Spoiled for choice

Jun 01, 2006 9:30 PM  By

Barry Schwartz admitted that he’s not a direct marketer. But in his May 10 keynote address, Schwartz, a psychology professor at Swarthmore College and author of the 2005 book The Paradox of Choice, set out to help marketers better understand why sometimes more is less.

Referencing his book and a handful of topical cartoons, Schwartz showed attendees how business, economics, and psychology intersect and why companies need to better understand their customers and how they respond to having a plethora of choice.

Although most Americans equate freedom with freedom of choice, Schwartz said, statistics show that too many choices can lead to indecisiveness, which in turn leads to a lower number of overall purchases. “Satisfaction is not always directly associated with a person’s number of options or choices,” he said.

Schwartz cited an example involving consumer purchases of jam. When 24 flavors were offered, the selection attracted more shoppers than when just six flavors of jam were offered. But 10 times more consumers actually made a purchase when faced with only six choices than did those given 24 choices.

Not knowing what to buy as a result of too many choices can lead to a type of “paralysis” from a buying standpoint. “In every domain of life today, the world has exploded into an array of consequential choices,” Schwartz said. “There comes a point when a person has to say, ‘This is simply more choices than I need.’”

What’s more, a surplus of choices can lead to an escalation of consumer expectations. “If you’re an apparel merchant and you offer your customers 200 different styles of blue jeans,” Schwartz said, “that automatically creates high expectations” that you may be unable to meet. “After all…one of those styles should be the right one. Right?”

Schwartz said it’s critical that you don’t allow choice to exceed expectation. “In choice-laden America, we’ve decided that a life without choices would be infinitely bad,” he said. “But along with those choices there is a diminishing marginal utility.” The relationship between choice and satisfaction is not an even trade-off, and sometimes too many choices can damage your overall effectiveness as a merchant.