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March 17, 2016

The Psychology of Choice

Behind the consumer mindset of making decisions

The average adult makes about 35,000 decisions each day. As marketers, our goal is to make the decision of choosing our product or services an easy one. Often when we think about making our brand more attractive to customers, we consider how to improve our product. But what if your products aren’t the problem? What if the problem is the number of them?

Symptoms of overload

If our goal is to make choosing our product over the competition easier, then why do we make the customers choose among 20 different similar products by the same brand? Consumers like to have choices, but offering too many choices causes overload. Anyone who has ever stepped into the light bulb aisle of a retail store has experienced overload. With an endless array of choices in wattages, sizes, colors and efficiency levels, we experience an inability to choose the ‘right’ light. The irritation and confusion that overload causes may make customers switch brands or walk away from the product entirely.

Studies have shown that when customers where given 24 product options, only 3 percent of those customers made a purchase. However, when the customers were given only six product options, the percentage of customers who purchased a product jumped to 30 percent. Proctor & Gamble Co. exemplified how overload affected sales for its Head & Shoulders® product line. When the company chose to reduce its offerings from 26 to 15, the company saw a 10 percent increase in its sales.  Vanguard® experienced a similar phenomenon when it discovered that for every additional 10 mutual funds offered, participation in financial planning decreased by 2 percent. When given an abundance of choices, customers tend to focus on avoiding making the ‘wrong’ choice, which makes the process seem stressful and unmanageable. 

Overcoming overload

The overload phenomenon becomes even more stressful when considering e-commerce. The Internet offers an unending number of choices that can seem daunting to an undecided consumer. Here are some ways you can reduce overload on your website: 

  • Categorization: One way to avoid overloading your customer is to categorize your products. Categorization allows customers to make a series of smaller choices, making the process seem less daunting.
  • Recommend: Giving customers personalized recommendations allows them to choose from a smaller pool of choices. As discussed earlier, reducing their number of choices allows for a less stressful and confusing decision-making process. 
  • Limiting choices: One great way to limit consumer choices is through creating ‘packages.’ Many companies use this approach to allow customers to customize the product or service to their needs. The result is that customers are able to choose from a few larger offerings as opposed to a collection several smaller offerings.3 
  • Filtering: Offering online filters for your products is similar to giving your customers an online sales associate. They can enter all of their product specifications into the filter and the most appropriate products will be chosen for them.4
  • Highlighting: Enlarging or highlighting a product when customers place their mouse over it allows them to mentally set the product apart from the others. This helps customers view the decision making process as a more manageable task. 3

De-cluttering the decision making process for consumers makes for a stress-free environment that will ultimately increase the likelihood of purchasing. When it comes to displaying your products, trade in ‘the more the merrier’ for ‘less is more.’

 

Sources

[1] http://www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0

[2] https://msujaws.wordpress.com/2009/11/08/why-head-and-shoulders-has-less-variations-for-sale/

[3] https://www.usertesting.com/blog/2015/07/28/how-to-use-the-psychology-of-choice-to-increase-online-sales/

[4] https://www.psychologytoday.com/blog/behind-online-behavior/201410/the-psychology-choice