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When the economy and sales are down, entrepreneurs tend to increase the number of products, services and offers they put out there, hoping that more choice will lead to more opportunities to close sales.

Take a step into your local JB-Hi Fi, Bunnings or Target and you will find at least fifteen different brand choices on offer for every product on the shelves. It’s pretty easy to see that retailers have succumbed to the old adage – “more is better”. If shoppers are not interested in one product or service, then surely they must be interested in option two, three or four?

Even a simple purchase like toothpaste or laundry detergent can turn into a ten-minute conundrum. You’ve probably had a similar experience – standing in the aisle at the grocery store and feeling overwhelmed by the 32 choices of toothpaste and the 41 options for laundry detergent. And that’s just the start, because you haven’t even hit the shampoo or face moisturiser aisle yet.

Why do companies make buying so complicated?

This common mistake by companies that should know better, has led to an insatiable compulsion by small business owners to offer way too many choices. When the economy and sales are down, entrepreneurs tend to increase the number of products, services and offers they put out there, hoping that more choice will lead to more opportunities to close sales.

But often with more options comes more confusion.  Scientific evidence now exists to suggest that most businesses (large and small) are losing sales by giving their customers too many choices.

A team from Columbia University conducted a study to determine what impact the number of choices had on sales. They set up a table full of exotic jams outside an upscale grocery store in Menlo Park, CA. Over the course of two days, they offered a selection of either 6 or 24 flavors for sale to 502 shoppers —242 encountered the 24 flavors and 260 were presented with only 6 choices.

For every 100 prospects that passed the table when the display had 24 flavors, 60 stopped to look but only 2 purchased. Surprisingly, when the number of options was reduced to 6 flavors, 40 shoppers browsed and 12 purchased. That’s a 600 percent increase in sales.

So why don’t more choices lead to more sales?

According to neuromarketing research, the part of your brain that decides is a very primitive beast which is only concerned with solving pain and survival. In order to keep you alive, your old brain is hard wired to make decisions quickly and it is easily overwhelmed when too many choices are presented.

In fact, short term memory only allows humans to process about three to four chunks of information at once in the form of letters, words, digits or numbers. On most websites or in-store environments, consumers are now presented with ten or more options at every encounter. This is exhausting and confusing for the brain – which means customers are less likely to buy and less satisfied when they do make a purchase.

Does this mean that every business should cut the number of products and services by 75 percent?

Not necessary, but based on neuromarketing research, it pays to make it easier for customers to decide. When Steve Jobs returned to Apple in 1997, one of the first things that he did was slash the number of models on offer. Apple had dozens of product lines for the consumer and business sector but Jobs cut back to just four core offerings. When deciding which products or services you should keep and which you should discard, it would serve you well to take heed of the advice that Jobs gave to Mike Parker, CEO of Nike. “Nike makes some of the best products in the world. Products that you lust after. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff.”

Choice is wonderful in theory but in most cases, too many options will produce choice overload or buyer’s remorse. When customers are confused they feel stupid. And when they feel stupid, they just won’t buy from you.

And that brings me back to where we started. I am standing in front of a wall of 41 different laundry detergents at my local grocery store, perplexed by what should be a very simple, 20 second decision.

What do you think?

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Rhondalynn Korolak

Rhondalynn Korolak

Rhondalynn Korolak has distilled the secrets to business success - that she learned working in GM level roles with some of the world’s most successful brands - and she produced a simple step-by-step process that you can apply to your message and your audience to close more sales and boost your bottom line. Rhondalynn is the best-selling author of On The Shoulders of Giants, Financial Foreplay, and Sales Seduction. She has appeared on CNN, bNet/CBS, Skynews, Channel 9 and 3AW, and she writes for Yahoo, MYOB, Fast Thinking, Dynamic Business, Business Spectator and Australian Retailer. Rhondalynn can help you put strategies in place to grow your business profitably and ensure that your customers would never think of going elsewhere.

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