Doing More with Less: Fewer Product Options Can Be a Valuable Differentiator
March 16, 2011 3 Comments
In my last post Is There Really Such a Thing as Too Many Choices?, I looked at how too many product choices can leave customers frustrated and unhappy. Everyone says they want more product choices, but studies have shown that more choice equates to less sales, sometimes by a factor of 10.
Most brands ignore this simple fact and continue to pump out new variations to give consumers what they ask for – more product choices. Because of this, offering fewer product choices (resulting in an easier purchase decision) is a huge differentiator in this cluttered market.
Here are some examples of doing more with less product choices:
Trader Joe’s
Most grocery stores carry around 40,000 different items. Trader Joe’s takes a different approach and stocks about 4,000 items. With all of the different choices, choosing an item at a grocery store can be a stress-filled experience – brand names, price, size options, flavor differences, ingredients. At Trader Joe’s, instead of choosing between fifteen or twenty types of Italian salad dressing, you are given only a few options. This makes for a better shopping experience and shoppers are often much happier with their purchase decision.
Apple
When discussing the topic of simplifying the customer experience, Apple has to enter the conversation. They integrate this approach in all of their touchpoints, including the purchase process. They offer limited varieties of their products to minimize the amount of buyer confusion. Looking to buy a new desktop computer? Apple offers four variations of the iMac. Compare that to other computer manufacturers whose vast number of options can drive customers away; Dell currently offers 119 different types of desktop computers.
In-N-Out Burger
This West coast burger chain offers only four food items on their menu; three burger varieties (hamburger, cheeseburger, and “Double-Double”) and French fries. This minimalist menu is the polar opposite of McDonald’s endless menu choices. (Click here to see a comparison). Limiting product choices has enabled In-N-Out to beat the almighty McDonald’s in average sales per store.
The world’s most popular search engine has always been about simplifying the complexity of search. Their homepage doesn’t distract users and offers them a clear choice. There is power in simple.
These are some examples of brands that make the purchase process easier by limiting choices. There is a difference between listening to what customers want (more options) and truly understanding what it is they want (fewer options). Choose wisely.
About Donald Cunningham
Donald, This is a very insightful article, especially because your premise seems counterintuitive. It shows that you understand consumer psychology. The confused mind says, “No.”
I think the phenomenon relates to a general problem of clutter, confusion and overwhelming complexity in modern life. For example, the information overload on the internet makes it difficult to concentrate and focus on the “vital few” amidst “the trivial many,” according to the Pareto Principle.
Peter F. Drucker, the great management icon, wrote that most managers over-extend their product lines because complexity rewards their egos with more stuff to “manage.” He recommended focusing on only what one does best. (Perhaps it is ironic that he wrote 35 books
In networking and social media we think we want to maximize the quantity of contacts, but the quantity interferes with the quality of our relationships. See blog post, “Traffic Jams on Facebook and Twitter,” at http://relatingonline.com/archives/505
Thank you for the comment Buddy.
I agree, our world today is as cluttered as ever, and will continue getting more and more complex in the future. One trend I’ve noticed recently is the emergence of ‘retro branding’ as a way to take customers (who are overwhelmed with this complexity) back to simpler times. For instance, Pepsi and Mountain Dew have been offering ‘throwback’ versions the past few months. The results have been positive, adding about $110 million in incremental sales.
I too believe quality trumps quantity, regardless of whether you are on the super information highway or main street. Instead of targeting the masses, why not target the few who influence the masses? For instance, don’t target the entire church congregation, target the minister. This approach is more effective and MUCH cheaper.
Well written and excellent examples. Enjoyed reading this and will look forward to your next post.