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Marketing Tips: Are You Offering Too Many Choices?

Heidi Thorne is a business author with 25 years experience in marketing and sales including a decade in the hotel and trade show industries.

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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

Comments

Heidi Thorne (author) from Chicago Area on April 07, 2016:

Hi Lawrence! Oh my... 10,000 spices. I'm surprised the shop owner could even keep them all straight, let alone his customers. He has a smart wife! :) Thanks for adding that great example to the conversation. Have a terrific day!

Lawrence Hebb from Hamilton, New Zealand on April 06, 2016:

Heidi

Reading this hub reminded me of one time talking with a local Indian shop owner who told me he tried at one time to stock every spice used in Indian cooking, until his wife pointed out there were ten thousand spices! He gave up and concentrates on what he does well!

Last I heard he had at least four shops all doing well!

Great advice here.

Lawrence

Heidi Thorne (author) from Chicago Area on March 29, 2016:

Well, AliciaC, we'll have to school our fave coffee haunts in the too many choices problem. :) Lucky for me, I have only 1 or 2 favorites drinks at the popular spots so I don't have to do much deciding. Thanks for starting out your week here! Have a great one!

Linda Crampton from British Columbia, Canada on March 28, 2016:

This hub contains excellent suggestions, as usual, Heidi. I wish some of the coffee shops that I've visited would follow your advice!

Heidi Thorne (author) from Chicago Area on March 28, 2016:

FlourishAnyway, so thoughtful that you popped in to comment while on college tours. That's a big project! "Choice freeze" is all too common. Glad to see you'll be helping your daughter narrow her field of choice. The process can be overwhelming for both students and parents. Good luck with the college visits! I'm sure you're gathering a lot of material for future hubs with this adventure. :) Enjoy!

FlourishAnyway from USA on March 28, 2016:

I read this earlier but forgot to comment, as I'm with my daughter doing college visits. People can become easily overwhelmed with choices and just freeze. Narrowing the field is a good idea. That's what I'm doing with her college choices, but let's not tell her that.

Mary Wickison from Brazil on March 27, 2016:

That was an interesting article, in fact during that experiment, the older generation fared better than I would have thought.

Thank you for sharing that.

Heidi Thorne (author) from Chicago Area on March 27, 2016:

Blond Logic, I was so curious about the decision making skill in older adults, I had to do some more reading. There was a study on the topic reported in Science Daily. https://www.sciencedaily.com/releases/2015/06/1506...

The study seems to suggest that offering more options for older adults could impact their decision making. Thanks for making me think!

Heidi Thorne (author) from Chicago Area on March 27, 2016:

Billybuc, I'd love to copy the info and hand it out to a LOT of small businesses in my network. Yikes! I don't know how some of them manage the choice load they offer. They're just hoping that they'll hit on something their customers will want I guess. Thanks for stopping by on this Easter Sunday! Hope you're enjoying your holiday!

Heidi Thorne (author) from Chicago Area on March 27, 2016:

Hi Blond Logic! You make a very good observation about choice. I never really thought about how desire or capacity for choice might be dependent on age. Hmm... Now you got me thinking. And, you're right, small businesses need to be very careful in the choice range they offer. Thank you so much for adding that interesting observation to the conversation! Happy Easter Weekend to you!

Bill Holland from Olympia, WA on March 27, 2016:

Such good information, Heidi! I get it, totally agree with you, and wish I could pass this on to a number of retail establishments here in town....my goodness, you are so good!!!!!

Happy Easter, my friend!

Mary Wickison from Brazil on March 27, 2016:

I completely agree with you, I think as consumers we 'think' we want choices but in reality too many choices just confuse us.

I think this is especially true as we get older. My husband gets annoyed at the choices of sandwich options and coffee options available and often leaves without ordering.

I remember my grandmother ordering the same as someone else at the table as she found menu options to much to fathom.

Valuable information which is crucial if small businesses are going to succeed .

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