Increase sales with variety

Author: Klaus Pilsl

Every product manufacturer knows this: In order to sell more, the product to be sold should be able to do more. This makes it relevant to a larger group of customers, and sales increase. Right? Hmmm, well maybe - but maybe not?

In this article, we will explore this question and also what needs to be done to actually increase sales. We clarify whether it is really the better way to increase variance from a sales increase perspective, which sales forces are at work, and how we can harness them so that sales actually increase - and in the best case, significantly.

The Jam Experiment

In 2000, a study was conducted by Sheena S. Iyengar and Mark R. Lepper, which is now known as "The Jam Study". This study conducted three experiments to verify each other's results. For the sake of simplicity, however, I'll pick out just one now: A table was set up in a supermarket. Depending on when the visitors entered the store, they were offered either 6 or 24 types of jam on the table. The visitors received a discount voucher at the main entrance, which they could redeem for these jam products. In addition, the visitors were allowed to taste the jam varieties without obligation - and as much as they wanted.

The results

To make a long story short. The result was surprising.
When 24 products were offered, 60% of the visitors (145 people) showed interest and tried the jam. Among the visitors who were offered only 6 products, only 40% (104 people) stopped for a taste. One could think that with 24 products offered, people would have tried significantly more varieties. However, this turned out to be wrong. In both cases, the test persons only tasted 1-2 products.

And finally, from the group that saw 24 products, only 4 people bought something (3%). However, from the group that was offered only 6 types of jam, 31 people bought (30%). And that was surprising.

Findings:

So the assortment was only a quarter as big, but they made about 8 times as much sales with it.
At the same time, the purchase completion rate increased by a factor of 10, which means that the sales force (sales staff at the table) worked 10x as efficiently. See also "The Paradox of Choice". 

This study replicated and confirmed these results in two other experiments. In summary, this means:

1. Variety attracts customers. (Positive effect)
2. Variety has no effect on dwell time. (Neutral effect)
3. Variety reduces turnover. (Negative effect)

What does that mean for you?

Now back to our initial question: How can variety increase my sales? Make use of all the above findings by presenting variety to the outside world and thus attracting leads. In this way, you suggest to your customers that your extensive product range is sure to have the best solution for them.

However, once you go into the sales process with the prospects, you absolutely need a tool that reduces the variance in front of the customers. You can do this either with good sales people:inside (manual sales), a product configurator (online sales), or both combined.

It is important that this tool presents only those products and features to the customer that it has preselected for him or her. At the same time, this tool must make the customer believe that only these selected products and selected features offer the best solution for them (avoidance of FOMO = fear of missing out). This is crucial because - as the study found - leads will not give you more time for a larger selection. You have to be very economical and efficient with the time customers spend with you.
 

Summarized

Through the tool (e.g. a product configurator) you ensure that you find the best solution for your customers within their dwell time and offer it to them. This way, you not only get many leads, but also high conversion rates (high frequency AND high completion rate), and thus increase sales to the maximum.