Dear Champ,
I’m thinking about redesigning my menus for customers, but wonder if there’s something I’m missing when it comes to capturing their attention and getting them to choose the higher priced packages. Help?!
How can we use signage to make people spend more money? A question we constantly work to answer in the Marketing world. You’ve come to the right place, my friend.
Let’s take a look at the concept of choice.
A supermarket averages more than 42,000 SKUs. That’s a lot of product to try to navigate through. Obviously, you don’t have 42,000 offerings for your wash … right? But, you do have a variety of options for customers to choose from. The key is to make the choice simple.
If you have 15 minutes to spare, check out Sheena Iyengar’s TED talk “How to Make Choosing Easier.” The professor of business in the management division at Columbia Business School lays out the problem of choice overload in detail.
But, you wrote to me, so you must want a quick answer. Basically, Iyengar conducted a survey at a grocery store in Palo Alto, which carried 348 varieties of jam.
She set up a tasting booth outside the store. When the booth had six varieties of jam, patrons were 33 percent less likely to stop and sample the products than if 24 varieties were displayed. But the patrons who stopped at the six-variety booth were six times more likely to buy jam than the patrons who stopped at the 24-variety booth.
More choices might capture consumers’ attention, but sheer variety is actually harmful in converting them to customers.
So what should you do about your menu?
1) Cut
When Proctor & Gamble cut their Head & Shoulders line from 26 products to 15, the organization saw a 10 percent increase in sales. Less really is more.
2) Make things concrete
If consumers are able to connect with a product on a visceral level, they will be more likely to buy it. Consider that consumers spend 15 to 30 percent more money when using a credit or debit card rather than cash because of this lack of concreteness — swiping a piece of plastic is a different experience than handing the cashier a $20 bill.
3) Categorize
Think back to that grocery store with its 42,000 products. Imagine if the 2 percent milk was next to shampoo, but whole milk and heavy cream were stored next to meat.
It would be chaos.
Separating products into discrete categories prevents choice overload by slimming down the number of products consumers have to compare to each other. It’s also worthwhile to note the total number of products we have to choose from matters less than the number of product categories with which we’re presented.
4) Condition for complexity
A German car company that allows consumers to completely customize their own cars found that presenting choices with fewer options first and slowly building up to more complex decisions — such as picking from 56 different exterior car colors — kept consumers more engaged.