Cookies, vacations, and other choices…

Many people believe that consumer satisfaction in every conceivable area will automatically increase with the number of choices – but not Barry Schwartz. In his book The Paradox of Choice: Why More Is Less, he explains that the more alternatives people have, the more stressed-out and indecisive they become as they struggle to make the best possible choice. This belief was confirmed in a taste test, where those consumers who were offered a four-fold increase in jam choices registered a decreased purchase rate.

Who has the time to choose?

We are constantly dealing with choices. American supermarkets stock 285 different kinds of cookies, 21 of which are of the chocolate chip variety. The drug store has 40 kinds of toothpaste, there are 110 choices of TV (high definition, different kinds of screens, sound quality, etc.) – and it’s the same story, from insurance to jeans, and even for schools. And now, there is a dizzying array of rates and airline companies waiting to whisk you off to your destination, as well as hundreds of activities offered closer to home, on which people can spend their free time – if they have any left!

People associate choice with the independence, freedom and power they confer. It would seem evident that the opportunity to make more and more choices in every conceivable area would tend to increase consumer satisfaction. However, according to Barry Schwartz, the opposite is true: people think they want to have more choice but – the more they have, the less satisfied they are with the choices they make.

Who has time to look at the 300 different kinds of cookies on the supermarket shelves before making a decision? When faced with such overwhelming choice, the consumer will usually purchase his regular brand, without paying the slightest attention to at least 75% of the brands clamouring for his attention and his grocery dollars.

Too many choices negatively affect consumers

Human nature being what it is, too much choice makes us stressed out, unhappy and dissatisfied. Why? Because we don’t have the time or the information to make an informed decision. Suppose it turns out to be the wrong decision? Suppose I could have found something better? Will I end up regretting my choice?

Modern consumers end up putting more effort in making a decision, and less into enjoying the results. And while it’s true that choices made in the cookie aisle are not earth-shattering, the higher the amount of money involved, the more important the decision becomes. For example, how can anyone make an informed decision about which cell phone to buy? By the time you’ve compared the vast array of models, options and plans available, the technology will already have changed!

In this context, two types of personalities emerge: the “maximizer” (the one who makes every effort to find the best possible option in terms of price and quality) and the “satisficer” (who establishes criteria to reduce the number of possibilities and thus facilitate the decision-making process).

Schwartz maintains that it,s better to be a “satisficer”, since his way of thinking leads to less dissatisfaction. After all, do we really need the best product in every single category, along with all the stress that searching for it involves? Or could we simplify our life by settling for a “good enough” kind of choice that we can live with?

What if we applied the “jam principle” to tourist products?

Living as we do in a society with extremely varied tastes, it is natural to suppose that if merchants limit their offerings, they are likely restricting their potential clientele. However, this statement is only partially true, for a greater number of products does not necessarily translate into higher sales, as illustrated by the following test, in which consumers were asked to taste different kinds of jam and then decide whether or not to buy them.

Close to one third of the people who only had to choose between six kinds of jam bought a product. When the number of choices was increased to 24 ? with the obvious intention of appealing to a greater range of tastes ? the purchase rate dropped to 3%! It seems that the stress of having to choose between so many products outweighed any interest the consumer had in acquiring the product.

If more choice attracts more people, but fails to persuade them to buy, then merchants have not accomplished their primary objective of making a sale. Barry Schwartz believes most people are comfortable choosing between 6 to 12 different alternatives. Here are a few ways we can put into action the lessons to be learned from this paradox of choice:

• Restrict choice. On your brochures or website, group products according to theme. Or, show only your top 5 to 10 products on the site, and provide a link where customers can go to see more. Try it; the results will surprise you.
• Facilitate choice. Faced with a confusing array of products, the consumer needs help making a choice; the merchant who can quickly and simply convey the advantages or distinctive features of a certain product has made the consumer’s life easier and beat out the competition. The best price guarantee instituted by many large hotel chains to attract internet users to their sites is an example of this approach.
• Provide positive reinforcement. Once the sale is made, many clients agonize over their decision. This is the time to deliver some positive reinforcement; provide your client with some solid reasons for his choice, so he has can counter his neighbour’s claims that he paid half as much for something twice as good.
• Target specific markets. Faced with such a multitude of products and the difficulty of making a choice, the client must restrict his alternatives. Faced with a multitude of clients – and the difficulty of differentiating his product from the many competing products – the merchant must follow the same approach: he must focus his efforts on reaching the people most likely to be interested in his product, i.e., segment his clientele.

Sources:
– Hurst, Mark. “Interview: Barry Schwartz, author, -The Paradox of Choice”, [www.goodexperience.com/blog/archives/2005_01.php#000106], 20 janvier 2005.
– Pollack-Pelzner, Emma. “You Choose, You Lose – Does the Freedom to Choose Make Us Unhappy?”, The Yale Review of Books, vol. 8, no 1, hiver 2005.
– Schwartz, Barry. “Excerpt – The Paradox of Choice”, USA Today, 16 janvier 2004.
– Solman, Paul. “The Paradox of Choice”, [Online NewsHour], 26 décembre 2003.