choices!—because they can easily discern value. The hunt for the most valuable is a game.
As well, a mass customization trend has been evolving. Enabled by technology, manufacturers and service providers can allow their customers to pick and choose from a list of product and feature combinations to suit their needs, the result being a totally one-off product or service. For example, athletic shoes can now be ordered with the customer's unique choice of color and fabric combinations.
Mass customization is a hybrid of marketing strategies when it comes to choice. In some cases, the sheer number of unique feature combinations a customer can order may run into the hundreds or thousands! Yet, the manufactured inventory is kept low because the order is only created on demand. Plus, the range of features that can be selected is often limited, making it more cost-effective for the business and narrowing the field (at least to some degree) for the customer.
With the advent of on-demand and 3D printing technology, this trend can be expected to grow... and offer customers choices beyond their current imagining. But then will we run into the same old "too many choices" problem?
How to Choose Your Choices
So how do you choose what choices to offer your customers? Your choice in choices will depend on:
- Type of Customer. Are your customers connoisseurs of what you offer who may want a lot of choice? Don't automatically say yes! If you ask customers if they want many choices, they will likely say they do, even if they don't really need or want that much field of choice. Research your market's demographics and psychographics to home in on what choice scenario makes them tick... and buy. You might be surprised at how many customers are looking for you to lead them through a logical and limited choice funnel. Once I limited my service offerings, and was very clear about those choices in my marketing, I found that the referrals and inquiries I got were higher quality and lower investment for my business.
- Capacity Limitations. Mass customization and large, varied inventories can usually only be pursued by organizations that have sufficient resources in terms of facilities, time, staffing and money.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2016 Heidi Thorne