When you start a new job, you are inundated by paperwork and decisions. Then you are asked to make big decisions about 401k participation. Research found that the more choices people were given, the participation rate went down.
When 2 funds were offered, the rate of participation was 76% but when 9 funds were offered it was 60%.
In supermarkets, a jam display was set up. One offered 6 jams and 1 offered 24. When 24 offered, only 3% bought. But, 30% bought on the limited choice display. People can tend to get confused by the differentiation, and get frustrated.
Many times, though, potential customers don’t really know what they want. So, offering a lot of varieties of your products can confuse. Though there has to be clear differentiation.
For example, P&G reduced the # of versions of Head and Shoulders from 26 to 15 – sales went up 10%.
Might want to ask yourself: Where we have customers who may be unclear of their requirements could the number of products we offer be leading them to seek other and fewer options elsewhere.
When selling mortgages, I used to always offer 3 options. No more, no less. That way it’s still simple, but the customer made the choice. Not being “sold.” Did this even if 2 didn’t make sense.