occams-razor

The Occam’s Razor In A Nutshell

Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Understanding Occam’s Razor

Occam’s Razor is a principle that states that one should not increase (beyond reason) the number of entities required to explain anything. In other words, with all things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

It’s important to realize that Occam’s Razor is not 100% reliable. That is, the simplest solution is not always the correct solution. But when a business is presented with several solutions to a problem, its best course of action is to choose the solution with the fewest assumptions.

In business, companies spend vast amounts of time and money recruiting new customers and retaining them as loyal followers. Consumers themselves are bombarded with messages daily and are easily distracted by social media and other sources of cognitive overload. While complex marketing strategies may be somewhat effective in attracting customers, far simpler solutions help businesses retain them. 

Here, the simplest solution for the business is to focus on:

  1. Product quality. Many businesses equate the number of features with the value of a product. But they do not ask the customer what they value beforehand. Products with too many features distract a consumer and reduce product utility. Occam’s Razor suggests that product development teams discard as many features as possible and go for the simplest, most effective solution.
  2. Customer service. Simplifying customer services means removing as many barriers as possible. It might be streamlining the customer purchase journey by removing unnecessary sign-up forms. It might also mean removing wait times on customer support calls. Ultimately, consumer behavior is guided by simplicity and a pleasurable shopping experience.
  3. Defining their target audience. No product or business can appeal to everyone, so defining a target audience should be made as simple as possible. Simplicity is achieved by starting small and focusing on the traits of a single, ideal customer to develop a marketing persona.

This is Occam’s Razor at work. Simplifying procedures increases productivity and profitability by focusing on processes most likely to deliver results.

Examples of Occam’s Razor in companies

McDonald’s

In an attempt to boost their profits, McDonald’s created the now-infamous phrase “Would you like fries with that?” Behind this catchphrase, marketers selected a very simple way to increase profits out of what was likely a large spread of options. Fries are of course made with potatoes, which are cheap and abundant and thus very profitable.

Apple

While the removal of the headphone jack may have been a case of over-simplification, the design of the iPhone also reflects Occam’s Razor principles. With just a single button on smartphones and tablet devices, designers gave consumers a sleek and minimalist product without extraneous features.

Where can Occam’s razor be applied in business?

In this section, we’ll detail the ways Occam’s Razor can be applied in business to reduce complexity in certain situations.

Too many websites

Some business owners create a separate website for each of their brands with the belief that more sites equal more sales. However, this does not tend to be the case. Operating a single website is much simpler and more efficient. It is also much more cost-effective since hosting and maintenance costs are reduced.

In the context of marketing, too many websites means finite resources must be spread and diluted in the process. Aside from poor resource utilization, this also reduces an individual website’s ability to dominate its niche and be ranked on the first page of search results.

Other companies dilute their presence with different websites for their B2B and B2C operations. Unless there is a valid reason for doing so, these models should not be separated as doing so only leads to cost increases. Instead, it is better to keep it simple by creating a website that appears for all intents and purposes to be a B2C site. B2B customers can use the site by accessing a password-protected area where they can see a list of business prices, make volume purchases, or contact a dedicated support team, for example.

Bloated proposals

The most persuasive business proposals are those that focus on a simple minimum viable product (MVP).

leaner-mvp
A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else

Why is this the case? For one, simple MVPs tend to be cheaper and as a result, are associated with less risk.  They can also be developed more rapidly, which shortens the time until the company can enter the market. 

Despite these benefits, some product developers choose to ignore Occam’s Razor and develop complicated, bloated proposals where an excess of bells and whistles is the norm. The goal here should be to work with the customer and assess each feature on its own merits to determine whether it contributes to functionality. Superfluous features that do nothing but add complexity to the MVP should be discarded.

International expansion

Business owners can also become preoccupied with complexity when looking to expand into international markets. An eCommerce site looking to sell tennis rackets in France and Spain, for example, may feel the need to replicate their website on a .fr and .es domain. However, this situation is similar to building a separate website for each brand. That is, it tends to be more expensive, more inefficient, and less effective in terms of SEO.

For most eCommerce companies, a simpler course of action involves using canonical link elements for each country on their core website. For example, tennis rackets for sale in France may be found at tennisrackets.com/fr/ and in Spain at tennisrackets.com/es/.

While a .fr site written in French may convert higher, a separate French page on the core tennisrackets.com domain will be effective provided it prices the tennis rackets in euros and details country-specific shipping policies. In fact, any decrease in conversation rate is normally offset by reduced maintenance costs and the increased authority and visibility of the tennisrackets.com domain.

Key takeaways:

  • Occam’s Razor says that the simplest solution is more likely to be the correct solution. The theory does not provide the correct solution 100% of the time, but it does posit that a simpler solution with fewer variables yields more predictable results and is easier for the business to execute.
  • Occam’s Razor helps businesses focus on streamlining product development, simplifying customer service, and defining a target audience. McDonald’s and Apple are two examples of companies that have used simplicity to their advantage.
  • In more general business applications, Occam’s Razor is used to reduce the complexity that arises from too many websites, bloated product proposals, and international expansion efforts.

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