By Vejay Anand
On a few occasions, less is more. When offered too many options, there is a chance, customers’ satisfaction may decrease. According to this logic, a company should offer its clients as many options as possible. In theory, having a lot of options is excellent, but in practice, it could be overwhelming. Whilst it’s widely accepted that there just never will be too many options, research has proven that this can actually cause paralysis.
Barry Schwartz, a psychologist, disputes the notion that possessing a greater number of choices contributes to more freedom and happiness in his book The Paradox of Choice: Why More Is Less. He argues that bringing too many choices may result in tension, anxiety, stress, nervousness, and, indecision, and even a state of dismay and despair.
What Does Research Reports Say?
Mark Lepper, a social psychology professor at Stanford University, and Sheena Iyengar, a psychologist at Columbia University and the author of The Art of Choosing support Schwartz’s findings. Many consider the pair’s study, The Jam Study, as one of the most important explorations into consumer psychology. It was found that confining consumer substitutes boosted revenue. When the number of choices decreased from twenty-four to six, jam sales grew by a factor of 10. The more substantial display attracted 60% of buyers, but only 3% of those who visited ended up picking up it after smelling an average of two jams. Customers were more likely to spend money on jams if they were samples (30%) from the smaller variety.
The Jam Study has been replicated in research in a variety of industries, including finance, chocolate, speed dating, and essay writing. Overall, when participants had fewer options to choose from, they were happier with their choices (or, in the case of the essays, produced higher-quality results). Decision fatigue may result from having too many options, a condition known as choice overload or choice paralysis, which can increase worry over making the wrong decision and, in severe situations, guilt and humiliation. By reducing it, you’ll experience relief as opposed to disappointment or Fear of missing out (FOMO).
Although having options is useful, there is more to a connection between having options as well as feeling content than we originally thought. At first, having more options makes human beings happier, but through time, the advantages start to cancel each other out due to the law of declining marginal utility. Additionally, a different impact of decision hasn’t received much attention from psychologists and business experts. A greater quantity of it takes more of your time and effort, and if the outcomes are less than ideal, it could result in mental health emotions like stress, regret, sorrow, guilt, irrational expectations, shame, humiliation and disgrace. When there are few options available, these costs are minimal, but as more options become available, their magnitude grows dramatically. As time passes, it seems that every option puts us in a worse situation than when we started.
If you look at the above from an entrepreneurial stand-point, it is clear as entrepreneurs, they have an overwhelming number of decisions to make and should consider the one best suiting their organisation’s vision and mission. Whether the business is a start-up, or an established one, there are three main questions that every businessperson should cross. While this may not offer an instant solution, it will help the owners to ask correct questions, at the correct time.
It also applies to how you advertise your brand. The final decision is compromised when there are far too numerous considerations that might have an influence. And, in this case, the statement of purpose devolves into a confused list of extras that lack focus and are inconsistent with the company’s primary goals. The path leading to the dreaded “all things to all people” positioning is as follows: An embarrassment of resources can result from brand positioning such as “My business does A, B, and C, and we even experiment in D,” nevertheless it ends saying very little.
Additionally, industrialists and business executives may come across the following questions.
- To what extent can I embrace the risk and challenge?
- How will my strategy work?
- Is my strategy correct and defined?
- Will my strategy sustain the market scenario?
- Will I be able to execute my strategy well?
- Will my strategy bring good profits?
- Does my business have the right tools and professional relationships?
It is, however, possible to have too many options, but it does not always occur. That doesn’t mean there isn’t evidence to support the occurrence, and it does not suggest we should ignore the insights, as some publications have argued. Like always, the key is to strike a balance. Schwartz referred to this as the “sweet spot,” that enables people to make benefit from an extensive range without being taken in by it.
Long story short, entrepreneurial management is as essential as personal and personnel management. The idea of “consumer agency” is no longer an adequate argument for an advertising strategy. More may not always be better for the store or the consumer in general. Determining and finding a suitable proportion of variation is a difficult empirical challenge. However, companies that find their niche are going to benefit immensely.
In a nutshell, there is much more to be learned about the science of choice. For the time being, try to fully understand your customers and see what kind of decision-making is most appropriate for them.
The author is CEO at Ironhill India