Too Much Choice Can Kill Your Sales Deals

And welcome to this week's episode entitled Too Many Choices Can Kill Your Sales Deals. Well, how can that be?

Surely, if we provide our clients with multiple choices and options, a smorgasbord of delight and array of products and services, they've gotta be impressed and excited and be able to be customize their solution.

I mean , let's say that you're a commercial flooring company. You've spent years perfecting your range.

You've got a variety of materials, colors, patterns, and finishes to offer, and your clients have gotta be impressed with all of that. But hold on. That's not necessarily the case.

Let's, let's go back to a little bit of science, a little bit of research. In fact, in I think it was the year 2000, a couple of researchers at the Columbia and Stanford universities conducted some behavioral science experiments to see the impact of choice on decision making. And so they, they conducted this experiment. It's quite clever, really. They set up a display of gourmet jams in an upscale supermarket. You, you've seen those right arrays and arrays of different flavors and colors.

Customers were allowed to sample these jams as they walked by, and the researchers varied the number of jam flavors available from six at one point there were six available, and at another time there was a whopping 24 different varieties of jams and jellies.

Now, what do you think the results were? , so think about this for a second. You can either taste 24 different jams, or you could taste six jams.

What do you think, where do you think the sales mostly came from?

Well, here's, here's the actual findings.

When there were 24 different jam choices, 3% of the customers made a purchase.

However, when the choice was limited to just six varieties, the purchase rate jumped to 30%.

10 times as many sales with fewer choices! Now think about that when you are putting your flooring bids out.

For example, would you like to put 20, options out with 24 different material choices and colors and find that only 3% of your bids get accepted or, you know, having just six varieties of your offer and 30% of the people buying the product. I'm sure you'd prefer the latter.

And this isn't, um, an isolated case. Even the formidable Proctor and Gamble. I forget how much, but I think Proctor and Gamble spends like a billion dollars in advertising every year. They invest significantly. So they know, they know a bunch of things about presenting offers and about advertising, and you probably use one of their products, or at least heard of it, the Head and Shoulders shampoo is one of their brand names a big, big seller for them.

And they had 26 different varieties of head and shoulders. I mean, can you just imagine walking into your, your local supermarket and going down the shampoo section and you think, oh, you know, your spouse has said, oh can you pop in and get some shampoo.

Yeah. Get, get some of that head and shoulders.

And you go down to the aisle. And there's 26. There's one for dry hair, , greasy hair, , combination hair, more dandruff, less dandruff, gray hair, white hair. Full head of hair, bouncy hair. I mean, you do, you just are gonna be overwhelmed!

And so what they did was they reduced their range of shampoos from 26 different head and shoulders varieties to 15, and they got a 10% increase in sales.

Wow. And that's a lot of shampoo that they're selling, more shampoo they're selling. and think about the complexity in their supply chain. Right now they've only got to stock, 15 different units. They've only gotta ship that many. They can keep track of, of, of that many. They're gonna buy the ingredients or the packaging in bulk for those and gonna make everything a lot easier for them. Not only do they get a 10% increase in sales, so they've significantly decreased their working capital, holding different types of shampoo bottles here and there. 'cause they went from 26 to 15. So huge, huge impact on working capital, releasing cash.

And if you are a small business, you don't want to be holding millions of different stock keeping units and lots and lots of different colors and material choices. Or indeed have to source that, okay, you might not be holding it in your warehouse, but you've still gotta go and work with all of those suppliers, keep those relationships in check, make sure you get in the right kind of pricing, you know, adds a lot of cost and administrative administration to the whole process.

So what's happening here now, it might seem counterintuitive, but offering too many choices can actually confuse your buyers, and it leads to what's commonly known as "Analysis Paralysis". Your buyers become so overwhelmed by the sheer number of options. They come become confused. They disengage from the decision making process.

You know, you've been working with somebody, you know this has happened. You get you really, really well. You've presented lots of options. You've given them lots of choices, and then they ghost you. They don't call you back, and you don't get a decision. And in the end, you give up and you, you move on to the next deal and try and sell, sell the next opportunity.

 There's a , a second thing that's that Gartner, discovered. They found that when customers are burdened with excessive choices and they are left to, to ask you questions about it, which is kind of a reactive selling approach. They report a decrease in the ease of making purchasing decisions, and they also have a significant higher degree of regret ,buyer's remorse post their decision.

The actual numbers from this study, you'd look it up it's called The New Sales Imperative by Nicholas Toman, T O M A N, and Brent Adamson and Christina Gomez. And that was published in the Harvard Business Review in 2017.

18% of the buyers said it was easy to purchase and make their decision.

Yet 50% of them had regret post-decision 'cause there were so many factors that they needed to consider that they didn't know that they'd made the right choices.

Now, when the sellers assumed a more proactive, approach. In other words, they guided the customer. Many of your customers, prospects, they don't know how to buy your service.

They're looking for you as an expert to tell them the pros and cons. They want you to be a trusted advisor, particularly as the, the dollar value of the product goes up, the complexity of the project, goes up. And what this study found out was when customers were. Shepherded through that sales process and the seller guided them.

There was a significant reversal in those findings.

In other words, 86% of the buyers felt that it was an easy purchase. So it went from 18% who said it was easy to, 86% was easy. And when, when there were lots and lots of choices and no guidance, remember that 50% of them had buyer remorse.

Well, in this process where they were guided, only 37% had any misgivings about their purchase.

So you sell more. And your customers are much happier when you provide fewer choices.

So let me give you seven simple strategies to help you help your prospects navigate the complex buying process. And that's gonna give you more sales and more happy customers.

So number one, take a chainsaw to the clutter. Rip through the underbrush of choices like a chainsaw, wielding, lumberjack Trim down your options to a focus selection that's easy to navigate. Less choice, more clarity. It's a war cry: less is more. Typically when I'm putting proposals together, I'll generally put one proposal together if we've gone through a good discovery process.

Sometimes I might give them an option A or an option B. One's more , expansive higher price, higher value. So they have got a choice. I find they start giving them three or more then it adds so many questions and problems to the sales process that it actually hinders it.

So, number one, chainsaw the clut clutter.

So number two. The art of segmentation,

when you've got many, many different choices, you can group your products like a commander marshaling their troops segment based on different uses, different preferences, or even different levels of expertise. So if it's a floor, it may be, here are some hard wearing use cases,.

If it's an acoustically sensitive environment like a church and you want some areas that can deaden the sound, you can give some options in there. So you're segmenting based on, based on on the how the product might be used.

Number three, use limited edition as a tactic.

Whenever you see limited edition of something, it kind of triggers a buying frenzy.

You wanna embrace that. So offer them limited editions that kick that fear of missing out into overdrive. It's like dangling a carrot before your customer's curious noses.

Number four, edgy bundle mastery.

You want choices, but not too many. So bundle related products into smart packages, just put all those elements together into groups and packages.

So you're still letting them make choices, but they're curated and they fit more like a glove.

Number five. Decision Speedway.

Some days you'll have prospects and customers who want to breeze through decisions like a ninja. You've gotta be, you've gotta be sensitive to that. So you wanna be offering them streamlined choices for those people who haven't got time to do all of that. I haven't got time to review all that. It's a fast lane for the indecision highway. There's always a small percentage of buyers who just want to go in and out and just get to the decision. So make sure that you've got an easy offer that they can just pay.

Number six, nudge them well.

So you wanna leverage here the power of suggestions. Highlight a few options as your top picks or customer favorites. You know this, when you go into a new restaurant, there's like a million choices and you've got this menu out and you've got no clue.

What's the most common question that the wait staff get?

What's the most popular dish here? What's the favorite? What does the chef recommend?

And it helps you you navigate those 57 different items on the menu, and now you're only looking at three or four, and it's much easier for you to make a decent choice.

Number seven is the, make it a no-brainer.

Create choices that are just so compelling that they must be acted on. It's, it's kind of stupid if I didn't buy this. It's so very, very easy.

 Hopefully those seven tactics might help you. Think about choice.

Choice is a double-edged sword. It can be your ally, or your foe depending on how you wield it.

But make sure that you trim the fat and focus the selection, and then lead your customers through a discovery based process to navigate the maze of choices so you arrive at one or two offerings that they can select at the end.

Remember the mantra?

Less is more.

If you do your job well, less is more and you're gonna have less dissatisfied customers and you're gonna have more sales.

Hope you enjoyed this week's podcast and we'll see you next time. As ever, if you wanna reach out to me, you can get me at www.speaktomick.com. That'll take you straight to my calendar and you can schedule some time and we can have a chat about your business and business growth. See you next time.