The Trouble with Too Many Choices!

Posted on Posted in MMM
For the most part, choice is a good thing. Sellers appreciate the ability to offer a range of products while arriving guests appreciate their freedom to choose. But when we are talking about choice in the context of our own front gate and the products and packages offered there, choices must be limited. Offer too many choices and guests get overwhelmed, shut down, and default to the lowest price--your General Admission ticket. The concept of "keeping it simple" and providing a smaller number of package options at your front gate is a critical component of a strong revenue management strategy.
 
In 1995, Columbia Professor Sheena Iyengar conducted the famous Jam Study which propelled her to instant fame. The study was designed to test whether offering a larger number of products had an impact on the consumer's decision to buy. The results were surprising. Ten times more people chose to buy when offered a fewer number of choices.
 
Read the study below:

The Jam Study*

A grocery store in Menlo Park, California set up a special display to sell jam. At certain times, the display had six flavors to choose from. At other times, the display had 24 choices. Each person who came by the sample booth was given a $1 coupon to purchase. The displays were up for a total of 10 hours. Here are the results:
 
The display with 24 choices
Number of people who stopped by: 145
Number of people who bought from the display (based on coupon redemption): 4
Percentage redemption: 4%
 
The display with six choices
Number of people who stopped by: 104
Number of people who bought from the display (based on coupon redemption): 31
Percentage redemption: 31%
 
What appeared to customer as a typical promotion was actually a sociological experiment. The attendants handing out samples were research assistants of one Dr. Sheena Iyengar, the S.T. Lee Professor of Business at Columbia Business School. She was studying the effect that the number of purchase choices has on the propensity to actually make a purchase.
 
This experiment seemingly proves that customers presented with fewer choices are 10 times more likely to purchase compared with those who are shown many choices. It has been help up as a crucial example of choice overload, the idea that presenting customers with too many choices actually inhibits customer purchases. The idea of choice overload is counterintuitive; classical economic thought maintains that more choices are always better for the customer.
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* "Too Much Choice: The Jam Experiment." People-triggers. People-triggers, 03 Sept. 2013. Web. 26 Mar. 2017.
In our attractions world, there exists tremendous opportunity to create value within our own revenue strategy. 
 
Have a great week!
 
 

"It's not hard to make decisions when you know what your values are."
 
 

      -- Roy E. Disney