The Paradox of Choice

This topic was inspired by a discussion we had in Professor Ken Wong's class on March 26th, 2009.

As marketers we are always pushed to offer more and more, hoping that one of the myriads of product variations will satisfy each customer.

As an advocate of simplicity, I will highlight why giving too much choice can hurt a company:

  1. Post Purchase Reinforcement -- most of us will go out there after buying a product and find others who bought the same one to reassure ourselves in our decision. The more choice is offered the harder for a consumer to do so and hence the harder it is to keep him happy. That's the big issue telecommunication companies are facing today in Canada!

  2. It's expensive to offer a lot of choice (inventory, R&D, employee training)

Therefore the best solution is to build businesses that only serve very niche demands and in turn offer no choice to their clients... just what they came in for. That creates happy customers through post purchase reinformcent and drastically reduces those expensive costs associated with offereing choice.


Kyle Studstill said...

Barry Scwartz's book of the same title is an outstanding read if you haven't come across it already.

Or check out the TED video, a lot of the good stuff is condensed, but worth a quick watch:

Daniel Oyston said...

I like the link to the post-purchase evaluation phase. I think you can push it further up the hierarchy of the buyer-decision making process and say that too much choice makes it had for the buyer to evaluate the choices and in turn actually make one.