EXECUTION INSIGHTS

Applying the ‘Less is More’ Strategy

SwissAKnifeIn a well known marketing experiment, researcher Sheena Iyengar of Columbia University explored consumer buying behavior by observing consumers shopping for jam.  In the first part of the experiment, consumers were presented with 6 jam choices. On average, 30% made a purchase decision.  Surprisingly, when the selection was increased to 24 flavor choices, the purchase rate dropped to just 3%.

How could this be?  Isn’t providing customers with more choice a better strategy?  Actually, research shows that exactly the opposite is true.  Providing buyers with too many options significantly decreases the chances of them buying at all:

  • In 2013, Forbes Magazine contributor Carmine Gallo found that for one large retail chain, the key to success was limiting consumer choices to no more than 2 or 3 options.
  • In “The Paradox of Choice”, psychologist Barry Schwartz argues that too much choice creates buyer anxiety to a point that it paralyses them with indecision.
  • Princeton philosopher Walter Kaufmann coined the term “decidophobia” to describe the stress created by too much choice resulting in fear and inability to take action.

The ‘less is more’ concept doesn’t just apply to consumer buying decisions.  It applies in many other areas of business success:

  • Strategic Priorities – In 2011, consulting firm Booz and Company looked at revenue growth compared to the number of strategic priorities companies had.  They found that the highest revenue growth companies had only 1 to 3 firm wide strategic priorities compared to lower performing competitors who had as many as 10.
  • Target Market – Al Ries, prolific author and thought-leader in branding and marketing, argues that the strength of any brand is inversely proportional to its breadth.  The broader a brand’s target market, and the number of customers it intends to serve, the weaker its position in the industry.  Seth Godin says it a different way – “A product for everyone is a product for no one”.
  • Managing Workflow – Time-management experts repeatedly talk about working smarter not harder.  The essence of good time management is to say no to many potential tasks in order to give more attention to higher priorities.  Essentially, doing less activities results in more results.
  • Product Benefits – Doug Hall, author and founder of Eureka Ranch, conducted research on thousands of product brands. Hall found that products that used three or more benefits in their promotions were outperformed by products using only one or two benefits.

When you look at your business and consider the number of products you offer, the number of strategies you pursue, and the breadth of customers you try to serve – are you trying to serve too many choices or options?  Is too much choice resulting in indecision, stress or paralysis for your customers, employees and other stakeholders?  If so, it may be worth thinking about strategies to simplify in your journey towards better results for your company.

Do you know someone who could benefit from this article…

Article by Tim O’Connor

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