Choice overload is all tied to the “paradox of choice,” which helped Barry Schwartz become famous. The basic idea: freedom of choice is a central tenet of Western societies, and yes, it has made us freer. But has it also paralyzed us and increased dissatisfaction as opposed to increasing happiness?
Think of this in terms of breakfast staples, i.e. milk or coffee. There are dozens of milk options (1 percent, 2 percent, skim, almond, soy, powdered, etc.) and even more coffee options. 40-50 years ago, there were significantly less. That’s progress, which is good — but it’s also a lot more to take into account when making even basic decisions.
How does a brand rise in the era of choice overload? Customer experience.
Choice overload and the job situation
Very briefly here. Regardless of your political leanings, read this article about Trump and the Rust Belt. It makes a couple of interesting points:
- Late 1800s: 80 percent of America employed in agriculture; now it’s 2 percent
- 1960: 40 percent of country employed in manufacturing; now it’s 5 percent
We still eat food and grow it — and we still make things. It’s just that the economy has become more effective (automated, etc.) at producing the things we make and eat, so we need less people. But … because it’s a capitalism, those people need to make money. The Gig Economy (which is very real) has been good for this in some ways. But there’s a problem.
Most companies are still assessed on growth. (That’s not yet the problem.) Usually the fastest path to growth, revenue, and more money is new products or services. But let’s say you make tables and decide to start making couches. There were already people making couches. You’ve entered a new vertical, but you’ve crowded the vertical. On the customer side, there’s now choice overload. So now what?
Choice overload: Stanford researchHere’s some research out of Stanford on choice overload. It’s tied to this paper on “assortment size.” The outcome of this research is pretty logical. They find that choice overload is contextually relevant to “decision-making stage” of the buyer journey. So if you’re at an early stage (not sure what to do yet), you like the choice overload. That makes you feel comfortable! If you’re at a specific stage (lower in funnel), you do not like the choice overload as much.
This is what led us to a world where so much of the focus is on customer experience. With 35+ options for something like a coffee filter, ultimately you choose the one that provides the best experience.
Choice overload: “Every decision is really two decisions”
Awesome quote from the Stanford research:
“Every decision is really two decisions,” Simonson says. “If your first decision is about whether you want to buy, then having more options is conducive to buying. But if your first decision is on which specific product to select, then having a big assortment can make it more difficult to identify the best option.”
Every decision is really two decisions. Companies need to keep that in mind when designing their customer experiences, which must be reliable. A good experience will consistently beat price and new flashy options. As more and more executives look for new revenue streams and enter new markets, customer experience will only continue to be the way around choice overload.