Thursday, December 9, 2010

At what point do customers have choice overload?

When our family returned from a six-month sabbatical in Australia, our friends who met us for our “Welcome Home” celebration, offered us necklaces made from strings of Cheerios.  That present represented how much we missed that cereal treat while away.  But, even more important, it represented the limited choices Australians have when compared with those of Americans. While we have hundreds, they may have a dozen.  Their cereal of choice is Weet-bix, a whole grain breakfast biscuit they spread with vegemite (made from leftover brewers’ yeast extract, a by-product of beer). 

One lasting and riveting impression when we were there was entering their “super” markets, and being faced with such limited choices.  We recognized that many of the products to which our family had become accustomed in the U.S., were not available. 

There is something, of course, to simplicity.  It doesn’t really challenge your brain; it takes less time; and the results are, generally, predictable. 

Many people have solved the choice dilemma in the U.S.  They know exactly what they want, and they work carefully to just get in and get out of a store.  40 kinds of toothpaste?  They have stuck with one brand for over 25 years.   

One way for dealing with a large number of choices is not to deal with them at all. 

The U.S. supermarket, on the other hand, causes people to burn their brain choosing between 40 toothpastes, 75 iced teas, 175 salad dressings, and 285 brands of cookies.  

This isn’t the end of it.  There are 85 types of crackers, 285 types of cookies, and 80 pain relievers.  And this is a small percentage of the supermarket. 

There are thousands of mutual funds, hundreds of cell phones with dozens of calling plans, thousands of insurance policies, medical plans, and investment opportunities.  There are so many TV shows that people tape the ones they don’t have time to watch—and never have time to watch the ones they tape.  In every way we turn, we face mind-boggling choices. 

If you go out to buy a pair of jeans today—size 34-33—you are likely to face many decisions.  Do you want them slim fit, easy fit, relaxed fit, baggy or extra baggy?  Do you want them stone-washed, acid-washed, or distressed?  Do you want them button-fly or zipper-fly?  Faded or regular?  Sorry, there is no thing as regular jeans any more. 

People choose from 1,500 drawer pulls at The Great Indoors.  Amazon gives every town a bookstore with 2 million titles, and Netflix promises 35,000 different movies on DVD.  Choice is everywhere. 

“As the number of choices grows further,” writes Swarthmore psychologist Barry Schwartz in The Paradox of Choice, “the negatives escalate until we become overloaded.” 

At what point do we become a prisoner of too many choices?  Too many choices produce
paralysis, not liberation.  At this point, Schwartz writes, “It might even be said to tyrannize.” Americans are facing a crisis of choice. 

By creating many options, industries have done a favor for customers with varied tastes and body types.  Average Americans, for example, order nonfat decaf iced vanilla lattes at Starbucks.  For some customers, however, what was a very simple decision—buying a cup of coffee, for example—that required but a brief moment, has become a complex one in which they are forced to invest time, energy, no small amount of self-doubt in some cases, as well as anxiety and dread over the ordeal.  And this goes on with reference to numerous products in countless shopping experiences. 

The fact that some choice is good doesn’t necessarily mean that more choice is better.  For many of us, increased choice means decreased satisfaction. 

Does anyone have to wonder why there has been a 75 percent increase in Americans being treated for clinical depression over the last 25 years?  “[Americans] are increasingly unhappy, riddled with anxiety and regret, because we have so much freedom to decide what to do with our money and our lives,” writes Virginia Postrel in an online article entitled “Consumer Vertigo.” 

Choice produces paradoxical effects.  For example, people feel an enormous burden to get enough information to make good decisions.  Do they have the time to find the best digital camera, the best cell phone plan, the best 401(k), the best health insurance, the most economical automobile? 

Even when choices are relatively simple, getting the right information isn’t easy.  One problem is with the way options are presented or “framed.”  For example, we accept a “discount for paying cash” but reject a “surcharge for using credit cards,” even though the two mean the same thing.  We spring for a “bargain” sweater marked down from $200 to $100 when normally we never spend that much for a sweater.  We instantly turn against the inheritance tax when it is relabeled “death tax,” even though most of us will not be leaving enough behind to be affected. 

If you’re a person who wants the very best, you’re likely to be disappointed.  You check out all the alternatives to feel you got the best.  But, in a world of 80 pain relievers and thousands of mutual funds, it’s just not possible.  So, even after you’ve made a decision, you end up miserable.  Why?  Because you’re absolutely convinced that had you looked longer, you would have done better. 

Older people have learned two important lessons from life’s experiences.  They are less likely to seek out the very best.  The “tried-and-true,” even if only “good enough,” is good enough. 

Also, older people know that limited options can be liberating.  Forced to wear a seat belt, or sustain the idiotic, droning of a high-pitched, piercing noise, they wear the seat belt and seldom rebel.   Although it may seem like they’re in a rut, making the same old decisions on products over-and-over again simply means they don’t have to settle the same issue again and again.   

Settled issues save the time and energy that are needed to make the intelligent choices when they are required. 

Studies have proven that when customers are given a narrow-range of choices, they are more likely to make a purchase.  In one study, significantly fewer choices increased purchasing propensity by ten times. 

It is true that without any freedom of choice, life would not be worth living.  But, it is also true that more choice does not necessarily mean greater happiness.  You do wonder, at what point customers have choice overload?  

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At the website, CustomerInnovations, Frank Capek has written a long article entitled, “Optimizing the Most Critical Elements of the Customer Experience: Customer Choices.”
The best part of it is the section, “Understanding how customers make decisions.”  Capek ends his article saying: “In summary, from a business perspective, the most critical elements of the customer experience involve the choices that customers make:  the choice to buy; the choice to recommend; the choice to continue as a customer.” 

Another long article at The Conference Board, in an article by Sol Hurwitz, “Making Things Simple: The marketing of complexity.,” suggests that the key to “choice overload” is to make things simple, and in the article Hurwitz makes a number of interesting and valuable alternatives.  This is another useful and worthwhile article that pertains to the world of business. 

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Copyright December, 2010, by And Then Some Publishing, LLC
    
   

4 comments:

  1. Maximillion Ryan IIIDecember 9, 2010 at 8:30 AM

    I'd love to be able to comment on this topic but I'm still trying to decide which kind of Cheerios to eat as I read - Honey Nut, Chocolate, Frosted, Banana Nut, Fruity, Yogurt, Apple Cinnamon . . . Plain? As you can see, this will take a while.

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  2. Dear Mr. Ryan III,

    You have actually made your choice easy. You have found seven different flavors of Cheerios, just choose a different one every day of the week. I'm sure the people at General Mills (who will be reading our comments, of course!) will love you for it.

    Thank you Mr. III for posing your sophisticated, complicated, and very labyrinthine question. If you have any other bewildering puzzlements, just remember, And Then Some is here for you.

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  3. Maximillion Ryan IIIDecember 17, 2010 at 8:04 AM

    Dear anthensome, I appreciate your help in this matter but I am afraid the problem has grown incrementally. It turns out there are more than seven varieties of Cheerios. Additional varieties include Berry Burst, Cheerios Crunch and Multi-Grain. Oh, General Mills! You are the bane of me!

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  4. Dear Mister Third,
    Yes, you are trying the patience of And Then Some. We have a limit on the number of times we can help any individual, and you are close to exceeding that limit. You have increased the number of choices of Cheerios from seven to ten. I would suggest that you purchase one box of each kind, and give one to each of our grandchildren. In January, I understand, that number will be exactly ten, so you can delay your purchase until then. But the beauty of this solution is that you can visit each of our grandchildren on a regular basis to receive your proper quotient of each cereal. What a truly brilliant idea. Our grandchildren will LOVE seeing you on a regular basis. You could even wear a white beard along with a bright red suit, a black belt, and red hat with white trim! Just a thought.

    ReplyDelete

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