Why Having Fewer Options Leads to Better Service

Sheena Iyenger and Mark Lepper set up an experiment in 2000. They wanted to see how adding more choices affected consumer behavior.

Their experiment was conducted in an upscale grocery store called Draeger's Supermarket in Menlo Park, California. The store was known for having a large assortment of products such as 250 varieties of mustard.

Iyenger and Lepper experimented with an in-store sampling booth with two variations. One variation offered 6 different varieties of jam. The other offered 24.

The display with 24 varieties of jam attracted more customers with 60 percent of passers-by stopping at the display compared to only 40 percent of people stopping at the display with just 6 varieties.

Surprisingly, people who encountered the display with just 6 varieties of jam were five times more likely to make a purchase than people who encountered 24 varieties.

It turns out that offering fewer choices can be good for business. Here's how. 

Fewer Options = More Sales

A recent furniture shopping trip revealed how easy or complex a buying decision can be. 

My wife and I found two furniture stores that offered sofas we liked. One was Living Spaces. They really did service the right way and we ended up buying a sofa and a love seat from them. (A recent blog post described other ways that Living Spaces does service right.)

One of the biggest differentiators between the two stores was the number of options available.

Living Spaces had a much larger selection of sofas. However, their helpful salesperson narrowed it down to just a few choices once we described what we were looking for. Each choice had a simple one-page sales sheet that visually depicted the various size and configuration options. Making a choice was easy.

The other furniture store overwhelmed us with choices. One sofa that looked promising had a complex code book full of possible configurations. Even the salesperson struggled to decipher it all. There were six different options for the arms alone. It was too much.

Like the jam experiment, limiting options helps Living Spaces sell more.

 

Fewer Options = Lower Costs

Costco is famous for keeping its costs low and passing on those savings to its members. One of the ways it does this is by offering fewer options than its competitors.

The graph below shows the approximate number of individual items sold at Costo and its two major rivals, Sam's Club and BJ's.

Data Source: iStockAnalyst

Data Source: iStockAnalyst

Notice that Costco has 24 percent fewer items than Sam's and 46 percent fewer items than BJ's. Having fewer items allows Costco to rely on fewer employees to maintain inventory in it's stores. It also enables the chain to negotiate better deals from its vendors and offer lower prices to its customers.

Fewer choices haven't hurt Costco's service. The chain leads the American Customer Satisfaction Index for specialty retailers with an 84 percent rating.

 

Fewer Options = Better Operations

Last year, I wrote a post called Why McDonald's Customer Service Sucks in Three Charts

One of those charts depicted the proliferation of menu items at the chain. The menu had grown 365 percent since 1980.

Data Source:  Fortune

Data Source: Fortune

The staggering number of menu items causes a lot of operational problems as employees struggle to keep up with so many options. One study found that 12 percent of McDonald's drive-through orders contained an error.

Compare this to fast food champ In-N-Out. They're consistently rated extremely high in both customer service and food quality. One big difference? The In-N-Out menu contains just six items.

 

Solutions

One of my favorite customer service books is Uncommon Service. It describes the need for trade-offs. A business can only be really, really good at something if it's willing to be not so good at a few other things.

This book provides a great lesson in simplicity.

If you want to delight your customers, offer great prices, and make your operations run like a well-oiled machine, you need to sacrifice selection. 

Your customers, and your employees, will appreciate it in the long run.


The Right and Wrong Way to Serve Retail Customers

Retail is one of those places where sales and customer service intersect.

The primary function for most associates is helping the store sell product. They do that by providing customers with services, such as answering questions or helping them find a particular item.

How associates approach their dual role can make all the difference. There's definitely a right and a wrong way to do it.

My wife and I recently experienced both ends of the spectrum on a shopping trip. We wanted to buy two new couches for our living room. Here's what happened.

Image courtesy of  Urbane Apartments

Image courtesy of Urbane Apartments

The Approach

Bill approached us the wrong way. 

He saw us looking at a couch and immediately descended upon the scene like a price hawk. A price hawk assumes that everything is about price.

Bill's opening line was "We're having a great sale on that couch right now." This was a huge turnoff since (a) Bill hadn't even said hello and (b) we had many questions to answer before deciding on the right couch.

Brian at Living Spaces approached us the right way.

He walked up to us with a big smile and introduced himself. He then asked if he could help us find the right couch. It's a big store and we had lots of questions, so we gladly accepted his offer.

 

Questions

Bill made things complicated.

It wasn't all his fault. The brochure for the couch we were looking at read like a code book. You could select six different options for the arm, six more for the legs, and three for the pillows. There was an intricate chart where you cross-referenced the code numbers for various options to see the final dimensions and prices.

It seemed to take a bit of higher math just to answer our most basic question. Will this couch fit our needs? Bill literally had to spend several minutes running the numbers.

Every other question we asked turned into an unnecessary symposium on furniture design. We learned plenty of things we didn't care about. It was tough sifting through all the irrelevant details to learn what we did want to know. Questions like "Will it last?" shouldn't require a college course on furniture design.

Brian made things easy.

He clearly knew his product, but he also used a simple one-page sales sheet for each couch to answer our basic questions. He immediately addressed our key concerns:

  • Will it fit in our home?
  • How long will it last?
  • How's it made?

Brian's answers were clear and direct. He also asked us a lot of great questions to get a better understanding of our needs. This allowed him to narrow down their huge selection and only show us the couches that were most likely to be right for us.

 

The Zone of Hospitality

Bill was focused on the sale. He gave us his card and left us to serve another customer as soon as it became apparent that we weren't ready to buy.

Brian was incredible. He practiced the 10 and 5 rule without breaking stride. At 10 feet away, he'd smile or give other customers a non-verbal acknowledgement. He'd greet customers verbally when they got within 5 feet.

Brian still remained attentive to us the entire time. He stayed with us and answered our questions until it became apparent we needed some time to think about our options. He then politely excused himself but told us he'd be available if we needed anything else.

 

Conclusions

We haven't bought a couch just yet. 

There are a lot of decisions to be made such as color, style, and delivery time frame. We're getting closer. When we do decide to by a couch, we'll be sure to go find Brian at Living Spaces.