Choice Paradox
Too much choice will lead to indecision and lower sales
In a study of jam, consumers were more likely to buy when offered 6 jams (40%) instead of 24 jams (3%). Consumers also reported greater buying satisfaction.
Iyengar, S; Lepper, M (2000) When Choice is Demotivating Journal of Personality and Social Psychology, 2000, Vol. 79
When people have no choice, life is almost unbearable. As the number of available choices increases, as it has in our consumer culture, the autonomy and liberation this variety brings are powerful and positive. But as the number of choices keeps growing, negative aspects of having a multitude of options begin to appear. As the number of choices grows further, the negatives escalate until we become overloaded. At this point, choice no longer liberates, but debilitates. It might even be said to tyrannize.
And so then, a quote from Barry Schwartz’s seminal book The Paradox of Choice perfectly sets the scene of this thought.
But stepping aside from the jam experiment for a moment, it’s important to recognise the difference between choice and complexity. Consider choosing between jams on the one hand, and making a decision about important long-term investment options on the other. There is a lot more complexity involved in the latter, and the risk of putting off or not carrying out such a decision is significantly higher to a person’s wellbeing than walking out of the shop without a chosen jar of jam.
Takeaways for Decision-Makers
- Think hard about the minimum amount of choice you need, in order to clearly differentiate your brand from the competition. Look back 6 years and compare Apple’s iPhone product range next to Nokia’s, for instance. Choice can be a confusing burden as much as a convenience.
- Every decision you fail to take to focus and simplify your range, is one more that your customers will be burdened with, every single time.
- Too much choice can be perceived as a lack of confidence in your own brand. Being asked 12 different questions about how you want your burrito will be cognitively-tiring and leave many wondering why the company can’t be more bold and self-assured with respect to its product.
- Streamline choice architecture to encourage some sort of ‘good’ decision (whatever you, as a decision-maker, determine ‘good’ to be) where one would otherwise not take place at all. For instance, reducing choice and consumer apathy within a user flow at key intervals where drop-off has been found to be high will increase conversion.
- You’ll have to work harder & spend more to market the differences between the products in your range, the more choice you offer.
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- Aspirational membership schemes and belonging The category size bias provides a credible explanation for why we human beings tend to associate with large groups that are viewed favourably by society. Being part of a large and “desirable” social group can make others believe that we also possess the many qualities of its members. For small businesses, it suggests that forming or being a part of a consortium or large and high quality networking group can dramatically elevate your brand image.
- Communicating category sizes to nudge effectively Highlighting the differences between the large and small categories is highly likely to enhance the effect of the Category Size Bias. For instance, for software companies, stating that there are 10 features in the premium version versus 4 in the free version will help nudge a decision towards the premium version
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- The findings from this braingem can nudge better healthcare choices, encourage consumption of a given product, and lead to more confident consumer decisions.
- We mistakenly believe that items in larger categories have a higher probability of being picked than ones in smaller categories, despite all items having an equal chance of being picked.
- We’ll spend or gamble more money on items put in larger categories.
- We’re more likely to take action from tasks when they’re in a bigger list, over a smaller list.
- We once we put something into a group, we perceive it to adopt all the characteristics of that group. This suggests that small companies should foster alliances with similarly-principled, more established companies.
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