Freedom of choice, or freedom from choice?

Jan. 19, 2006

Variety is the spice of life, so it's no surprise people want lots of choices. The panoply of restaurant offerings in the United States alone is proof people are obsessed with options.

But could too much choice be a bad thing? A growing body of psychological research says yes, and that runs counter to restaurateurs' efforts to give guests just about anything they could want or imagine.

Barry Schwartz, author of "The Paradox of Choice: Why More is Less," believes the modern-day tsunami of selections available at many restaurants confuses and frustrates customers.

"The more you throw variety at people, the more they're thinking about all the different things they could be eating, and that makes it almost impossible to be happy with just one," said Schwartz, a professor of psychology at Swarthmore College in Swarthmore, Pa. "And it might even happen that if they find it so hard to choose, they'll walk out with nothing. Research indicates that both things can happen."

While that may sound like heresy to pizza operators — whose core item is typically offered with a minimum of 20 toppings options — facts are, most customers still order pepperoni, sausage and mushroom.

So to drive trial and sales, operators add new sauces (Alfredo, barbecue, garlic oil) and crust choices (New York style, thin and crispy, deep-dish, Sicilian), not to mention novel appetizers, side items, pastas and salads. But is the customer really happier or buying more?

Mark Gold

What's Important

Customers say they want lots of options, but psychological studies say too much choice is overwhelming and even frustrating.

Learning how many options is too many takes some studious effort and a willingness to cut poor-performing items from the menu.

Learn to give customers variety within the ingredient line already in inventory. New options should make significant contributions to the bottom line, or they're likely not worth rolling out.

and Louie Sicinski opened Pizza Shuttle with a lean menu when they co-founded the operation in Milwaukee 11 years ago, but business back then wasn't taking flight. To ratchet up traffic, Sicinski, who'd previously cooked in an Italian restaurant, added pastas and sandwiches to the menu. Customers responded positively and business grew astoundingly. Pizza Shuttle is now one of the busiest single-unit pizzerias in the country, posting an estimated $4.9 million in sales in 2005. But when you look closely at the numbers, the bulk of those bananas come from pizza sales, Gold said, not other items.

"It's true, three out of five customers want pizza," said Gold. "But you can't ignore the question, 'What are the other two going to eat?' Sure, I'd prefer to sell just pizza at a 24 percent food cost and make a bunch of money on that alone. But other people want wings, sandwiches and pasta. And if we don't give them what they want, then we might lose the business."

What's tough for retailers of all stripes, Schwartz said, is customers are clearly drawn to choice. He said that if two stores selling similar items were located side by side, research consistently shows customers will go to the one with greater options. One study he conducted of a gelato shop that served 300 flavors proved this point. People flocked there and were dazzled by the vast array of colors and tastes. But as he and other researchers conducted customer exit interviews, they discovered those customers were largely unsatisfied with their experience.

By comparison, when they conducted the same research at a gelateria offering only 20 flavors, customer satisfaction there was much higher.

The trick for retailers, therefore, is to figure out how many choices to give customers without overwhelming them.

"The mistake we've made is to assume that because choice is good, more choice is better, and that's turning out to be incorrect," he said. "How much is too much? I don't know what the magic number is or where it is you cross the line from about right to too much. But there is a magic number, and you ignore it at your peril."

Tom Koenigsberg, vice president of marketing at CiCi's Pizza in Coppell, Texas, believes the right number of pizza choices to have on the buffet line is 12. Not only is that a manageable number for staffers to keep hot and fresh, it appears to satisfy the vast majority of the 525-unit chain's customers.

"We've found that's the right number to look bountiful, but not overwhelming," said Koenigsberg. Still, CiCi's operators will get an occasional special request for something else. "It's our policy that if you don't find what you want on the buffet, we'll make it for you. But the frequency of special requests is fairly low."

Which is just the

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opposite of the demand for basic pepperoni and sausage pizzas, he said. A look at CiCi's "rotation charts" (essentially schedules dictating how often and when every type of pizza is baked and placed on the buffet) proves this.

"You'll see many of the same pizzas, like pepperoni, in there at every rotation," Koenigsberg added. But others go on the buffet at more targeted times, such as veggie pizzas, when a higher concentration of female customers come through. "On school-sponsored nights, there typically are a lot of moms who are there, and they want to eat veggie pizzas."

Choice within constraints

One of the most famous slogans in foodservice is Burger King's "Have it Your Way," and when it comes to manageable choice — for both customers and restaurant operators — Schwartz called Burger King's method a good one. Why? Because customers are allowed to make just a few adjustments to their orders. Saying "no mayo or onion" is a huge difference from T.G.I. Friday's largely unsuccessful build-your-own burger offering that consumed a section of the chain's menu several years ago. When he was head of marketing for the 870-store casual-dining company, Koenigsberg oversaw the demolition of the build-your-own option.

"I took it off the menu because nobody ever ordered it," he said. "At best they were subbing a different kind of cheese on their burgers, and that was about as far as they wanted to go."

Friday's found that customers didn't want the responsibility of designing their own hamburgers — they merely wanted a meal, not a culinary challenge. Koenigsberg said customers expect restaurant chefs and operators to tell them what tastes good and then let them decide whether they want to try it.

"When you think of pizza, you generally don't think of putting spinach, mushrooms and Alfredo sauce on it," Koenigsberg said. "But when you see it on a buffet, you might think about trying it."

During Koenigsberg's tenure at Friday's, its mammoth menu was chopped from 125 selections to 65 that customers repeatedly bought. The slimmed-down list not only made customers happier, it pleased the staff as well.

Ultimately the company learned that while customers do like variety, they don't necessarily like variations on a theme. So it revamped the menu to feature one kind of nachos instead of three, two kinds of wings instead of five, a handful of chicken options instead of 10, etc. It provided choice within each menu category, Koenigsberg said, rather than a depth of options.

Stealing a phrase from Schwartz, who Koenigsberg saw speak at meeting of restaurant marketing executives, he said, "Choice within constraints is the key to satisfaction. Give customers choice, but only a reasonable, limited amount of it and people will be satisfied. I really believe that if we put 100 pizzas on our buffet, we wouldn't get more satisfied guests than we have right now."

Variety with existing inventory

On a recent visit to the new Whole Foods Market in Manhattan's revamped Columbus Circle, Aftan Romanczak found himself in choice overload mode.

"It was the most amazing display of food I'd ever seen, but I was so overwhelmed," said Romanczak, director of research, purchasing and development at Atlanta-based Steak-Out Char-Broiled Delivery. "I was like a kid in a toy store on Christmas, who was told he could choose anything he wanted, but I couldn't make a decision."

Romanczak, a 30-year restaurant industry veteran, who's worked in multiple dining segments, said the myriad customers he's served over that time typically don't care for many options. They like a basic range of options to choose from, plus an occasional twist for variety.

"When I was with Kenny Rogers Roasters, variety was the word, but it confused the customer," he said. "The products were

start quoteThe mistake we've made is to assume that because choice is good, more choice is better, and that's turning out to be incorrect.end quote

— Prof. Barry Schwartz, Author

spectacular, but it took 12 minutes to get customers through the line because people were going through overload. They just wanted chicken, but not so many different types."

Steak-Out, Romanczak said, offers menu variety by drawing on existing inventory and making minor tweaks that appear as new offerings.

"We're getting ready to roll out a combo menu that uses the primary proteins featured on the menu, and we've now added different sauces they're grilled with," Romanczak said. "They can still get salmon, but now they have an option of oriental sesame sauce or a hot-and-spicy barbecue."

Instead of trying to convince a regular steak customer to eat seafood, the company developed a grilled shrimp skewer to be sold on the side with the steak (or other entrees). Now the company pushes steak and shrimp combos and gets $4.99 with every add-on shrimp skewer.

Romanczak advised operators never to add items to the menu that won't make a significant impact on the bottom line. Business is about making money, he said, not following one's creative bliss or the quirky wishes of a few regular customers used to special treatment.

"It better give me at least a 5 to 6 percent contribution to my gross margin or I won't do it," he said.

While the belief at Pizza Shuttle is added variety draws more customers and kills the veto vote in the process, items that don't put green in Gold's pocket get cut from the roster.

"It's Catch 22: the more choice you give, the more business you get," Gold said. "But you have to learn how to chop off the bottom 10 to 15 percent of your menu every six months and get rid of the things that don't make you any money. That's what we're here for."

Topics: Marketing , Operations Management

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