We already know that we are overwhelmed with choices every day. That is what is asked for – BUT, how affected are the customers really of all the choices? How many options are too many when it comes to making a well motivated decision? How can we ease the process of choosing for our customers, and at the same time make them more satisfied with the choices they make?
Sheena Iyengar, professor at Columbia Business School, has for many years done research about choices. In November 2011 she held a much appreciated TED-talk where she presented four techniques we can use to make our choice process easier.
Before we look at these techniques, we need to talk about the problems that can result from too many choices.
Consequences from too many choices
Do you know how many choices you make on a regular day? According to a survey Iyengar did with more than 2000 respondents, an average American makes about 70 choices every day. According to another survey, it takes an average CEO nine minutes or less to make 50% of their choices, while 12% of choices take an hour or more. This is quite a number of hours per day spent on making choices. If you think about your own choices: How well do you think you are dealing with these?
Sheena says that one of the biggest issues we have when it comes to choice is Choice Overload, which leads to:
- Reduced commitment
- Lower choice quality
- You are not happy with your choice
But why is it so?
Too many choices make it hard for us to compare the various options. Sheena has done a lot of studies on this, and we will mention some of them here.
Retirement savings study
One study was performed to see how many people chose to set up a retirement savings plan depending on how many funds to select from were available. Sheena found out that the more different funds there were to choose from, the fewer people chose to set up a program for retirement savings.
Sheena did another well-known study in a store she often went to during her PhD studies – Menlo Park Draeger´s. The store was fascinating because of a very wide range that included over 150 different kinds of vinegar, 250 kinds of mustard, 300 kinds of jam and so on.
She wondered if all the customers that went to the store actually bought more, or if they simply enjoyed walking around, amazed by the wide range.
Sheena and her colleagues set up a booth with a tasting of jam. During certain hours they had 6 different flavors to choose from and in other hours 24 different flavors. With 6 different flavors 40 % of passing by people stopped by the stall, while 60% stayed when there were 24 different flavors. In both cases, customers tasted in average two different jam flavors.
But how many did actually buy a jar of jam? Of the customers who chose from 6 different flavors, 30% bought a jar of jam, while only 3% made a purchase when they got 24 different flavors presented to them. This despite the fact that more people stayed, and more flavors were available.
So, how to avoid Choice Overload? Let’s take a look at the four techniques Sheena presented:
1 Cut! (Less is more)
Easier said then done? Many cases do show it can be worth the effort. Sheena has seen many cases where websites increase revenue, lower costs and improve customer experience by cutting down the number of choices presented to their customers.
Procter and Gamble decided to go from 26 to 15 different kinds of Head & Shoulders, which increased sales by 10%.
Golden Cat Corporation got rid of 10 of their least-selling cat litter products, and then received an increased income of 87% (where both higher sales and lower expenses affected the result).
One way to cut down on supply is to ask your employees to describe the difference between two seemingly similar products. If they can’t, the customers will definitely not be able to do it either.
Try it out!
2 Concretize (Make it vivid)
In order to really UNDERSTAND the difference between choices, the customers must understand the CONSEQUENCES linked to each choice.
For example: why do you think we tend to spend 15-20% more money when we shop with a credit card than when we use cash? Well, because we do not perceive credit card as real money and lose the perception of what it costs … (Journal of Experimental Psychology)
Experiment: Savings account
Sheena did an experiment with ING on how many people chose to sign up to a savings account. The test version included only one question in the form asking users to write down positive things that could happen in their lives if they saved more money. This led to a 20% increased share of enrollments and 4% increase in how much they were willing to save.
Customer case Magine: +9 % signups
Magine showed information and important explanation too late in its flow. With a clearer product description more visitors gained understanding of the product, which led to higher bounce rate. But those who continued on in the flow had a higher conversion rate, and the number of subscribers increased overall.
3 Categorize (Cues for variety)
More categories = Less choices.
We can handle more categories than we can handle specific choices.
For example, the selection of magazines in a supermarket was perceived both bigger and better when 400 papers were divided into 40 different categories, than when 600 newspapers were divided into 20 different categories.
Categories help us separate things. It is therefore important that they are made to say something to the person who MAKES the choice (the customer).
4Commit gradually (Condition for complexity)
The order in which we are asked to make choices, and the complexity of them, affects how simple or hard the choices are perceived to be. It in turn affects the commitment.
The trick is to gradually increase the complexity.
One experiment about gradual commitment Sheena did, was about the choices you make to order a personalized, custom-made car. Each option included a different number of choices: for example, the choice of color had 56 different options while selecting the motor only had four.
Some users initially had many options to choose from which then decreased, or“High to low choice condition” (the paint color choices before selecting the motor etc). Other users had the other way around, that is “Low to high choice condition”. The experiment compared how long users continued to be engaged in their choices by measuring when users pressed “default”.
It turned out that “Low to high choice condition” , where the choices gradually increased, kept the users engaged much longer before they started pressing “default”. Although it was exactly as many choices in both cases, but in different order.
Customer case Dagens industri: +29 % subscribers
Dagens Industri motivated the visitors to begin their subscription to the newspaper by for instance including gradual engagement and clarification of products.
These four techniques are designed to help both you and your customers to handle choices. The key to get as much as possible of choices, Sheena says, is to be “choosy about choosing”.
Also, remember that the choice is often made early in the buying process. That is where you most effectively can optimize for the customer (proven with A/B-testing).
What is your experience of choices?