How to make choice easier

If any single word defines the consumer benefit of a market-based society it is ‘choice’. It is rooted in our culture.

Henry Ford’s car offer wouldn’t have echoed down the decades as the defining joke about the centrality of individualism if it didn’t hit a profound cultural chord.

Products, brands and services are all forms of self-expression and we learn from childhood how to make choices. But you hardly need to be a psychologist to observe that choice in many markets has run out of control and that there are psychological, not just shelf-space, limits to how much choice we can manage.

 Jam every day?

Sheena Lyengar is a Canadian who has studied how we choose. Her jam experiment is a famous example and a largely unheeded warning about what happens when people are overwhelmed with choice.

The experiment went like this. Lyengar set up a situation in a speciality grocery story in Menlo Park California where she had often shopped but found herself occasionally coming out empty-handed, overwhelmed by the choice available. She wondered if others had the same problem.

To find out, Lyengar and her collaborator, Mark Lepper, set up a jam-tasting booth near the entrance of the store. Every few hours, the booth switched between offering an assortment of 24 jams and offering an assortment of six. The researchers wanted to know which assortment attracted more people and which one would lead to higher sales.

They observed the shoppers as they moved from the booth to the jam aisle, which boasted 348 varieties.

As might be expected, 60% of the incoming shoppers stopped when 24 jams were displayed, but only 40% stopped when six jams were displayed. Clearly, people found the larger assortment more attractive. When these shoppers went to the jam aisle to pick up a jar, the shoppers who had seen only six jams had a much easier time deciding what to purchase.

The researchers discovered that the small assortment helped narrow down choices, whereas the large assortment left people unsure of their own preferences. Of those who stopped by the large assortment, only 3% ended up buying a jar of jam, which is far fewer than the 30% who bought jam after stopping by the small assortment. Lyengar and Lepper calculated that people were more than six-times as likely to buy jam if they saw the smaller display.

 A Better experience

In a recent article in Strategy+Business, Lyengar explores this idea and its consequences for marketers and retailers. She concludes that people don’t want choice, they want a better choosing experience. This may seem like a semantic quibble but it isn’t.

People want to feel satisfied with their choice without the frustration and indecision that goes with rejecting possible candidates. She offers four strategies to help people have better choosing experiences.

1. Cut their options. This is the obvious strategy but one not often followed for fear of losing customers.

In the mid-1990s, when Procter & Gamble Company winnowed its 26 varieties of Head & Shoulders antidandruff shampoo down to 15, eliminating the least popular, sales jumped by 10%. Another example comes from a 2001 study that tracked an online grocer that had made substantial cuts in the number of products it offered, across 94% of all the product categories. Not only did sales rise an average of 11% across 42 categories, but 75% of its customer households increased overall expenditures.

2. Create confidence through recommendations. No one does this better than Amazon and it is surprising that their techniques aren’t more widely copied. Presumably most people know what book, for example, they want. However, for those who are searching for enlightenment on a subject without knowing a specific author or title, the long and often detailed reviews, what others bought, books on similar subjects, reminders, all help focus and narrow choices. TripAdvisor.co.uk gets better and better on this score.

3. Categorise the options. Where the novice sees 100 different options, the expert sees maybe seven or eight relevant core qualities. The trick is to get the novice to see things as the expert sees them.

The easiest way to do this is to categorise. All wine sellers categorise but a more customer-friendly approach is taken by the US company Best Cellars. By consulting with oenophiles in advance, it limits its variety to 100 high-quality, reasonably priced wines. Then, instead of categorising by grape or by region, Best Cellars divides the wines into eight simple ‘taste’ categories, such as ‘fizzy’, ‘juicy’ and ‘sweet’.

 4. Condition them for complexity. For certain kinds of decisions you can set consumers up for success by encouraging them to learn from, and build upon, their own previous choices.

For example, Lyengar conducted a study with a major German car manufacturer. Researchers presented the first eight design choices in different sequences to different groups of car buyers.

One group had first to choose interior and exterior colour, with 56 and 26 options, respectively. From there, they chose features in descending order by number of options, ending with interior decor style and gearshift style (which were each limited to four options).

A second group of buyers had the same choices in reverse order, starting with the design elements that offered the fewest options and ending with the ones that offered the most. Although both groups eventually saw 144 total options across eight categories, the buyers who moved from high choice to low choice had a much harder time and settled for the default – and ended up less satisfied.

From: A better choosing experience by Sheena Lyengar and Kanika Agrawal. Strategy+Business, December 2010

 A small assortment helped narrow down choices, whereas the large assortment left people unsure