On a recent run listening to a podcast the topic of “choice paralysis” came up as a well known situation where offering too much choice can lead to less sales, not more.
This may seem counter intuitive, but there a number of studies in the retail/supermarket industry where sales tripled when choice was reduced by 60%. Although IT services is a different beast it appears there are some valuable lessons we can learn and apply to our CPQ environments…
Logically Group Products
Segment different products (and choices) into logical groups where the products make sense together, but also use this as a tool to limit the choices available in each group/step.
Generic to Specific Choices
With CPQ, early choices will have an impact on future choices. Building your configuration to address the more generic options can allow for downstream choices to be limited. For example, the “location” of a service may define different supported configurations. Determine the location to limit other configuration choices early in the cycle before they perplex the user.
Three is the Magic Number
We think three choices within a configurator group makes it inherently easier to pin down a decision. We can’t point you to any science on this topic – more of an observation and personal perspective.
Lead the Buyer with Recommendations
In a well-built configuration moving from generic to specific choices, it is imperative to lead the buyer with “filtered” choices and recommendations – based on the context of previous choice.
Remove Choices that are not Suitable/Sellable
If it doesn’t make sense, or wouldn’t be applicable based on previous experience or typical patterns – then take that choice out, it will only lead to paralysis.
Monitor Common Configuration Patterns
As an industry we spend too much time engineering for the edge cases. Build for the typical customer and monitor for configuration patterns (collections of choices) that drive optimization.
So the question begs… what does this mean to me or my customer?
It really comes down to a few items that will improve the relationship with that prospect or customer.
Reduce Time to Quote
Simplify the Decision-making Process
Improve Ability to Articulate/Understand the Value of a Choice
Delivery a more Predictable Experience (Known Configurations
If you are not sure where to start – we have a library of configurable products for data centre, network services, professional services, cloud, etc. Our team would love to run you through a demonstration and draw out our best practice points above.
If you have an example of a configured product/service, this is even better as we love challenges. Reach out and throw the gauntlet down for us to build your example in the servicePath platform.
Thanks
Mike
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