Many people believe that if a little is good, more is better. Instead of focusing on what their market wants, they offer an extensive array of options thinking that they will let the market decide. In the world of online sales, people are in a hurry and they will not wade through too many choices.
This approach of letting people decide with their wallets may seem like a good move. The downside is that most people when faced with too many options will shut down and make no decision at all. The result is that a wider selection will result in lower total sales volume.
The psychology of this is that people will compare each alternative in an attempt to pick the best choice. With too many choices people will become overwhelmed and frustrated. They will put off making the decision thinking that they will come back when they are less pressed for time. Usually they don’t come back, so the sale is lost.
How do people typically make a decision? This is usually a simple three step process.
- What do I need?
- What are my options?
- Compare the available options.
The decision difficulty increases exponentially as the number of options increases. This is illustrated in the now famous jam study.
In the 1990’s Dr. Sheena Iyengar, a business professor at Columbia University did a study at Draeger’s, an upscale supermarket. They offered taste samples of a British jam. They compared assortment sizes of 6 vs. 24. When faced with 6 possible jams, 30% of the shoppers purchased the jam. When faced with 24 different jams, only 3% of the people made a purchase.
This type of study has been repeated across many products and services, all with similar results. Studies include 401(k) enrollments, Medicare prescription drug options.
Online Sales Decisions
How many choices should you offer? It really does matter on what you are selling. The key is to simplify the decision making process.
3 Option Rule: The human mind can easily comprehend three variations and keep them straight. People can easily make a choice when given three options. On your website, keep it as easy as 1-2-3. Always try to limit your visitor’s decisions to a maximum of three.
A variation of this is a 3 x 3 decision tree where you offer 3 initial choices followed by another choice of 3 after the initial choice is made.
Your online sales may not fit into the 3 option rule, instead look at simplifying, grouping, formatting and filtering so the decision process is visually simplified.