Persuasive Advertising - J. Scott Armstrong [26]
Subjects were asked about their intentions to purchase microwave ovens. Of those subjects offered a single oven, 53 percent said they would purchase it. Of those given a choice of five ovens of different sizes, the intentions to purchase increased to 73 percent (Gourville and Soman 2005).
Because people like having choices, retailers that provide many choices attract more customers. Eight lab experiments support this conclusion (Scheibehenne, Greifeneder, and Todd 2009).
1.3.3. When there are many substantive multi-dimensional options, organize them and provide guidance
When there are many multi-dimensional choices with clear benefits for customers, the key is to guide customers in a way that makes the task look simple—and be simple.
From the sellers’ viewpoint, it is nearly always cheaper to restrict the number of options. This saves with respect to manufacturing, inventory, and marketing costs. From the customers’ viewpoint, it is good to restrict options to those that differ in substantive ways. For example, I have shopped for shampoos for many years and have never graduated beyond the uninformed status. Perhaps it is due to the bewildering array of superficial features. P&G is alleged to have recognized this issue, and reduced its Head & Shoulders shampoo choices from 26 to 15; in doing so, it increased sales by 10 percent. In addition, I expect that P&G reduced costs.
Informed customers tend to cope well when faced with multi-dimensional choices. For example, wine connoisseurs enjoy shops that have many varieties. However, this can be confusing for uninformed (e.g., new) customers. As a result, multi-dimensional choices lead uninformed customers to become uncertain and they might defer making a selection. In many cases, of course, it is rational for customers to defer a choice until they can obtain more information, especially for high-involvement choices.
To guide customers, put the choices into informative categories, each of which contains up to, say, ten options. This will be appreciated especially by uninformed customers. It simplifies the problem, as they need only to chose a category and, within that, to make a choice. By using informative categories, you will be helping to educate customers and to move them into the informed category. This approach can be used in print, point-of-purchase, and Internet advertising.
It is difficult to say what is the optimum number of options per category. Perhaps Miller’s (1956) speculation about the magic number seven, plus or minus two, is relevant here (also see Baddeley 1994). He presented findings from various areas of research related to people’s ability to remember items—along with such associations as the seven wonders of the world, seven days of the week, seven primary colors, seven notes of the musical scale, and so on. However, the optimum number of choices would vary according to individual capabilities, ability to purchase, time allowed for the decision, expertise, and involvement.
Another way to guide the consumer is to include choices that are easy to compare and to show that one of the choices clearly dominates. The consumer is then more likely to select the choice that is easy to compare with an alternative. This is sometimes done by inserting a decoy. In other words, to guide people in making a difficult choice between brands A and B, insert a choice, C, that is similar to but obviously inferior to choice A. After seeing the superiority of A to C, people will focus on A rather than B.
Still another way is to organize the information about the features. Most people make choices by focusing on a single variable. For example, when deciding which political candidate to vote for, people may focus on a candidate’s position on taxes. Advertisers can focus on a single feature when it is the most important consideration for a large part of the market. They could still provide information on other features, of course, but give them less attention. This strategy is most effective when the de-emphasized features are less important for the customers