How Paradox of Choice Affects Your Sales

Have you ever wondered how Apple can rack up significant sales even when then they provide only 1-2 choices for each product category? Does it not run counter to conventional wisdom that more choice means more sales? In a landmark 2004 book – “The Paradox of Choice: Why More is Less“, author Barry Schwartz argues that reducing choices reduces anxiety among the buyers leading to better sales.

Why more choices affect sales?

    1. When people are presented with more choices, they essentially go for the random pick. That might not suit their needs or might not be the high value product you intended to sell. In either case, you, as the marketer, lose.

  1. More choices serve to clutter your web pages and causing your buyers to get distracted. When people are distracted they could abandon their virtual shopping carts. This is why successful landing pages, focus on a single product and a single call to action.
  2. Giving more choices dilutes your sales pitch. Your salesmen now need to know about more products and field more variety of questions.
  3. Giving more choices lead to more confusion in the customer support department. You cannot train your front-line support guys about all your products if you have a huge number of them.
  4. Product design suffers as your designers have to create a large number of products, diluting their attention. Keeping the number categories low gives them more time and energy to focus on the product’s design and usability aspects.
  5. You don’t get economies of scale as each of your product lines are smaller than what you could have if you had fewer choices.

How do you avoid the paradox of choice?

  1. Do a lot of market research and make sure the small number of your choices address the needs of over 80% or more of your market. You might not always be able to satisfy everybody.
  2. Keep it simple. Whether it is Apple’s products or Google’s search page, the simplicity of the design won over their competitors with more “features”. Keep the choices simple and logical.
  3. Ideally limit the choices to 3-4 (for instance, premium, standard, budget) and look to maximize the sales with the middle option. The premium is to convince the users that the standard option they are getting is a bargain and the budget option is to convince the users that they are getting sufficient features with the standard one.
  4. Work on your marketing messaging to convey why the choices you picked for production kept the customer’s interests in mind.