Over the last few weeks I’ve had the pleasure of speaking at a handful of conferences and in-house workshops, where I have been talking about some of the characteristics of leading companies, particularly those that are customer experience leaders.
One of the characteristics I have been talking about is Simplicity.
Now, it’s common when thinking about growing your business or developing your customer base to consider offering customers greater choice and more options.
However, whilst offering more choice may seem like a good idea it’s not always the best strategy.
This may seem counter-intuitive to many but often offering customers too much choice can cause choice paralysis and result in them choosing to not do anything or doing less than they might in we reduced the choices available to them.
Here’s some examples from a 2010 article in The Economist (The Tyranny of Choice) that illustrate this issue:
- In Nudge, Richard Thaler and Cass Sunstein quote a study of company pension plans that when a default investment option was included in the pension product choice, saving employees the task of going through picking or structuring their own portfolio then participation in the company schemes shot up from 9% to 34%.
- In 2009, Glidden, an American paint brand, reduced its palette of wall colours from 1,000 to 282 because they were seeing a change in “Americans’ priorities from ‘more is better’ to ‘less is more’”.
- Pascal Barbot, the chef at L’Astrance, a three-star Michelin restaurant in Paris offers no choice at all on his menu which is driven by what he has picked up from what was available in the market that day.
- According to Sheena Iyengar in The Art of Choosing, when Procter & Gamble trimmed its Head & Shoulders range of shampoos from 26 to 15, sales increased by 10%.
- A 2006 Bain study suggested that reducing complexity and narrowing choice can boost revenues by 5-40% and cut costs by 10-35%.
Moreover, the article goes on to report on a landmark experiment that was conducted in a supermarket in California, where shoppers were offered a range of jams. When presented with a range of 24 jams, more shoppers stopped at the display but only 3% went on to purchase a pot of jam. Meanwhile, when the display was changed to offer only 6 jams, whilst fewer shoppers stopped at the display 30% went on to buy a pot of jam.
So, it seems that whilst customers may say they want more choice and show more interest when presented with a large range to choose from they actual choose to buy less products when presented with a large range to choose from.
This is a fascinating and counter-intuitive finding and one that, I think, not only applies to the choices that we provide to our customers but can also be applied to how we run and organise our businesses.
“I would have written a shorter letter, but I did not have the time.” – Blaise Pascal, the French mathematician, physicist and philosopher.
Since 2009, Siegel + Gale, the international branding agency, has been tracking the impact of ‘simplicity’ when it comes to brands. They have found that in an increasingly complex world, simplicity stands out when it comes to customer choice, service and experience. They have also found out that brands that focus on delivering simple service and experience deliver better results:
- 64 percent of consumers are willing to pay more for simpler experiences.
- 61 percent of consumers are more likely to recommend a brand because it’s simple.
- Brands that don’t provide simple experiences are leaving an estimated share of $86 billion on the table.
- A stock portfolio of the simplest global brands outperforms the major indexes by 330 percent.
- 62 percent of employees at simple companies are brand champions—versus only 20 percent of employees at complex companies.
Therefore, it seems that the reduction of choice and the quest for simplicity has value for not just customers but employees too.
It may not be easy to do. But, it’s clear that simpler service or experience pays.
This is a reprise and edit of an article from the archives and the original was published here in 2011.
Thanks to Pixabay for the image.