When Does Offering Prospects More Make Them Want Less?

Behavioral scientist Sheena Iyengar and several of her colleagues have made the case that less is more.

They analyzed company sponsored retirement programs for nearly eight hundred thousand workers, looking at how the participation rates varied versus how many fund choices the organization offered.

It would seem logical that the more funds offered, the more people would want to join.

But that was certainly not the case.

The researchers found that the more choices that were offered, the less likely the employees were to enroll in the program at all.  For every ten additional funds a company offered to its employees, the participation rate dropped almost 2 percent.  To give just one specific comparison, they found that when only two funds were offered, the rate of participation was roughly seventy percent.  But when fifty-nine funds were offered, the participation rate dropped to about 60 percent.

And this experiment doesn’t just hold true for retirement plans.

“Iyengar and fellow social scientist Mark Lepper also examined whether the damaging effect of offering too much occurred in other domains, such as food products.  They set up a display at an upscale supermarket in which passerby could sample a variety of jams that were all made by a single manufacturer.  Throughout the course of the study, the researchers varied the number of flavors of the jam offered, so that either six or twenty-four flavors were featured at the display at any given time.  The results demonstrated a clear and astonishing difference between the two conditions:  Only three percent of those who approached the extensive choice display actually purchased any jam.  Contrast that with the 30 percent who bought jam when they approached the limited choice display.”

What could possibly account for this tenfold increase in sales?

When so many choices are made available, consumers often find the decision-making process frustrating, perhaps due to the burden of having to differentiate so many options from one another in an attempt to make the best decision.  This may result in disengagement from the task at hand, leading to an overall reduction in motivation and interest in the product as a whole.  The same logic holds for the retirement plans.

There are some rare exceptions to this rule.  But unfortunately, there are few companies that find themselves in the position of having so many prospective buyers literally salivating at the opportunity to choose from their wide selection of services and products.

By offering a large number of products to potential buyers, you could be inadvertently harming sales.  If this is the case for you, don’t overwhelm your prospects. Find out their pain and give them one option.  Maybe two options at the most.

Related Articles:

Prospecting Weapon #3: “Takeaway Selling”

“Listening” – The One Crucial Sales Skill that Every Agent Can Improve

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