Why having more product choices sucks

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More product choices kill your profits. It's a crime we see 9 out of 10 businesses doing. It's criminal.

Common wisdom is wrong

The common wisdom goes: "The more product choices you have, the greater chances you'll have at increasing buyers." Of course, this is justified by the following: "A product may fit one person, but wouldn't fit somebody else; therefore, we will build another product such that it fits every-single-frickin-person-that-inhabits-our-world." Too bad. Companies are losing profits faster than Michael Jackson getting another face-lift. More importantly, customers are receiving less perceived value because the less superior products are distracting them from the gems.

More products choices kill profits. It's in the study.

Columbia University's Sheena S. Iyengar and Stanford's Mark R. Lepper studied the difference between exposing customers to a 6-chocolate counter and a 30-chocolate counter:
In the choice conditions, participants chose and sampled a Godiva chocolate from a selection of either 6 or 30 varieties of chocolate; in the no-choice conditions, participants were assigned a chocolate to sample from a selection of 6 or 30. At the time of choice, participants reported enjoying the process of choosing a chocolate more from a display of 30 than from a display of 6. Subsequently, however, participants in the extensive-choice condition proved least satisfied with and most regretful about their sampled chocolates, whereas participants in the limited-choice condition proved most satisfied with and least regretful about the chocolates they sampled. No-choice participants lay in the middle.
Makes sense: the more product choices you have, the more you'll have to reject. It's the whole psychological factor: you've made a decision, but you could very well be wrong with the many other choices that you rejected.

The California Burger Joint Study

There's a fine burger establishment by us that could very well rival California's favorite, In-and-Out. The meat's juicy, the breads are toasted, the cheese deliciously melted, and it's cheap. The problem: too many other items on the menu to distract newcomers from the main product. Instead of getting that, people are buying salad. Salad. That's why no one knows about that secret palace of ours. In-and-out, on the other hand, has essentially one product: its cheeseburger. You could, of course, get it without cheese, or get it with two patties. Yes, they do have more options that you could style your burgers, but hide them from the general public (e.g. Animal style, 4x4, etc.). Yet, they do that for a reason: to not distract newbies & general people from their gem. It's simple sweet, and boosts customer confidence and value because the joint guides the customer to an easy, single, let's-not-think-of-what-to-reject product. Meanwhile, it doesn't lose out on its more dedicated fan-base with a secret menu. Genius.

"What do I do now?"

Look at your product portfolio. Cut it in half. Then again. Then once more. Now, slowly but surely, watch your profits rise as you increase customer value and customer confidence. If you don't see it rising, contact us. We'll make sure to help you increase your profits, personally. Word.

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Posted on May 26

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