LESS IS BETTER, SOMETIMESsyginteractive.com/site/wp-content/uploads/2014/08/less_is_better.pdf · LESS IS BETTER, SOMETIMES Understanding The Evolving Customer 1. RESEARCH

LESS IS BETTER, SOMETIMESUnderstanding The Evolving Customer

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RESEARCH

• “If there’s too much variety and the choices feel overwhelming, people delay their purchase.”- Barbara E. Kahn, Marketing Professor, Wharton School of Business

• “The expansion of choice has become an explosion of choice, and while there is something beautiful and immensely satisfying about having all of this variety at our fingertips, we also find ourselves beset by it.”- Sheena Iyengar, Professor of Business, Columbia University

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VISUAL VS VERBAL

Visual:

Non-linear processingQuick scanCan process lots of informationInformation can be overlookedPoorer recall of large set (20 or more)

Verbal:

Linear processingSlower absorptionLess information processedInformation less likely to be overlookedBetter recall of large set (20 or more)

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VISUAL VS VERBAL

• Verbal descriptions require more effort to process

• However verbal descriptions provide more information, so consumers have a greater degree of confidence to make a decision

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CHOICE MODEL

• Is the number of ideal choices based on product category?

• How expensive?

• How often?

• How involving?

• Purchase Parameters:- Value- Frequency - Involvement

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CHOICE INDEX

• Current trend can be mapped asFrequency * Involvement / Value

Frequency Involvement Value Choice Trend F * I / VBooks and Music 9 7 1 Very Large 63.0Food 10 5 1 Very Large 50.0Accessories 8 5 1 Large 40.0Cosmetic Consumables 9 6 3 Large 18.0Clothing 8 8 4 Large 16.0Footwear 8 8 4 Large 16.0Jewellery / Watches 6 9 7 Large 7.7Personal Electronics 4 8 5 Large 6.4Travel 6 8 8 Medium 6.0Cars 1 10 10 Medium 1.0Home Appliances 2 3 7 Medium 0.9

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THE JAM EXPERIMENT

•Option 1: 24 choices60% sampled, 2% purchased.

•Option 2: 6 choices40% sampled, 12% purchased!

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CHOICE OVERLOAD

• Each comparison took time and effort.

•When people are confronted with several options, they often pick none of them and move on to something else.

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SATISFACTION MODEL

• In the jam experiment, satisfaction levels with the act of buying were higher with Option 2. The difference in the level of satisfaction tasting the top choice vs the second choice was larger with 6 jams, compared to the small differential in satisfaction between first and second choice among 24 jams.

• Added to this was the potential regret of not buying the second best one (“I should have bought THAT one”) (-)

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SATISFACTION MODEL

• Rethink the Frequency-Involvement-Value Model

• The brain acts if there is a discernible reward of satisfaction, or a reduction in dissatisfaction.

• Choice has a reduced role in adding to satisfaction levels.

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SATISFACTION MODEL

• The upside of having choice has reduced.

• The downside of risking regret still lingers.

• Regret is still a key driver in decision making because we seek a superlative experience with every action.

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SATISFACTION MODEL

• According to this model, purchase decisions are made when there is a sufficient differential of satisfaction level between selecting the final choice and the also-ran.

• So retailers should aim to make the customer as happy as they can possibly be.

• Sometimes this can be achieved by offering fewer choices.

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SATISFACTION MODEL

• Reduce choice, reduce potential regret, increase satisfaction and make the sale! Ethical and profitable!

•Not to mention simpler inventory.

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EXAMPLES

• Amazon - upto 6 options in related products

• Apple: total of 20 products!

• Baskin Robbin: 31 flavours, but more of a branding and experiential proposition (‘Kid in a candy store’). Like many other products, their hero flavours sell far more than the rest.

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REFERENCES

• ‘The Visual Preference Heuristic’ - Journal Of Consumer ResearchBarbara Kahn, Wharton School Of BusinessClaudia Townsend, University Of Miamihttp://knowledge.wharton.upenn.edu/article/online-shopping-choices-less-sometimes-better/

• ‘The Art Of Choosing’ - Sheena Iyengar, Columbia Universityhttp://sheenaiyengar.com/the-art-of-choosing/excerpt/

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REFERENCES

• ‘The Tell Tale Brain’ by V Ramachandran

• ‘Why Choose This Book’ by Read Montague

• ‘The Happiness Project’ by Gretchen Rubin

• Get To Know Your Brain - Paul Nussbaumhttp://www.paulnussbaum.com/gettoknow.html

• SocialTriggers.com - Derek Halpernhttp://socialtriggers.com/get-online-sales/

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THANK YOU

SANJEEV BINAYKIASYG INTERACTIVE

[email protected]

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