Choices and Online Businesses

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Every day you and your customers make choices. Every day we are faced with choosing the simple things and the complex.

People love choice. If you were to ask someone if they’d prefer to choose out of a selection of 2 or 20, generally they’d go with the list of 20.

However much people love choice, human beings simply aren’t cut out to choose things. We always want to pick the best option, and the more options there are the harder it becomes for us to decide which of the options in front of us is the right one.

This can cause distress and potentially end up with a person simply not choosing.

As a business owner I’m sure you can see why that’s problematic!

Back in 2000 there was a study that has been cited time and again that seems to prove that people are bad at making choices and how that can affect sales.

The study by Sheena S. Iyengar and Mark R. Lepper used jam (jelly) to make its point.

They set up a stall and offered either a selection of six jams or twenty four.

When the 24 was offered they noted that there was an increase in the number of people stopping to sample the jams, 60% in fact stopped to grab some freebies.

In comparison, with only 6 on show the number of people who stopped to taste was only 40%

A marked difference for sure.

However, the number of people sampling wasn’t their only metric, they also found out how many people purchased.

For the 24 jam selection a mere 3% ended up buying jams, but when the lowly 6 jams were offered 30% of people handed over their cash.

If you base these stats on 100 people for ease then the conversion rate for the 24 jam selection was 1.8% compared to 12% for the 6 jam selection.

Psychological issues

Too much choice can cause a couple of psychological affects to occur:

  1. Analysis paralysis
  2. Buyer’s remorse
  3. Decision fatigue

Analysis paralysis is where someone has so many choices in front of them they have no idea where to even start let alone what to buy. As a result they simply stop. Perhaps they’ll head off to do some more research or perhaps they’ll give up on the idea completely. What they won’t be doing is buy something from you.

Buyer’s remorse is partly where someone gets anxiety because they don’t know which product is the best one for them and they want to buy the best one. This can lead to impulse buying, subsequent regret and refunding the item. Or it can lead to no sales.

Decision fatigue might not be something you’ve heard of but I bet you’ve felt it. As we go through our day making decision after decision it wears us out and our decisions later on in the day become harder to make and often irrational.

How does this affect you?

There are several situations in which this study of choice might affect you:

  • If you sell products
  • If you have multiple pricing options
  • If you use email marketing
  • If you have Call to Actions
  • If you use social sharing

As you can see, it’s not just e-commerce site owners that can benefit here; if you have an online business of any form, reviewing what choices you offer your visitors could help increase your conversion rate regardless of what you’re converting.

E-Commerce Sales

You might be thinking, or worrying, that what I’m suggesting here is for you to slash the number of products you sell.

There’s actually a few ways to help your customers avoid being blinded by choice.

Sell Less

Yes, this is definitely an option, but one that should be treated with care and research. The ideal products for the chopping block are products that already underperform in sales and products that might be virtually identical to others in your product listings.

These are easy to remove from a business standpoint and can reduce the number of options a buyer has, reducing things like decision fatigue.

According to Barry Schwartz, there is even real world evidence of this actually improving sales.

Categorize more

If you show your customers everything you sell in one big list, you’re likely to spark all the negative psychological phenomenon in one go.

Clear and ordered categorization can reduce the perceived choices dramatically, allowing visitors to focus on what they are after.

Taking this one step further, if your products have individual choices (clothing is a perfect example), don’t offer these straight away. Perhaps move them to later in the sales funnel or keep them as limited as possible.

Email marketing & CTAs

Any decent marketer will tell you that in emails and in call to actions you should just focus on one thing that you want the person to take action on.

Adding multiple choices distracts the user from the intended purpose and can reduce your metrics dramatically.

With pone thing on offer it reduces the options to yes or no. With more you have the problem of yes or no for 2, 3 or more things – that’s not how to get people to take action, and at their core that’s all email marketing and call to actions are about.

Social sharing

Visual Website Optimizer did a study a while back that suggests that by removing social share buttons, sales increase.

The basic theory behind this is social proof. People want confirmation from others that the product or service is good.

If you can provide that social proof then all is good and well but if you can’t (lawn mowers don’t tend to get shared much on Facebook) then you are likely better off removing the social metrics and thereby removing the lack of social proof.

As well as that, you could also reduce the number of social networks that you offer users to use to share your content. It follows the same principles in that too many options distract users. Instead keep it to the networks you actively use, either removing the rest of relegating them to a “more” button.

SasS Pricing

We’ve all bought software and services that offer various plans, but have you noticed the difference between these plans?

Some companies offer a variety of plans with varying numbers of features available. And some companies offer a mere 2 or 3 plans with clearly defined differences.

Reducing and collating plans is often the best option for SaaS style companies. Make sure that each plan is distinctly different so there can be no hesitation from the potential customer.

This might not be for you

There are plenty of blog posts and infographics out there extolling the virtues of reducing choices and products, and offer arbitrary stats on why you should believe them.

Yes there are potential benefits for companies to reduce choice, I would especially recommend using reduced choices in email marketing and call to actions.

That being said, it might not work for every business and every audience.

As such your best bet is to test, test again and test some more. See what your audience appreciates and what they don’t. Maybe you’ll increase sales by removing choices, maybe you’ll lose money, but until you test you’ll never know.

Just don’t believe the people that say you must reduce choice.

You’ll hear stories of people facing the choice of hundreds of flavors of ice cream and walking away without buying, but that’s likely rarer than you think because who goes into an ice cream shop and comes out without an ice cream? Not me, that’s for sure!

The Bottom Line

The psychological aspects of choice are clearly real, but how they affect your business is not as clearly defined.

Use the above ideas and test to see if your business can benefit from fewer choices or not.

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