The Homa Files

TakeAway: Many companies take the approach that giving customers more choices is better.

But, there’s only so much information the human brain can process.

Recent research highlights that giving consumers fewer choices can provide a competitive edge.

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Excerpted from Strategy + Business, “A Better Choosing Experience,” by Sheena Iyengar & Kanika Agrawal, September 27, 2010

When Baskin-Robbins opened in 1953, its line of 31 flavors — one for every day of the month — was a novelty. At the time, such variety was unheard of, and Baskin-Robbins used it to stand out from other chains. …

Today it seems obvious to offer consumers more choice — but the experience is no longer a novelty, or nearly as much fun. …

Consumers have grown accustomed to having a lot of choice, and many people still express a strong desire for having more options. But that doesn’t make it a good idea. There are neurological limits on humans’ ability to process information, and the task of having to choose is often experienced as suffering, not pleasure.

That is why, rather than helping consumers better satisfy their preferences, the explosion of choice has made it more difficult overall for people to identify what they want and how to get it. Thus, if the market for your product is saturated with choice, you can’t gain a competitive edge by dumping more choices into the mix. … You can design a more helpful form of choice.

The goal of a new approach to choice should not be to manipulate consumers into making choices that aren’t right for them, but rather to collaborate in a way that benefits both of you. …To accomplish this, here are four actions you can take:

1. Cut the number of options.
2. Create confidence with expert or personalized recommendations.
3. Categorize your offerings so that consumers better understand their options.
4. Condition consumers by gradually introducing them to more-complex choices.

Offered together, these actions can distinguish your company. Rather than trapping people in a morass of alternatives, you’ll be one of those rare companies whose offerings rise to the top by raising customer spirits. …

Each of these forms of customer engagement can be technologically enabled, for example, through online networks or social media. But the heart of this method lies in better design of the shopping experience, fueled by better awareness of human capabilities. …

From the outset, your design shows them that you understand how they think and respect their desire for both control and simplicity. The message is clear: In the short run, you are helping them navigate a bewildering and even debilitating world of options. In the long run, you are inviting them to choose you.

Edit by DMG

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Full Article
http://www.strategy-business.com/article/00046?gko=13ead

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This entry was posted on October 19, 2010 at 6:08 am and is filed under Mktg - Product Line Mgnt. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.