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Many marketers believe that innovation and competitive differentiation arise from giving customers more choices and options. But through the strategy of "offering more choice", marketers may actually end up increasing complexity, costs and causing customers "mental fatigue." Is there a better way to win over customers?

A typical big box retailer carries 50,000+ stock keeping units (SKUs). Retirement plans carry hundreds if not thousands of investment options. A website designer offers customers 216 color palette options for a home-page. With customers drowning in "choice" some companies are finding it easier to meet customer needs by simplifying–portfolios, products and services.

Case in point, the Wall Street Journal published an article, "Ford Eyes More Cuts as Recovery Advances", April 23, 2007, detailing some of the decisions that Ford Motor Company has made to return to profitability. One of those strategic decisions was to reduce the "mind-boggling level of vehicle customization, which jacked up costs."

For example, Allan Mulally, CEO of Ford joked that until recently, the Lincoln Navigator offered 128 options on its console alone. "You know what 128-factorial is -- it's a lot of combinations," he said. The article points out the real answer: 3.85620482 x 10 to the 215th power.

Ford is finding cost savings and efficiencies in getting back to basics, streamlining operations, and reducing the complexities of the products they offer customers. Indeed too many choices can cause our customers to experience anxiety and mental exhaustion.

According to the April 2007 issue of Journal of Personality and Social Psychology, people have difficulty staying focused enough to complete projects when presented with too many choices.
Researchers conducted seven experiments involving 328 participants and 58 consumers at a shopping mall.

One group of participants was asked to consider a multitude of options (which products to buy, what classes and coursework to take etc) and then actually make decisions. The other group was allowed to consider options but wasn't instructed to actually make a choice. Both groups were then asked to do various tasks. The group involved in decision making (choosing from the options) had difficulty staying "on task and maintaining behaviors aimed at reaching a goal."

According to the research, mental fatigue results from not merely considering a set of options, but in actually prioritizing and choosing among the options.

Intrinsically this makes sense. Suppose you asked me to list, off the top of my head, ten cars that I'd like to purchase assuming I had the means to do so. Not only could I come up with ten, I bet I could rattle off twenty!

However, suppose you said to me, "Now of those ten cars, I'm going to give you one, so you need to choose." Suddenly I really have to think. What brand, what options do I want in the car, seat color, interior color, leather or cloth, V6 or V4, two or four door etc? My brain really has to start working!

Kathleen D. Vohls, the study's lead author concluded that making choices depletes a precious resource in the human mind and causes mental exhaustion. "There is a significant shift in the mental programming that is made at the time of choosing," she says. "Simply the act of choosing can cause mental fatigue."
So it's not just the pondering of choices, it's the actual prioritizing and choosing that mentally wears us down.

We live in an era of plenty. Starbucks, for example, says they have 87,000 different ways to get you a drink.

As marketers, we need to help our companies focus and prioritize on the things that matter most to our customers.

Since marketing is responsible for the "voice of the customer", we must help steer R&D, product management, finance, operations and other corporate functions towards adding (or subtracting) features/functionality from our products and services that will actually make a competitive difference.

Sometimes, less is more –especially when it comes to "choice".
What do you think?

* Is "more choice" a good thing?
* Have you found yourself overwhelmed by not only considering too many options, but then having to "choose"?
* Your competitors are surely giving customers "more choice", should you follow suit, or is there something to this research?

Continue reading "When Less is More in Consumer Choice" ... Read the full article

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Paul Barsch directs services marketing programs for Teradata, the world's largest data warehousing and analytics company. Previously, Paul was marketing director for HP Enterprise Services $1.3 billion healthcare industry and a senior marketing manager at global consultancy, BearingPoint. Paul is a senior contributor to MarketingProfs, a frequent columnist for MarketingProfs DailyFix, and has published over fifteen articles in marketing, management, technology and healthcare publications. Paul earned his Bachelors of Science in Business Administration from California Polytechnic State University, San Luis Obispo. He and his family reside in San Diego, CA.