Limiting the Consumer’s Choices

Social psychologist and Columbia University Business School professor, Dr. Sheena Iyengar, is an expert in choice. By that, I mean she has dedicated her life to understanding the patterns of human decision-making and revealing its contradictions. After leading a 15-year study on the subject, she authored a book on the topic titled, “The Art of Choosing.” In her book, she talks about how psychological, biological, and cultural behaviors steer us in making decisions of choice. “We’re born with the desire, but we don’t really know how to choose,” wrote Dr. Iyengar. From her numerous studies, Dr. Iyengar concluded that when given too many option, we are ten times more likely to take action when choice is limited. Anyone who’s ever been to a convenient store for a candy bar will tell you that! I have left stores because the assortment of items was so large, I didn’t know which selection to make.

Have you every been out to a restaurant, looked at the menu, been so confused by all the offerings, and responded, “I’ll just have…?” To most people, that statement would indicate that you made a choice you were happy with. However, the word “just” in this case, subconsciously indicates that:

1. You are not 100% happy with your selection, and/or;

2. You don’t care about your selection.

Now let’s bring this subject into your business. Most of you claim to be Managed Service Providers; and as such, you probably have different levels of “packages” you provide to potential clients. After reviewing them all, do you find your clients stating, “I will just call you when we have problem…?” This could be due to a few things. One of reasons they chose not to enter into an agreement with you could simply be price. Another reason could be the potential Managed Service client is confused by choices you are offering—and not willing to make a mistake, decides not to purchase at all. In her book, Dr. Iyengar described the magic number—seven—at which more turns into less. This is based on a previous study that showed that our senses can easily distinguish five to nine objects of perception. Now, I am not recommending that your have five to seven different offering for potential clients to choose from. I am saying that if you are offering a lot of different services, combine them into packages that don’t exceed five to nine different offerings. I found that the magic number of Managed Services packages should be around two to four offers. This gives an adequate number to choose from—while not overloading the potential client.

This information should not only be considered for Managed Services offerings, but in everything you sell—from hardware and software. If you business still sell computers to it’s clientele, offer two to four different types. Then categorize them accordingly: Home use, business use, gamers, etc. It is easy to argue that limiting the choices of your clients will cause low sales numbers. However, overloading them with choices will cause the same effect. Finding a balance of offerings will still allow you to suggestion choices while keeping you clients corralled just enough so they don’t feel overburden in making a decision.

Michael D. Alligood
Partner Sales & Support, ExchangeDefender & Shockey Monkey
michael@ownwebnow.com
(877) 546-0316 x707