As a marketing product manager, one of the many challenges we are faced with on a regular basis is balancing the power of choice. What’s better, displaying all your options to your customers, or limiting their options in the hopes of making it easier for them to choose the right product? Whether you’re looking to stock/showcase product in your retail store or e-commerce site, the cost of doing so can be quite high. Let’s explore the power of choice from two different perspectives; the customer and the retailer/e-commerce site.
Can Too Many Options Be A Bad Thing?
Generally speaking customers like to be in the driver seat and want the power to choose the product/service that best suits their needs. On one hand you want to provide a solution to everyone, but on the other the cost of doing so may be overwhelming. As a result how do you be everything to everyone? Well you don’t!
It’s important to remember you can’t be everything to everyone 100% of the time, but you can be everything to your customers the majority of the time. You want to ensure you have a full product offering that will not overwhelm the customer.
Below are a few tips on how you can provide a full offering to your customers while not paralyzing them with too many options (which will reduce the chance of a transaction).
How To Find The Happy Medium: Five Tips
1) Understand Your Target Market: I know this is an obvious one, but you’d be surprised how there are companies that still don’t know who their customers are. Also over time your customers evolve, your company may grow into various industries; as a result you need to keep testing the integrity of your data. Segmenting your customers and creating personas for each segment will help you better understand what they need, and ultimately what they expect from you.
2) Review Industry Trends: With the help of the internet it’s easy to find your competitors along with their product offering, but unfortunately that’s only one element when reviewing your industry. When looking at the competition it’s important to not only know where they are today, but where they are going tomorrow… Are you partnered with the wrong suppliers? Are you reactive or proactive? These are some of the many questions you should be asking yourself.
3) Inventory Cost Analysis: Yes you will be pulling your hair on this one, but you’ll be happy to know you’re not alone. How much does it really cost to stock your products? In your industry do goods have a shelf life? Are models/styles changing every few months? If so what’s the cost of liquidating these products? What’s the opportunity cost of carrying/promoting a different product line?
4) Logistics & Lead Times: The last thing you want is to have a wide array of choices with a limited amount of SKUs in stock. Now this also depends on the industry you’re competing in and the type of products you sell. For example, in the industrial distribution world it’s very difficult to have everything in stock, as some of the items can be quite large and costly to stock and ship. To reduce logistical costs and lead times, industrial distributors tend to drop ship from local manufacturers who always have the stock on hand. Your supplier’s stock becomes our stock…
5) Website Layout: How many clicks does it take to find a solution on your website? If not already done, it’s important to structure your website in a way that helps guide the customer. The effective use of filtering options, creation of info guides and so forth can help make an abundance of options feel very simple to navigate.
Now it’s your turn! Let me know how you, as a consumer or organization, handle the power of choice. Is less really more?