Plan for Customers to Satisfice

In the 1950s, psychologist/economist Herbert Simon coined the term “satisficing” to refer to his finding that successful people accept less-than-perfect alternatives so they can move on to the next choices they want to make. We are satisfied with sufficing.
     But your customers, who are now making their purchase decisions in a world of seemingly boundless alternatives, might drift from satisficing toward maximizing. Maximizers hold out for the ideal and are always looking for a better trade-up. Researchers at Swarthmore College find that although people might spend more time on certain decisions than on others, maximizing-satisficing is a personality dimension on which consumers vary in stable ways.
     It’s in your interest as a retailer to have your customers toward the satisficing side on that personality dimension. For an example of why, consider the new federal legislation that requires restaurant chains with at least twenty outlets to post calorie counts on their menus and provide other nutritional information in response to customer requests. The law doesn’t take effect nationwide until March. However, a similar law in my home state of California is in effect now, and the reactions to that law are instructive.
     Quick Service Restaurants (QSRs) like McDonald’s, Dunkin’ Donuts, and El Pollo Loco have been adding lower-calorie options to their menus. But according to a recent Los Angeles Times article, the QSRs also have in the works for 2011 entrees such as bite-sized sausage links wrapped in a maple-flavored pancake and a 1,310-calorie breakfast platter. A Marketing Daily posting says that the restaurants are doing this because that’s what customers want.
     It’s another example of barbell retailing, in which consumers are avoiding the middle choices in favor of alternatives further out toward the extremes. Either the low-calorie option with the less indulgent flavor or the indulgent option with the abundance of calories. The way this works best, though, is for the customer to be a satisficer, to be satisfied with a choice that comes close to the ideal of a low-calorie fulfilling meal.
     It works nicely for the customer, at least from a mental health perspective. The Swarthmore researchers say that satisficers have higher life satisfaction, happiness, optimism, and self-esteem than do maximizers.
     It also works out well for the retailer. The Marketing Daily post points out how this bifurcated merchandising allows a retailer to increase profitability by reducing necessary inventory and, in the case of restaurants, preparation expenses.

Click below for more:
Move Ahead with Incomplete Information
Attend to Genetic Influences in Selling
Strengthen Your Barbell Retailing