Giving your customers more choice is a good thing. Or is it?

When thinking about growing your business or developing your customer base, one of the most common strategies that companies employ in order to drive growth or increase customer spend is to offer their customers greater choice and more options.

I was thinking about that over Christmas and if it was always a good thing or not when, coincidentally, I came across The Tyranny of Choice, a feature article in the bumper Christmas and New Year edition of The Economist, about the growth of choices that we face in all aspects of our lives.

The article starts by saying that choice and having the ability to choose is and has been a good thing over the last century. However, it does start to question whether too much choice is now leading to indecision, confusion and under-performance. Here’s a few out-takes from the article along those lines:

The more that options multiply, the more important brands become. Today, when paralysed by bewildering choice, a consumer will often turn to a brand that is cleverly marketed to appear to be one that others trust.

Tropicana’s extra fruit-juice varieties boosted sales by 23% in Britain in 2009. But now the company puts colour-coded bottletops on sub-categories of juice to help customers “navigate what can be a difficult range”, says Patrick Kalotis, its marketing director in Britain.

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%.

So, what does all this mean?

Well, here’s my two-penneth.

I think offering more choice can help you grow but only up to a point.

Beyond that offering more choice can hinder rather than help your your customers and may start to dilute your brand.

However, finding that balance is tricky.

If you want my advice, I would suggest that you err on the side of “less is more” on the basis that simpler things are much easier to explain, pitch, share, talk about and buy.

What do you think?

Thanks to frankh for the image.