Choice Overload

 


There are so many behavioral economics principles, it took me two days to decide which one to present today! Let’s see what Choice Overload is...shall we? 

Hi everyone, I am Prashant Kulkarni and welcome to my channel on Behavioral economics. I take one principle every week and discuss it in detail and how it is applicable for today’s product strategy and design. 

I stayed at the Caesar Hotel in central london few years back. I still remember the breakfast there, especially for one reason. Cheese buffet. The breakfast used to have almost 50 plus types of cheese and for the first couple of days I remember ending up spending too much time deciding which cheese to eat for breakfast. After a couple of days, I simply decided on one type of cheese and ate it for the rest of my stay for breakfast. 

Another example of confusion while making choices - Netflix. I simply stopped watching Netflix because every time I open it  I simply can’t decide what to watch! Far too many choices.  But there is nothing wrong with the Netflix, it’s the modern times which gives us far too many choices and cripples our decision making ability. Far too many channels and you still can’t decide which channel to watch. We used to have one channel when I was young, Doordarshan and we used to enjoy watching it and I can confidently say we were quite happy. 

The same thing happened when I had gone to Toy”R”us, New York. I simply couldn’t decide which toy to buy for my son. Apart from too many choices, another factor made it even worse - Price. After looking at my condition, my friend made it simpler for me. He made a decision on my behalf and bought a toy. There are too many theories why Toys R Us went bankrupt. Is the choice overload a culprit? I don’t know but I think I just initiated another conspiracy theory! 

Btw, what happened to me has also happened to you? Well, you may or may not admit it, but in various degrees it happens to everyone. 

All these are examples of what’s called - Choice Overload or Paradox of choice. This is what happens when you have too many choices in front of you and having to choose from these options puts a damper on your experience. 

These kinds of scenarios are taking place especially in the modern times as products and services are trying to target specific tastes of people in order to make them happy. Actually, research has  found out that giving your customer too many choices won’t make them happier. In fact, it may hamper your business adversely. Let’s see how...

When we give too many options to our customers, one of these three things surely happens to customers - 

Sense of Regret - When there are higher choices, they end up with more regret after making a decision as they keep comparing their choices made with previously available options. This is also called buyer remorse. This may also lead customers to denounce the product or service at the later stage. 

Disappointment - When customers have higher choices they have higher expectations which also means it is easier to get disappointed. Constant comparison against their expectations disappoints them. 

No decision - When we have more choices, due to over analysis and over thinking, no decision is made. This can lead to decreased user engagement and fewer sales. 

When Proctor and Gamble went from 26 different kinds of Heads & shoulders products to just 15, they saw an increase in sales by 10 percent. 


But the good news is that we as product strategists and designers can make a huge difference. I am going to give you 10 commandments to help your customers make the right decisions. Just kidding..These are just guidelines. 


  1. Reduce choices  - You heard me right! Reduce the number of choices users have to make. Less is more. As you reduce the number of products and choices for customers, magically you will see an increase in sales. Costs would be obviously lower as choosing experience is much better.

  2. Remove redundancies - Evaluate your products or services and find out areas of overlap. Get rid of products which add no extra value. Identify how they are different from one another. If you can’t tell that, neither can your customers. 

  3. Educate customers - Help your customers to not just make the decision but also make the right decision. Make them understand the consequences of choosing each choice. 

  4. Categorize products - Categorize and group products in meaningful ways so that users can reach the products they are looking for more easily. There are many categorization schemes such as - by type, value proposition, utility, etc. 

  5. Condition for complexity -  Increase the complexity gradually. For example, if you are designing a complex enterprise application form, start with easy and simple options in your Wizard and gradually increase the complexity. This way users learn how to make choices. This also engages and motivates them to complete the task.

  6. Show top performers - Highlight top performing products and services. Customers are more likely to buy something that is also preferred by other people. 

  7. Recommend products - Tell them what you recommend based on customers' buying patterns.  This can help make decisions faster. - Amazon’s section of “recommended for you” helps 

  8. Compare products - Let your customers compare different products in comparison tables. This can help people make informed decisions. 

  9. Mark your choice - Mark your choice and show it at the prominent place. When you are selling a product, customers have certain faith in you and consider you an expert. Telling them what is your choice, only helps them make theirs. - Amazon choice is a perfect example of this. 

  10. Provide Filters - Provide filters to narrow down from 100’s of products to just a few based on criteria that makes sense to customers. 


Our goal should be to help our customers make quick and right decisions for themselves. If you can achieve that, they will do business with you. If not, they will simply opt out without telling you the reason. 


This is even applicable to features in your digital products. Do not be mistaken that more features mean more user satisfaction. These are completely different and unrelated things. 

Too many features does not mean your application is going to be successful. Make sure to have few few but extremely useful features. Just a trivia question - From all the hundreds of features of PayTM, how many do you really use? 


I hope you liked my explanation on the Choice Overload principle of behavioral economics. if yes, please press the Like button. Also subscribe to my channel and press the notification bell so that you will always get to know when I upload a video. 

Design for choosing right! 

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