Barry Schwartz is an American psychologist and professor of social theory. Consumers say they want lots of choice but Barry Schwartz knows that in practice this only confuses them. This realisation came after he set up a test in a food store. On one occasion he offered six jams for sale and, on another he offered 24 different jams. He found that when people were exposed to just six jams, 30% bought some. When people were exposed to 24 jams, only 3% bought some. He published his thesis in a book called the Paradox Of Choice in 2004.
It seems that we have been slow to learn on this subject. In 1974 Robert Settle and Linda Golden wrote a paper in Advances in Consumer Research entitled Consumer Perceptions: Overchoice In The Market Place. It was 30 years before Barry Schwartz. Settle and Golden were of the same opinion. They interviewed 174 people to find out how many choices of products they thought they wanted against the ideal number. They studied all sorts of products from laundry detergents and baked beans through to margarine and frozen strawberries. In every case they found that consumers thought they wanted lots of choice when in fact the ideal number was much lower. For example, subjects who were interviewed thought they needed 21 different types and sizes of margarine when in fact the ideal number was five.
Here's the thing – too many options mean there is too much to take in. So much so, it makes it more difficult to make a choice and therefore leaves the customer less satisfied. It might seem that a manufacturer of dental floss is doing the right thing by pandering to the needs of somebody who wants bacon or cupcake flavoured versions (we’re not kidding) when such exotica only cause anxiety to the 90% who simply want a traditional classic brand.
It is claimed that even expert jugglers find it difficult to juggle more than seven balls at once. This is an important number to keep in mind. If we have more than seven choices of a product, the mind has to juggle and it struggles to work out which it should choose. Of course, if the customer has a favourite brand they home in on it and ignore the "noise" of the surrounding plethora. When everything looks very much the same, things get difficult for the customer. Faced with lots to choose from there is a danger that the customer will make a panicked decision which they regret later. It seems that people are more satisfied with their choice when they are not overloaded with options. When people are confronted with too many choices they may opt to not choose anything fearing that whatever they do will be wrong.
Tesla seem to have got it right. If you are buying a Model 3 you can choose between four battery options which range from standard to performance, nine paint finishes and a couple of interior options. That’s it. No wonder it only takes them 10 hours to produce one of their cars whereas it takes Vokswagen 30 hours to make the ID 3.
So here are three points to think about to improve customer satisfaction and at the same time improve profitability:
1. Narrow the range of products on offer. Five variants within a range is ideal.
2. Make sure that the options meet the majority of customers wants and needs (mint flavoured floss trumps bacon flavoured floss).
3. Present the options in a clear and simple way that leaves the customer into a natural choice.