Every consumer wants customized experiences and products while shopping, but when faced with 700 options the choosing becomes difficult. In a recent Ted Talk, speaker Sheena Iyengar, explained, after her experimental findings, how businesses can improve customers’ experience when making choices.
Do you know how many choices you make in a day? In a week? In a month? In a study of over 2,000 Americans, on average consumers make over 70 choices in one typical day. Wow!
In the corporate world, scientists have studied CEOs by following them around, documenting their various tasks and noting how much time they spent making decisions. In turns out, the average CEO engages in about 139 tasks a week, with each task made up of many sub choices. 50% of CEO decisions were made in 9 minutes or less and only about 12% of the decisions took an hour more of their time.
Think about your own choices in your pharmacy business and personal life. Do you know how many choices are in your 9 minutes or less category or your 1 hour or more category? How well are you managing these choices?
In an average grocery store, there are over 70 olive oil choices. 70! Choice overload. We all experience it. Sheena conducted her own study in a grocery store to discover the customer buying patterns depending on the more or less choices offered. She proposed these two questions for customers buying Jam in a grocery store:
1. Would a customer stop for 6 flavors or 24 flavors of Jam?
2. In which case (6 or 24 flavors) are people more likely to make a purchase?
Sheena found that about 60% of people stopped for the 24 flavors over the 6 flavors of jam. But when it came to actually buying, the experiment showed the opposite. Only 3% of the people who stopped to see the 24 flavors bought, but over 30% of the people who stopped for the 6 kinds of flavors bought.
Choice overload affects us even in consequential decisions. We choose not to choose even when it is in favor of our best interest. Why? Because of 3 negative consequences:
- We delay the choice and procrastinate
- Make worse choices – financial, medical
- More likely to choose things that make us less satisfied
Let’s apply these studies and findings to your pharmacy business. The following four techniques can help your customers with choosing and purchasing in the store.
Less is more. If you are willing to cut there will be an increase in sales. By lowering the number of products, costs will lower and there will be an improvement in the choosing experience. For example, when P&G went from 26 kinds of Head and Shoulders products to 15, they saved money and increased sales by 10%.
The average grocery store offers over 45,000 products, the typical walmart offers 100,000 products and the 9th largest retailer, Aldi, offers only 1400 products.
In order for people to understand the difference between the choices, they have to understand the consequences associated with each choice. And these consequences must be felt in a concrete way. For example, the average person spends up to 15% more when they use a credit card over cash because the money does not feel as real.
We can handle more categories than we can choices. Think about walking down a magazine aisle. If you are given 600 magazines in 10 categories or 400 magazines in 20 categories which will make you buy? The less intimidating layout. The categories help differentiate the magazines. Customers would believe there are more choices when given 400 magazines in 20 categories.
4. Condition for Complexity
By starting off easy and gradually increasing the complexity of the buying decision, the customer learns how to choose. For example, when buying a car there are manydifferent decisions and choices to be made. By varying the choices in which they appear, you can change the buying outcome to be more favorable. Ordering high choices to low choices, consumers can get very overwhelmed and settle with a default or not buy at all. Even though the information is the same, if ordered from low to high, consumers are more likely to make all choices and purchase.
These techniques are designed to help you manage your personal choices and help your customers manage theirs. In order to make choosing easier for you and your customers, the key is to be choosy about choosing.
Based on the Ted Talk, How to Make Choosing Easier by Sheena Iyeganr.