How to offer consumers choice: People appreciate something more if they have something to choose from, but too much choice makes it hard to make decisions, especially if it’s hard to distinguish.
When my kids were little, I was taught the secret to living a tantrum-free life: offer choices. Do you want carrots or peas? Do you want ice cream in five minutes or ten? The options are carefully chosen, allowing the parent to keep the situation under control. But the decision is left up to the child, which creates the illusion of power. And it made for happy toddlers and (relatively) relaxed mealtime.
It seems that this desire for power stays with us as we grow up. In fact, the need to control our decisions has been shown to affect the outcome of life and death.
In 1962, N. A. Ferrari of Case Western Reserve University conducted a study on this subject. He interviewed female residents of a women’s nursing home to find out which of them had made the decision to join society and what the impact of that decision was. Shockingly, among the 17 women who felt compelled to move into the home, all but one died within 10 weeks. Conversely, only one of the 38 women who felt they freely chose to enter the nursing home died within that time frame. There was no difference in health status between the groups when the women first entered the nursing home: the only difference was their sense of control.
This is a disturbing finding. But what does it have to do with marketing? A study conducted in a more commercial environment confirms the basic conclusion.
In 1975, Harvard psychologist Ellen Langer sold $1 lottery tickets to office workers. Half of them were allowed to choose their number, and half were assigned numbers.
Shortly before the raffle, Langer tried to redeem the tickets. Those who were assigned numbers asked for an average of $2 per ticket, while those who chose their number wanted more than $8.
Overloading options can lead to consumers choosing not to buy anything or simply choosing the default or cheapest option.
The magnitude of the difference is impressive: many psychological studies show an effect on the order of 15% or 20% after bias is applied. But this – the suggesting agency – showed a fourfold increase.
Langer’s experiment and others like it in various categories show that we value products significantly more when we participate in their selection.
So what can brands do? Introduce more elements of choice – even if it seems trivial. If you’re a bank, offer people a choice between colors. If you’re considering an incentive, let people choose from several options, as Fred Olsen (pictured below) did. Even if no one chooses the least popular alternative, another option will seem more acceptable.
Spoiled for choice
So, choice is a good thing. But, as with most things in life, there can be too much.
In fact, evidence shows that too many choices can cause the decision-making process to stall. An overload of options can lead to consumers deciding not to buy anything or simply choosing the cheapest option.
Evidence for what psychologists call choice paralysis comes from the work of Sheena Iyengar of Columbia University and Mark Lepper of Stanford University. Their study, conducted in 2000, involved a kiosk selling jam in a supermarket. In some cases, the kiosk sold six varieties of jam, while in others it sold 24.
The results showed that the wider display had more stopping power – 28% more shoppers stopped at the booth with more variety. But this had no effect on sales. What’s more, shoppers were 10 times more likely to buy a jar of jam at a booth with limited variety. The researchers suggested that the sheer number of options available with a wide variety actually eliminates control – because shoppers can’t calculate all the variables and make the “right” decision.
While these results became famous, the true story is a bit more nuanced. Researchers later discovered that choice paralysis only occurs in some situations. In 2015, Alexander Chernev, a psychologist at Northwestern University, conducted a meta-analysis of 53 experiments and identified four situations where people prefer fewer choices:
- They don’t have clearly defined preferences.
- They are not familiar with the choices
- The options are similar and there is no clear winner
- The options are difficult to evaluate, perhaps because they are poorly presented.
His research shows that if any of these factors apply to your category, choice paralysis is an increased risk.
So if you want people to appreciate your product, offer options-but don’t get carried away. And you’ll end up with customers as satisfied as a toddler with ice cream.