Earlier this year I was in the market for a new pair of glasses. I needed frames that were affordable, comfortable and would make me look good (no snickering please).
I visited store after store, checking out dozens of selections at each store, only to return home with nothing. I even took selfies of me wearing various glasses so I could later show my family and get their input. The experience was maddening! I felt like poor Vladimir, the Russian in America shopping for coffee in Moscow on the Hudson (check out the short clip).
I too was paralyzed by the dizzying number of choices, but eventually, fatigue set in and I made my selection.
Did I feel good about my final decision? Yes and no. I am happy with the pair I selected, but I have a nagging feeling that a more perfect pair exists and so I have a bit of FOMO (fear of missing out) because I didn’t try on every pair of frames in the known universe.
More choice = more happiness?
It seems to be a given that more choice means more freedom and therefore is better for the individual. But is that true? The fields of Psychology and Behavioral Economics have some fascinating insight.
Studies on the “Choice Overload Hypothesis” show that once a certain threshold is reached, increasing options can lead to inaction. For example, a study of employer retirement plans found that once a certain threshold of number of choices is offered, adding more options results in fewer employees choosing to participate in any of the plans.
Another study showed that although consumers say they want more choices, such as with flavors of jam or cereal, when given more options to choose from they more frequently end up not making a purchase at all than if there are fewer choices (again, up to a minimum threshold).
Yes, having some options is good and helpful, but when there are too many choices the law of diminishing returns kicks in and begins causing issues for us. This is the Excess Choice Effect (ECE) in action.
This explains why when my friends and I play strategy board games we encounter “analysis paralysis.” The player struggles to decide what move to make next when there are a plethora of options and consequences, and then he often ends up unhappy with his decision. (That’s why you probably don't want to play games with us - games that should take 45 minutes to play can take us over 2 hours!)
So besides paralysis, excessive choice can also cause dissatisfaction.
The Guru of choice
Psychologist Barry Schwartz is the author of The Paradox of Choice, in which he examines the effects of increasing choice on our happiness and well-being.
He gives several negative effects and reasons:
- Regret – if our selection is not 100% perfect, we have the feeling that we could have chosen better from among all those options
- Anticipated regret – we decide not to make a choice at all because we want to avoid the regret we will feel if we don’t make the optimal choice
- Missed opportunities – when you can only choose one option, such as with high impact decisions, you know that you have to forego all of the other options, some of which may be very desirable. For example, choosing a career path can be paralyzing because we know we are closing the door on all of the other possibilities (at least for a while).
- Escalation of expectations – more choice creates higher expectations of great results, which lowers overall happiness with our decision.
What can we do?
Schwartz recommends self-limiting the number of options available to us. Try this: on your next large purchase, set a limit (e.g., 2 or 3) on the number of stores you will allow yourself to visit. It may be difficult to resist checking out the other possibilities, but it will save you time and cause you less dissatisfaction with your purchase.
Another method is to have someone else limit your choices. When deciding to paint a room, my wife and I have a process for choosing the color. One of us goes to the store and selects a handful of colors and the other person gets to pick from among those colors. It makes it easier on both of us.
What can your business do?
If your business sells products or services, consider limiting the number of options you offer. Test to find the “sweet spot,” the number of options that produces the highest return. Schwartz cites stores such as Trader Joe’s, Costco and In and Out Burger as great examples of businesses who have found success by limiting the number of options in their offerings.
Remember, a confused buyer is a non-buyer and too many options can lead to confusion.
Think well and be well.