Consumer Marketing: We All Want Choices…or Do We?

Do You Know that offering too many choices can be bad for your brand and your bottom line?

Niche targeting has led to a whole plethora of choices for consumers as marketers try to provide just the right choice to reach each of the targeted segments. That sounds great, but have such efforts by marketers reached the point of diminishing returns?

So what does research say about the impact of choice on human behavior? Even more relevant is what does marketing research say about the influence of choices on sales?

We all want choices. Psychological research over the last forty or so years has established the correlation between providing choice and increases in intrinsic motivation, perceived control, task performance and satisfaction with life. One should note that the range of choices in these studies were limited, typically varying from two to six choices.

More recent research suggests that just the opposite is true when the number of choices is increased. There comes a point when the choices available to us become counterproductive. This downside of excessive choice has been demonstrated in a number of more recent studies. These studies have revealed three negative consequences of too many choices. They include:

Loss of Motivation to Take Action
Loss of Satisfaction with decision
Loss of Focus for subsequent Tasks

Less is More …Failure to Take Action: In a 2000 paper in the Journal of Personality and Social Psychology (JPSP, Vol. 79, No. 6), Professors Iyengar and Lepper and their team evaluated their postulated “choice overload” hypothesis with three different research studies.

One study illustrated that when shoppers were given the option of choosing between six and twenty-four assortments of jam, they showed more interest in the larger selection. However consumers initially exposed to limited choices proved considerably more likely to purchase the product than consumers who had initially encountered a much larger set of options. In fact they were ten times more likely to make a purchase! It would appear that having “too much” choice seems to have impeded their later motivation to buy.

Subsequent studies by them with higher stakes along with studies by others suggest that the provision of extensive choices does not necessarily lead to enhanced motivation when compared to contexts that offer a limited array of choices. Quite the opposite seems to be the case.

In a paper in the Journal of Consumer Research, Alexander Chernev found that when people were offered variants of the same brand of toothpaste--cavity-prevention, tartar-control and teeth-whitening types, for instance--they tended to switch to another brand that offered a single option.

There appears to be one exception to these studies. When they already know what they want, i.e. have a particular preference.

Loss of Satisfaction with Decision: In his 2004 book; The Paradox of Choice – Why More is Less, Barry Schwartz argues that limiting consumer choices can greatly reduce anxiety for shoppers. Having too many options can lead consumers to be more dissatisfied with the choices they end up making. People often experience regret or buyer’s remorse because they can’t help thinking that they made the wrong choice and might have ended up better if they had picked a different option. It becomes a source of pain, regret, worry about missed opportunities and unrealistically high expectations.

This phenomenon seems to occur even if the choice made was very good.
Loss of Focus: A number of studies from several universities have shown that people faced with numerous choices, whether good or bad, find it difficult to stay focused enough to complete projects, handle daily tasks or even take medicine. The research was designed to test how the previous act of choosing or not choosing affected peoples’ ability to stay on task and to maintain behaviors aimed at reaching a goal.

Dr. Vohs, a faculty member of the University of Minnesota’s marketing department and the study’s lead author concluded that making choices apparently depletes a precious resource within the human mind. Simply the act of choosing can cause mental fatigue. This pattern was found in the laboratory, classroom and shopping mall.

Researchers found that participants who earlier had made choices had more trouble staying focused and finishing disagreeable but goal focused tasks, solving simple arithmetic problems and spent more time engaged in distractions compared to participants who were not asked to make choices prior to that point.

Implications for Brands and Marketers

A consumer’s desire to purchase a product can be undermined by an extensive variety of options. Brands that streamline their products to create an endless array could actually be hurting their brand and bottom line. When Procter and Gamble decreased their versions of Head & Shoulders shampoo from 26 to 15, sales increased by 10%.

Too many choices can reduce sales. At the very least companies need to monitor sales carefully when changing the variety of consumer products they offer, especially if the changes are increasing the variety of a single product.

Choice is not a bad thing; a lack of available options or alternatives can also (paradoxically) impede an individual from making a decision.
Consumers need a balance between two few options and too many options
Marketing research methodologies need to incorporate psychology’s understanding of the way consumers make choices.
Companies need to utilize market research to understand their customers’ preferences for more or less choice.
A salesperson can mitigate the analysis paralysis often seen with lots of choices. A salesman that can limit choices is more likely to make the sale.
Expert organizations such as Consumer Reports can also help motivate consumers to take action with their recommendations which limit the choices consumers may need to make to two or three options.

Choice is important in brand development. However, too many choices end up being counterproductive. It holds true for the big stuff, e.g., product and brand. It also holds true for individual elements of the marketing campaign; including website, landing page or email design such as content, page elements and calls to action.