Too much customer choice is sometimes too much.

For those interested in a brief interlude into marketing science….

Earlier this week professor Dillip Soman gave a lecture on the topic of his research “overchoice”. His findings, briefly: too much consumer choice can often be a bad thing. Too much product selection can result in purchasing behaviour that is suboptimal (from both the perspective of buyer and seller).

Here’s some quick notes from the evening’s presentation…

For the customer, too much selection can result in increased cognitive load, reduced buying confidence and greater purchase regret. These effects have been shown to both reduce the chance of purchase and damage brand perception.

Furthermore, In response to overchoice customers often fall back to default behaviour. Data shows that every time snapple introduces a new set of flavours, sales of *regular* snapple go up and many other examples. Like cholesterol though, some types of choice are healthier for you than others.

What turns out to be an important distinction are “alinged” vs “non-aligned” choices.

good choice: like size, quantity, speed vs price. Customers are okay with trading off attributes that are directly comparable eg. “aligned”

bad choices: Things that are difficult to compare “non-aligned” such as choosing between models with tradeoffs of many differing attributes. Understandably, when you make it hard for customers to choose, they become stressed.

In almost every category 3-5 is found to be near the optimal maximum number of non-aligned choices. If you need to offer more selection than this better to offer cascading options rather than “chinese menu” style 150 choices at once which will overwhelm your customers only ever ordering the same 4 things hot and sour soup, kung pow chicken etc.

Implications: In packaged goods for instance, competition can lead to “selection wars” as competing brands try to crowd out shelf space by offering more varieties – to their mutual detriment. This is a prisoner’s dilemma type game -or like a price war- where value is fought and lost through overchoice rather than pricing.

Read more, abstract (free) and full copy (not free) of the paper available here