Overchoice, also known as choice overload—is a cognitive impairment that occurs when people have a hard time making a decision due to being presented with too many options. And although the term is known to be first presented by author and businessman Alvin Toffler in his book, Future Shock, which was released in 1970—the philosophy behind the term can be referenced back much further than that.
Ancient Greek philosopher and scientist Aristotle, first propounded the concept of overchoice centuries ago when he said, “The more limited, if adequate, is always preferable.”
With choice overload being such an established concept around the world for so many centuries—you’d think that more businesses would help their audience avoid it by presenting them less options—which isn't the case at all.
So, let's further discuss just how offering less options is actually a great thing for your potential customers—as well as your startup.
The less is more effect
Founded and headquartered in my home state of California, In-N-Out Burger, is one of the most lucrative and popular fast-food restaurants west of the Mississippi. On an average per store basis, an In-N-Out Burger location nearly doubles a McDonalds location in sales revenue—generating an estimated $4.5 million from gross annual sales compared to the $2.6 million generated by the average McDonalds store according to Forbes.
With such a disparity in per store revenue, one could easily surmise that In-N-Out Burger would have an extensive array of menu items that would put the king of fast-food chains around the world to shame, right? However, ask anyone that's ever been to an In-N-Out Burger and they'll tell you—that's far from the facts.
With fewer than 15 menu items—In-N-Out Burger has a considerably limited menu compared to McDonalds—which according to Bloomberg, had as many as 145 menu items.
What this data shows us, is that contrary to popular belief—narrow often wins the race when it comes to influencing consumer purchasing decisions. That’s because subconsciously, the human mind automatically positions the brand that specializes in the fewest options above the brand that generalizes in an array of offerings.
“Making the brand name a generic is the ultimate weapon in the marketing wars. But it’s something only a specialist can do. The generalist can’t become a generic.” Says Jack Trout and Steve Rivkin, brand experts and co-authors of the book, Differentiate Or Die. “What makes a person or product unique is being known for one of the attributes. Crest is known for fighting cavities.”
By specializing in just the basic items associated with a hamburger restaurant (hamburgers, fries, and shakes) as opposed to doing things like entering the chicken sandwich wars of 2019—In-N-Out Burger has become the generic (which is a good thing) fast-food chain for millions of people that simply want a hamburger and fries.
“It’s not [about] adding new products. Or thinking of the next bacon-wrapped this or that. We’re making the same burger, the same fry.” Said Lynsi Snyder, the company’s president, in an interview with Forbes.
The sacrifice of offering less options
As I often say, every successful brand represents a sacrifice that was made by those who created it. In other words, in order to build a brand that truly resonates with an audience—you must be willing to acquiesce to the fact that you cannot appeal to everyone. Which is a sacrifice for those that seek the safety of their brand appealing to the masses.
But as author Seth Godin so eloquently stated in his book, Linchpin, “If you are deliberately trying to create a future that feels safe, you will willfully ignore the future that is likely.”
By presenting fewer products or services to a specific audience that would find them attractive—there's a great likelihood that your business will appeal to a much smaller audience than it would if you presented the general public with an array of items.
For example, speaking of fast-food chains, one of the world's most iconic brands, Taco Bell, which offers a wide array of items for breakfast, lunch, dinner, and even dessert—will probably always attract a wider audience than Chipotle—whose menu only consists of tacos, burritos, bowls, tortilla chips, and salad.
However, whenever the average American has an urge for just a taco or a burrito—guess which brand between the two their mind will automatically associate as being the more authentic and therefore—enticing option? Yep, you’ve got it…Chipotle! Which is why according to Yahoo finance, Taco Bell currently generates an estimated $11.78 billion in annual revenue. While Chipotle generates a reported $7.5 billion in revenue.
Now, it’s quite easy to look at those numbers and come to the conclusion that Taco Bell is clearly the more successful brand from a financial standpoint. But what those numbers do not show—and what probably keeps Taco Bell execs up at night—is that Chipotle only has just over 3,000 locations in the U.S.—in comparison to the over 7,000 locations that Taco Bell currently has in North America.
So, you can just imagine what Chipotle’s revenue would look like once they also have 7,000 locations—which according to the company’s CEO Brian Niccol, is definitely one of the company’s goals.
The balance you must find
While offering less items to your audience goes a long way in positioning your brand as a leader in its category by enticing people that much more to purchase the few items that you do provide. I’d be remiss if I didn’t acknowledge the fact that the world’s most profitable brands all aim to provide a plethora of items for consumers to purchase. Which is why McDonalds and Taco Bell are both 2 of the top 10 most profitable franchises in the world.
But the difference between those brands and your startup—is that McDonalds and Taco Bell both have the brand equity (as well as the advertising budgets) to easily pivot from their product failures like the McPizza and the waffle taco (believe it or not, both items actually existed at one point) and move on to their next big experiment. While one failed item that your startup offers could be a huge setback for your company.
The key is finding the right balance between your startup's niche and providing as many category-use-occasions within that niche as possible.
For example, if you owned a SAAS startup whose app provided online tutoring for college students, you could sensibly broaden the app's category-use-occasions by including a curriculum for college-preparatory students who needed help with their SATs. As opposed to extending and therefore—diluting your brand in the mind of your target audience by adding a feature like dating coaching to the app.
By finding the right balance and staying within your niche—your brand could become the generic in its respective category. Which would make it incredibly more enticing to its target audience.