Could Less Products Mean More Profits?

I just read about an interesting experiment where less products produced more sales. It was in Dan Pink’s great book, To Sell is Human.

The experiment was done by Sheena Iyengar (Columbia University) and Mark Leppar (Stanford) . They first set up a booth selling 24 different types of jam and tracked how many people stopped to consider a purchase and how many actually purchased. This would allow them to calculate the conversion ratio from opportunities to actual sales as a percentage. Three out of every hundred or 3% converted.

Then they reduced the offering to six types of jam. While the total opportunities did go down, the conversion ratio on the opportunities to sales went from 3% to 30%!

Wow! This is very interesting.

So how many different products and services does your business offer? Is it too much?

The idea of reducing the number of choices has additional benefits:

–          It would simplify product knowledge training, inventory requirements and sales and marketing support materials.

Imagine a restaurant that only offered six items on the menu. Think how much easier it would be inventory, prepare and serve only six different plates?

If you are a manufacturer, surely making only 6 items would be far more efficient than making 26 different products?

It seems your customers still need choice, but too much could just be confusing enough to stall the purchase decision.

It is worthwhile exploring this possibility for your business. We would be glad to assist you if you are interested. Meanwhile, we will be reviewing our offering of products and services to practice what we preach!



Author: Paul Foster
Paul's life’s purpose is to bring more cash, freedom and happiness to independent business owners. Paul wants to learn about your toughest business challenges and frustrations so he can help you tackle them.

1 Comment

  • Paulette Shepley

    Training the next generation to keep the business alive and well, for me is a little frustrating. I know our son is looking forward to the next chapter in his life. Even though our son brings strengths to a particular part of the business. I do see he is trying to master many things at once and I see the frustration is getting the better of him. Our son is a humble workhorse and we are hoping he learns to appreciate the staff and our existing culture, but bring value and fresh ideas for many years of success.

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