Can Less Mean More?
Reducing product offerings to boost sales
Many smaller businesses sometimes feel they are at a disadvantage when competing against larger, more established operations that offer a wide range of products and services. Therefore, they believe that in order to gain market share and boost sales, they too must provide customers with a wide array of choices in materials and restorative options. But in business that’s not always the case; in fact, offering less can mean more.
When analyzing the business strategies of some laboratories, there were many options featured on laboratory prescriptions, websites, price lists, etc. For some dental laboratories, the options ranged well over 100 items.
But when these were all analyzed for profitability and efficiency, it became evident that each laboratory client typically bought only one to five specific items. Why weren’t these customers taking advantage of all the options the laboratory was offering? Shouldn’t a wide range of options be exactly what the customer wants? A recent study was developed to test the common marketing theory that more choices are better for customers. The idea is that people like more choices, so providing more options should lead to more sales.
In a well-known university study,1 a student set up a table loaded with jams outside of an upscale grocery store. Over a period of two consecutive Saturdays, research assistants offered samples of six flavors of jam on one Saturday and 24 flavors of jams the next Saturday. Approximately 60% of the people who stopped sampled one of the 24 the jams, whereas when six flavors were offered, only 40% of the people who stopped sampled the jam. On the surface, one would tend to conclude that more choices attracted more customers, but the study further showed that of the 60% of customers who sampled one of the 24 flavors, only 3% purchased a jar of jam. Of the 40% of customers who sampled the six flavors of jam, 30% of them purchased a jar. Using the study findings and basing it on 100 people, when 24 flavors were sampled, 60 would stop but fewer than two purchased (1.8 to be exact), and when 6 flavors were sampled, 40 stopped, and 12 purchased. Which table would you want your products to be on?
So the marketing theory was disproven in this case. Contrary to popular belief, too many choices can be bad for sales. Customers can be attracted to a large number of choices, but when it comes time to make a purchase, too many options can make decision-making difficult or confusing and ultimately lead to fewer sales.
Following this example, there are several ways you can refine your approach to product offerings.2 You can narrow your focus on creating one or several very-high-quality restorations or appliances and avoid work that could distract you from giving them 100% your attention. In the end your product will be finer in detail and more consistent, making it much better than others on the market.
Another way is through specialization. Instead of creating a product that serves all the dentists, you can create a product that serves fewer dentists exceptionally well. Targeting a niche of the dental market could lead to success because you may easily capture most of those who feel underserved.
Lastly, focus on efficiency. Pursuing a specific group of dentists with a limited product line, you can develop your market more efficiently rather than splitting your efforts across a broader client base. This method requires that you really get to know your customers and become more sensitive to their specific needs. At the same time, you can move more quickly and easily to fabricate your product offerings to cater to those needs.
Staying focused, specializing, and becoming more efficient by offering fewer products and services are not magic formulas for all small laboratory businesses. However, for those that successfully adopt such a strategy for their product offerings, find niche markets that need servicing, and create more targeted marketing campaigns, the less-is-more concept can prove itself not only viable but profitable as well.
1. Putnam J. Are you losing sales by giving customers too many choices? Kissmetrics blog. https://blog.kissmetrics.com/too-many-choices. Accessed July 12, 2017.
2. Wong D. The pros and cons of selling one product. https://readwrite.com/2011/04/08/the-pros-and-cons-of-selling-one-product. Accessed July 12, 2017.
About the Author
Nick Azar is a DAMAS consultant, business strategist, executive coach, and founder of Azar Associates in Santa Clarita, California.