How the Burden of Choice Impacts Your Customers
by Jessica Dreiling, Sr. Consultant, Integrated Insight
Choice is simultaneously a blessing and a curse. We all want options, but often become paralyzed by the number of variables present. In a similar fashion, your customers can feel immobilized by the number of choices presented to them. This concept of “choice overload” has been understood as a cognitive impairment in which people have a difficult time making a decision when faced with many options.
During a recent shopping trip to furnish a house, my husband became paralyzed by the endless choices needed to purchase a sectional: style, shape, design, upholstery, structure, and stiffness. He spent an entire weekend researching options. Several weeks later, he still hasn’t picked one.
I am certain that if I had presented him with two couch options and said, “Pick one; which do you like better?” He would have easily chosen one and felt happy about it.
While large purchases have significant trade-offs when making choices, choice overload impacts small purchasing decisions as well.
A recent consumer report discovered that 54% of consumers experience so much frustration that they abandon e-commerce sites if they can’t choose. 42% admitted to abandoning a planned purchase altogether because there was too much choice.
If consumers cannot make a decision, it is extremely unlikely that they will make a purchase.
Simplifying Products in Travel and Tourism
It is very easy for consumers to experience choice overload when planning vacations. Whether a customer is in market filling spare time or still planning a vacation, make it easy for them to choose your experience by simplifying the presentation of your products.
In most cases, we have found it beneficial for our clients to streamline products down to a few core options. We recommend presenting options in simple, predefined packages or bundles, in a progression of features and price. Simplifying the number of options will help to reduce the burden on the consumer and clarify the value proposition. A menu of three options is easy for customers to evaluate.
A regional tourist destination with multiple attractions illustrates this point. This destination offers a variety of attractions, themed experiences, retail, and food and beverage. The options to purchase an experience online were overwhelming, with dozens of varieties of attraction combos and upgrades being presented together. This contributed to a perilous cart abandonment rate.
By reducing the number of products presented in the e-commerce funnel to three of the most demanded product combinations, the customer was presented with a clear “good, better, best” value proposition that facilitated decision making and improved online conversion by double digits.
Simplification Can Improve the Bottom Line for Restaurants
In the face of the COVID-19 pandemic, restaurants were forced to simplify in order to reduce costs. Simplification involved fewer moving parts and the ability to be significantly more productive. This required less labor, fewer deliveries, lower waste, and improved execution. It also eliminated broad and complex menus that were difficult for restaurants to execute profitability and consistently.
Restaurants realized that a menu does not need to be complex to be compelling. By reducing menus down to the most demanded items, patrons spent less time deciphering options, which ultimately increased table turn time, throughput, and profitability.
Fast-food chain In-N-Out Burger has been deemed the master of simplicity with a menu offering comprised of four product categories: burgers, fries, shakes and drinks. Out of the four categories, only two (burgers and fries) require any real processing at the point of purchase.
Without a complex menu, the average order time per customer is reduced to around 60 seconds. Additionally, the burger chain does not have the typical variability in purchases, standardizing process flows and minimizing bottlenecks. Keeping the menu simple and streamlined has additional operational impacts, such as improved customer service, maximizing labor and machine utilization, and reduced waste.
Ultimately, trying to be all things to all people does not mean you will be more profitable.
Understanding Your Customer
So, how much choice should you provide customers? The ultimate balance any company should aim to strike is the one between consumer appeal and higher sales and revenues. Reaching that goal requires measuring what matters and taking action to improve those metrics.
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