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

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:

  • 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.
  • 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 pleasurable shopping experience.
  • 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.

Real-world examples of Occam’s Razor

In an attempt to boost their profits, McDonald’s created the now-infamous phrase “Would you like fries with that?” But behind this catchphrase, marketing executives 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 very cheap to purchase and thus are very profitable.

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

Key takeaways:

  • Occam’s Razor says that the simplest solution is more likely to be the correct solution.
  • Occam’s Razor does not provide the correct solution 100% of the time. Rather, it argues that a simple explanation with fewer variables yields more predictable results and is easier to execute.
  • Occam’s Razor helps businesses focus on streamlining product development, simplifying customer service, and defining a target audience.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here