The Paradox of Choice

Giving greater choice does not mean more will be chosen! 

Most people believe that having a choice is good. The belief here is that choice gives us freedom, so if we have more choices we have more freedom, the better it is for our lives.

But some research has found that this is not necessarily the case. Researchers set up in a shop and presented an array of tasty jams and enticed shoppers to buy a jar. In one version, there were six varieties shown to shoppers. In another, there were 24 jams. The second, larger array attracted more traffic. But the smaller array led to ten times more purchases.  The researchers concluded that sometimes we feel overwhelmed by the number of options available to us.

Having too much choice has two negative effects on people. Firstly, paradoxically, is that too much choice produces paralysis, rather than liberation. With so many options to choose from, people find it very difficult to choose at all. Think of comparing retirement plans or different car insurance policies.  

Second, there are significant opportunity costs you incur, that is when you choose one option you try to assess the costs of what you have foregone i.e. the benefits you will not realize for the options you have not chosen.  Because people are naturally afraid of making a wrong decision so you perceive more of the costs of your choice than the benefits, and you are less satisfied with the alternative that you have chosen.

The implications for the paradox of choice hold equally true for your customers, your suppliers, your employees and others as they do for you.  So if you want to avoid your customers suffering from “analysis paralysis”, and for them to value the benefits of what they choose to buy from you, there are two things to do:

  • Give them limited choices – rather than asking them to compare offerings with many features and attributes keep them focused on the key ones that are important to them.
  • Use three options – for some reason, people find it easier to choose when they have three options to select from.  Provide them with three distinct offerings, and make the similarities, overlap, and difference clear and relevant. Make it easy for them to decide.

The paradox of choice is part of who and what we are. Learn to work with it rather than to circumvent it.

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