Limiting choice can improve response

First, I apologize for my absence over the past three weeks.  I’ve been building a new website, Consultant Launch Pad, which is designed to help new consultants and people whose job searches may be at a point where they have to think about alternatives to pay the mortgage.  We have a lot of resources on the site to help you make your decision, set up your business, and get customers.  I invite you to come take a look.  Let us know what you think, suggest resources we don’t currently have, and join the Forum and ask — or answer some questions.  I think you’ll particularly like the 30 Second Launch Pad feature.

Anyway…

Too much choice can be paralyzing

I’m one of those people who believes that if you hear a good idea from three different sources, it’s probably worth paying attention to.   Today’s idea is Limit Choice.

It started with coming across Groupon, which is one of those businesses where customers are a great deal on a single item.  The deal depends on either a certain number of people taking it or it’s there until the supply runs out.   I signed up and while I haven’t bought anything yet, it’s true that the deals are great and I anticipate I will participate before too long.

A few days later I was listening to an interview where Gary Vaynerchuk, the author of “Crush It,” was offering some advice to start-ups.  He’s a bit over-the-top, but one of his pieces of advice had to do with simplicity and limiting choice.  Gary was talking about how he had tested the “Groupon” model in one of retail wine story by replacing a rack near the front that held 10 bargain wines with just one.  The result?  “We’re crushing it,’ he said.  “We’re selling these bottles at a staggering rate, one that trumps residual loss of not selling many products in that space.”

All this reminded me of one of the key “rules” we followed when offering credit-cards through the mail in a previous life.  We tested everything and inevitably found that Choice Suppresses.  The more variations on a card offer — different designs, different pricing, different value propositions — the fewer responses we received.

The reality is that people are overwhelmed these days.  We bring a lot of that on ourselves — travel teams, dance classes, and the like — but at some point businesses decided we needed more and more choices.  So that’s why today I can walk into a store and find razor blades with four, five, and even more blades when one can really do the trick (at a fraction of the price).

Think about places where you might be offering excessive choice to customers and what impact that might be having on their buying decision.  Are there opportunities to reduce the choice — perhaps by careful targeting of benefits — and actually increase response?

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