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How Marketing Leaders Can Overcome The Paradox of Choice

How Marketing Leaders Can Overcome The Paradox of Choice

Giving customers too much choice is just as problematic as not providing enough. 

If you’ve ever endlessly scrolled through reviews on TripAdvisor, clicked through pages of products on Amazon, or been overwhelmed by the product selection at Best Buy, you are familiar with the paradox of choice. In a book by the same name, American psychologist Barry Schwartz posited that too many choices create consumer anxiety. Instead of increasing customer happiness due to abundance, Schwartz said that too many options heighten expectations, create a fear of missing out (FOMO) (in this case, the anxiety of choosing an inferior option over a better one), and leave buyers unsatisfied. Even worse is the risk that buyers won’t make any choice at all. 

In follow-up experiments by multiple academics, reducing choice decreased buyer paralysis, leading to higher sales of new home designs, prescription drug plans, gourmet jams and more. In other studies, buyers fixated on the wrong features, leading to inconclusive results. Researchers and marketers have since realized that customers want a certain amount of choice to feel like they have options, but they need to be the right ones. “The trick is to find the middle ground — the “sweet spot” — that enables people to benefit from variety and not be paralyzed by it,” said Schwartz in a PBS NewsHour interview.

 5 Ways to Find The Choice Sweet Spot

Marketing leaders know that they need to offer customers enough focused choices to meet diverse needs and solve specific challenges, but not overwhelm them with endless (and perhaps unnecessary) product variety. Their decisions have implications for product development, e-commerce customization, personalization, and recommendations; partnerships; pricing; and more across a wide array of industries. We recommend that firms:  

1. Constantly focus on customers

Companies are increasingly developing personas, empathy maps, and experience journeys to understand what customers want, then using this information to design new products. It’s easy to lose sight of this mentality as products gain traction, which can lead to unnecessary product varieties or upgrades, causing products to bloat under their own weight. That’s why agile processes have teams stop product development the moment problems are solved to avoid adding unnecessary features customers haven’t asked for and don’t want. 

In his book, Originals, Adam Grant shares how Warby Parker rocketed from a seemingly quixotic idea to gain #1 market share by solving key pains for consumers – reducing the price of expensive glass purchases, selling only frames, and offering a try-before-you-buy service to reduce the sting of commitment. Many companies would benefit by providing simple education and fewer choices to help customers combat the uncertainty and terror they experience from making choices that affect their financial futures. For example, Gen Z and Millennial consumers who are looking for debt products to help pay for college, buy a house or car, or gain credit balk at seeing multiple product options rather than a simplified path to achieving their goals. Businesses would be well-served to be crystal clear on their business objectives, customer goals, and buying journey and help the customer understand how their product would help them, instead of inundating them with too many product options. 

It’s very important to understand who this audience is and how they consume. And the number one word is simplify. Simplify, simplify, simplify. You need to make it as easy to understand and comprehend to the consumer as possible.” Abha Bowers, Director of Strategy and Partnerships.

2. Co-create with customers

Companies are using design thinking, innovation labs, and advanced technology to study customers and co-create new solutions with them. With digital commerce, connected devices, and geo-marketing, co-creation can move into real time, enabling B2B and B2C companies to track customers closely. Obviously, this is a two-way street, but when companies give incredible value, customers welcome receiving a seamless experience and personalized offers.

Facebook offers both a positive and cautionary story in this regard. With Facebook and Instagram, the company provides tools that enable customers to create their own communities, engage with others on their own terms, and share stories about their daily lives. In this sense, consumers co-create the narrative of their lives. Yet Facebook then betrayed that trust by failing to keep users’ data secure, which enabled Cambridge Analytica to harvest that data and use it without their consent worldwide. Now consumers feel choice anxiety as they co-create their own narratives, knowing that their data is not secure. This anxiety of choice spills over into all online activity as consumers consider: Will my online behavior harm me in the future, with invasive targeting, unwanted ads, the widespread revelation of deeply personal information, or a media backlash after ill-considered comments or activity? If so, what should I do about it? Companies that co-create with their consumers need to understand that personal data is a gift, not an entitlement, and be worthy of the trust their customers place in them. Transparency policies that spell out what customers get (better personalization and recommendations) for their data are a good start, as long as they are clear and easy-to-understand. But companies also need to take the long view on these relationships, forming partnerships that offer real value to customers, rather than just incessantly monetizing their data.  By doing so, they will build customer trust, extend relationships, and avoid privacy and business backlashes. 

3. Use narrative storytelling

Companies have a story to tell, and they can use it to connect with customers. Startups often share their “origin story” to win venture capital and help develop a powerful brand. Sara Blakely used the story of her search for shapewear – pantyhose without feet – that smoothed her silhouette under pants to fuel her company’s narrative. Almost everyone knows that she sold fax machines, invested $5,000 to start her company, and cold-called Neiman Marcus to place her first order. Thus, when a consumer buys a Spanx garment, they aren’t just streamlining their physique, they are connecting deeply to Blakeley’s origin story and the challenge all women face of looking their best in form-fitting garments.

Similarly, higher education organizations and associations have a great story to tell about the why of their mission. It can be easy to pitch myriad membership options and benefits, but a simpler story that refocuses on the mission may connect better with alumni and donors.

These not-for-profits can use a strong viewpoint and laser-focus on their brand and emotional storytelling, such as the “power of one,” an alumni who overcame a challenge or benefitted from key services. They also can use a narrative arc with many chapters to promote the work to achieve a social-good mission, unfolding accomplishments towards achieving key goals over time. Or finally, they can develop online and offline affinity communities to create deeper relationships with donors to keep them interested and engaged in the organization’s work.  

4. Connect emotionally 

Digital marketing should be more like a courtship. Customers don’t just make choices based on options and features. They oftens start with asking, “How does it make me feel?” Brands that can connect with customers emotionally can help them avoid post-purchase remorse or the desire to reverse their decision when new options arise.

When Amazon started its Prime service in 2005, the program was viewed as high-risk. Staff feared high shipping costs and the organizational changes the program would create. Yet CEO Jeff Bezos instinctively knew that customers would love it and value the free returns, which mitigate the risk of purchasing goods online. “[E]ven for people who can afford second-day shipping, this feels sort of like an indulgent luxury,” Bezos said in an analyst call while debuting the service. Since then, of course, Prime has soared to more than 109 million users, created a cadre of buyers who spend 2X more than non-Prime users, and become the glue that links a wide array of services.

Company leaders should think: What is their Prime service, or pure expression of value that is deeply alluring to customers? If they can articulate that message and launch the service at scale, they can out-Amazon their competitors and extend their business into new areas.

5. Consider the whole journey 

Customers will grow and change, and companies need to change with them. Business leaders, especially marketers, firms must balance the need to be true to their north star, which is their organization’s purpose and values, while also extending their platform, products, and services to address new customer demographics, needs, and behaviors. For some companies, like REI and Tom’s, that will mean staying extremely focused on the mission, while other companies like Amazon, Apple, and Disney are creating a broad-based business platform that moves deeper and deeper into the user experience. 

“We help our clients think through message-market fit. The first thing you should be able to do when you go to a website, for example, is to immediately figure out what the company does and what the benefit is for me as the visitor to that site.” — Kurt Merriweather, VP of Strategy.

Don’t chase the crowd

Make sure you understand what makes sense for your  business. Solutions that apply to a competitor will not necessarily work for your business. The best solutions are presented in a way that is authentic to your brand personality and alleviates pain and anxiety for your customer while helping them pursue new opportunities.  

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