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MARK HEALY

Limit consumer choice and watch the money roll in Add to ...

Why are Apple products so popular? Why has Steam Whistle Brewing done so well in Ontario? There are a host of reasons for each brand, but one common thread they share is choice limitation. At any given time, there are only a few Apple products available in any given category, and Steam Whistle produces exactly one beer.

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Choice limitation, guided choice and curation are topics I have written about extensively in the past. Set in the context of over-communication by consumers leading to communication fatigue, which I recently wrote about, I believe these concepts take on even greater importance. Mental exhaustion makes consumer decision-making burdensome. Simple decisions are easier for consumers to make, so it’s likely they’ll make these types of decisions more often.

Sheena Iyengar, a professor at Columbia University, has written a book on consumer choice called The Art of Choosing. In it, she explores questions about choice and notes that “too much choice can overwhelm us, leading to unpleasant experiences.”

Consumer choice is a regular source of conversation with my clients. “Our customers want lots of choices, and the ability to customize,” is a myth I encounter often. But in most cases, I find that customers don’t want more options, they just want better ones. The trouble is, they may not know it.

Dr. Susan Broniarczyk, a marketing professor at The University of Texas at Austin, defines consumer hyperchoice as “an ever-increasing amount of buying which occurs amidst an ever-increasing amount of new products, brands and brand extensions, in the midst of an ever-increasing amount of other daily demands and an ever-decreasing amount of discretionary time.”

Dr. Broniarczyk and her colleagues’ research shows that consumer hyperchoice engenders a series of negative effects on the consumer. Confusion turns into frustration, which leads to either indecision (no purchase) or buyer’s remorse (post-purchase) and, ultimately, to fatigue.

The no-purchase effect, which is likely related to the argument put forth in Barry Schwartz’s book The Paradox of Choice, Why More is Less, is fascinating and scary if you are a marketer.

A study conducted by Prof. Iyengar (and Mark Lepper) about jam sales illustrates the point. In the study, two booths were set up to sell jam: at one booth, 24 flavours were for sale, while at the other, just six flavours were for sale. Thirty per cent of customers bought jam from the booth with just six flavours while a mere 3 per cent purchased jam from the booth with 24 flavours.

The science is also backed up by real-world examples. Take Walmart, a company that seems to offer lots of choice, but actually limits the number of brands and products for each category as compared with most grocery-store chains.

Choice limitation can be powerful in boosting customer experience and sales. Strengthening brand recognition will help consumers deal with hyperchoice, and help them overcome communication fatigue leading to decision-making fatigue.

Special to The Globe and Mail

Mark Healy, P.Eng, MBA, is a partner at Satov Consultants– a management consultancy with practice areas in corporate strategy, customer strategy and operations strategy. Mark’s focus areas inside the customer strategy practice include consumer insights, customer experience, innovation and go-to-market strategy. He is a regular speaker and media contributor on topics ranging from marketing to strategy, in telecom, retail and other sectors. Mark is known as much for his penchant for loud socks and a healthy NFL football obsession as he is for his commitment to Ivey and recent Ivey grads. He currently serves as chair of the Ivey Alumni Association board of directors. Mark lives with his wife Charlotte and their bulldog McDuff in Toronto.

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues.

Follow on Twitter: @healymark

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