Consumer buying behaviors: The power of choice … or not?

Toothpaste Aisle -- too many choicesIf you were to poll consumers, most would probably tell you that they love to be given many choices or options when it comes to merchandise and services.

And why not? Everyone recalls hearing about the “bad old days” of the Soviet Union and Communist China, when people had the choice of one type of bread or one color of clothing.

In the United States and other Western economies, we’ve long provided consumers a vast array of selection — sometimes with very little actual differentiation.  And those choices have proliferated all the more in recent years. 

[Take a walk up the toothpaste aisle at your local retail store and you’ll see “product choice, circa 2012″  in action – and on steroids.]

From the mundane to the important in goods and services, we have more choices today than ever before. But how well are we coping with having all of these options?

Not well at all, according to Barry Schwartz, the author of an important book on the topic. His book, The Paradox of Choice: Why More is Less, was published back in 2005 but is still quite timely today – perhaps even more when considering what’s happened in the ensuing years to things like the latest range of satellite television viewing package offerings from DirecTV.

Dr. Schwartz, who is a professor of social theory at Swarthmore College, posits that people are often overwhelmed by everyday decisions that have become increasingly complex due to the burgeoning number of available choices and options.

This over-abundance of choice happens not merely in the realm of toothpaste, but also in big decision areas such as selecting a healthcare provider, making investment decisions, deciding whether to move to a new city or state, or selecting a college or other educational program.

According to Dr. Schwartz, this is what often happens when confronted by so many choices:

 People question their decisions before they even make them

 The myriad of choices can set up unrealistically high expectations

 Depending on the importance of the decision to be made, too many choices can actually lead to decision-making paralysis

At what point the lines of “too few choices à la Havana” and “too many choices à la Atlanta” cross, differs depending on the situation: What might be a beautiful array of options for one person may induce an unacceptable degree of stress for another.

Dr. Schwartz lays out a number of suggestions for people who find that the bevy of choices produces too much stress, too much anxiety, or simply too much “busyness” in their lives. In turn, Harvard Business Review bloggers Anna Bird, Karen Freeman and Patrick Spenner help by coming at it from the other side.

This trio of business writers tells marketers, “If customers ask for more choice, don’t listen.” Their advice, as paraphrased by search marketing über-specialist Gord Hotchkiss, is this:

“The harder consumers find it to make purchase decisions, the more likely they are to overthink the decision and repeatedly change their minds or give up on the purchase altogether. In fact, regression analysis points to decision complexity and resulting cognitive overload as the single biggest barrier to purchase.

“Provide them with fewer choices, and make them as relevant and compelling as possible. Ease the burden of risk by providing information that reassures.”

Hotchkiss offers a few additional words of wisdom as well:

“Realize that one of the components of risk is the degree of bias in the information we’re given. If that information reeks of marketing hyperbole, it will be discounted immediately.”

So the bottom line for marketers could be this:  Simplifying product and service offerings may deliver just what consumers actually need (as opposed to what they say) … while also making employees’ lives in the product management department a whole lot easier.

4 thoughts on “Consumer buying behaviors: The power of choice … or not?

  1. This is precisely why I hate grocery shopping! Who needs 15 different choices of sandwich bread?

    And also … tell the product managers that “new and improved” isn’t usually; it just forces me to (once again) reevaluate all fifteen choices.

      • There is one basic fact that all these considerations should bear in mind:

        If companies do something/anything, they do it to maximize profits, not to be nice to customers – unless that serves to maximize profits.

        In fact, it is illegal for a board of directors of a corporation to act against that basic goal. Provided you have standing, you can personally sue any member of a corporate board for fiscal irresponsibility.

        The exception – perverse and actually illegal – is actions taken by corporations to make stockholders believe that the result might be an increase in profits so as to raise the stock prices.

        Example: Zap an entire in-house IT department (“Yeah!! Fewer jobs!!! Yeah!!!!”) to then outsource the very same jobs … often to a company made up of or hiring the very same people.

  2. How many versions of Excedrin are there? Do they actually have different ingredients?

    What’s the real difference between a Buick and a Chevy?

    What’s the real difference between this year’s model and the “all-new, must-have” one of next year?

    What’s the point of the most luxurious, high-end version of XYZ we can’t afford? So we buy the mid-range version, feeling lucky to be able to afford at least ‘that’ XYZ.

    BTW., the ‘all new’ is something I avoid like the plague. Why invest money to buy the all-new, time to learn to use the all-new, my own life energy projecting expectations onto the all-new … all for no tangible reason other than having been indoctrinated that what I have is somehow ‘deficient.’

    Which it is not.

    It’s all too much — and I’m getting rid of as much as I can, whenever I can.

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