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Monday, January 15, 2007

The Problem With Too Many Choices - And The Opportunity.

Too many choices! - view LARGE originally uploaded by Luv 2 Flickr.
My previous post - Are There Too Many Choices? - touches on two points: too many choices represent a problem, yet they're also an opportunity -- especially for marketers and retailers.

Mark Hurst at Good Experience Blog posted Interview: Barry Schwartz, author, "The Paradox of Choice" on 1/20/2005 which offers additional perspective on Barry Schwartz and The Paradox of Choice: Why More Is Less. [Coincidentally, Maria Palma at Customers Are Always featured Mark Hurst in A Great Resource - Good Experience the same day I discovered him!]

This paradox of choice is particularly relevant in affluent societies where choices abound regardless of the category. Indeed, we are either paralyzed with indecision or, if we make a decision, we worry that we made the wrong choice given so many possibly better alternatives. Every decision, then, carries heavy opportunity costs.

As it relates to retail, Schwartz says the following: "If you provide sales options in a retail store or website, you might think the way to attract people is to provide as many alternatives as possible. But that's wrong. You'll attract people, but they won't buy as much as they would with fewer choices."

"A store then should be designed in such a way as to "restrict options" - though in what way depends on what you're selling." Schwartz suggests somewhere in the realm of 6 to 12 options, offering, as example, boutique stores that edit selection to "sell a certain aesthetic." Only a few products are showcased in the store, and other inventory options are available online or via special order -- without overwhelming the consumer. "First you've been seduced into wanting a couch by what appears to be the simplicity of the decision. That's the right way to design things in the modern world, where everything is too complex. " [By the way, in referring to seduction, doesn't Schwartz sound a lot like Paco Underhill?]

Schwartz offers the following suggestions to avoid the paradox of choice:
- satisfice [i.e., become satisfied with 'good enough' choices]
- learn when to choose [i.e., definitely listen to a friend's recommendations]
- don't worry about other people [David Wolfe author of Ageless Marketing explains that as people reach 40+ and Maslow's 5th level [i.e., self-actualization] in the hierarchy of needs, they care less about what others think of them and become more comfortable with themselves, as well as more practical, authentic and intuitive. A possible extrapolation from this is that as the population ages, we will be better able to deal with the paradox of choice....]
- limit the number of options to consider

As it relates to web vs. physical retail stores and Barry Schwartz, Sara Cantor from The Curious Shopper shares these insights in Stores will never die: shopping online is more about self-directed, self-edited choices whereas retail stores are particularly valuable for retail-edited searches when we aren't as self-directed.

Susan Abbott from Customer Experience Crossroads in Trendwatching: Managing the Infoglut and the Info-guilt explains that the marketer's role is to help with the infoglut. She says: "If you are a marketer, you will need to rise above this noise. You need to help people through the info-glut, not add to it. If you have a service that helps people stay on top of information or manage it more effectively, your future is bright. And watch how much choice you throw at people. It's a short trip from 'having options' to 'drowning in options'. Even better, give them only the best choices, and make it easy to be smart."

She talks about the value of advisors in helping consumers work through choices and listen to what she says about brands! "Well, brands are advisors.... We expect our favorite brands to do quite a bit of filtering for us, and only offer up choices that fit the core values of the brand." What an opportunity!

Valeria Maltoni from Conversation Agent shares these comments to Are There Too Many Choices?: "We as marketers, writers, bloggers, etc. have a moral (ethical) responsibility to filter the information so that when something is presented to the end customer/user it has been considered and transformed by it passing through our thought process (skill, talent, training, etc. play here). So, yes, providing a suggested way to navigate your store, book, body of work, interpretation is the reason why they're paying you (even attention is a form of payment) and you're serving them (customer, readers, etc.). The exchange then becomes valuable beyond experience to meaning."

The most recent Barry Schwartz citing comes from Liz Danzico at Boxes and Arrows in The Line Between Clarity and Chaos. An Interview with Barry Schwartz from 1/2/07. Indeed, all of our choices easily go from being positive to becoming problematic. [We've all experienced it. We walk purposefully into a store with one thought in mind. Faced with the dizzying array of options, we become paralyzed. Our minds go blank and we can't remember what our most basic criteria were. We simply walk out.]

Or, we manage to overcome the paralysis, but adopt a suboptimal strategy to simplify the decision process. The decision ends up being disastrous. Or at least, bad. [Schwartz uses as an example speed dating.]

Or, we make a decision, and a pretty good one at that, but we wind up dissatisfied because we worry that another might have been better.

It's a no-win situation, particularly for those intent on maximizing - or seeking and willing to accept ONLY THE BEST! Unless, one consciously adopts the suggestions Schwartz makes above.

[From a marketing to women perspective, Marti Barletta author of Marketing to Women: How to Understand, Reach, and Increase Your Share of the World's Largest Market Segment in describing how women make decisions certainly brings to mind "maximizing". Since women represent the majority of our most critical customers, what a terrific opportunity we have as marketers and retailers to provide value!]

Liz refers to this 4/27/06 Google TechTalk presentation where Barry Schwartz describes in greater detail the problem with choices: regret and anticipation of regret; opportunity costs, escalation of expecations and self-blame. Too many choices exacerbates maximizing vs. satisficing. It also leads to no choices!

Choice is both good and bad: good things satiate; bad feelings escalate. Did you realize that the context in which we make a decision stays with us as we experience the product? It colors our experience. I hadn't really thought about it, but now recognize the feeling.

With so many choices to make, consider this opportunity: the 'principle-agent' concept prevents us from regretting decisions because the agent filters the choices for us and separates the choice from the experience, thereby increasing satisfaction. Think: financial advisors, recommendations from friends and family [i.e., word of mouth recommendations], real estate brokers, retailers, brands, ..... All resources that help organize choices.

He shares these retail examples: Costco offers a limited selection, good price, and lots of surprises; Trader Joe's, Tesco, Aldi and those NYC Greek Diners which offer 1000 page menus [i.e., they present a problem]! Yet, in the front page, they offer a solution [to the problem THEY created] via 'today's specials' [4-5 items, highest margin, and they're the same every day]! [To better appreciate Costco, read Sara Cantor's Come For Deals. Stay For Treasure.]

If as marketers and retailers, we simply create a laundry list of options and expect our customers to do their own sifting, then shame on us as Valeria and Susan say. But, if we use our brand, knowledge, reputation, expertise and passion to organize all of that material, edit and make sense of it all, then we will earn our customers' eternal gratitude and loyalty. And, our brands will truly be adding value to our customers. That is the powerful opportunity associated with too many choices!

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