News

Author: Too Many Choices Paralyze Consumers

7/19/2006 5:51 AM Eastern

Boston -- Too many choices paralyze consumers, causing them either to reject a purchase or to seek out a competitor that offers a simpler option, according to Prof. Barry Schwartz, author of The Paradox of Choice.

Speaking on marketing in an era of too much choice, Schwartz said the challenge for marketers is less about providing information to consumers than it is selecting the appropriate information to make a choice simpler. As an example, he noted he no longer goes to a bookstore with thousands of choices, preferring instead to use an online retailer that will suggest eight additional titles for him, based on a recent purchase.

Given too many choices, consumers may make a selection but its often based on the wrong criteria, leading to long-term dissatisfaction. For instance, employees given a huge menu of 401K retirement savings options are likely to select a poorly performing, but safe, money market option. Other consumers may analyze all their options, and make a choice but still be dissatisfied, because it’s almost impossible to find a features set that is perfect, he said.

“The task is to find the ‘sweet spot,’” Schwartz said, that offering that offers just enough choice for the majority, without triggering paralysis.

Reactors on the CTAM Summit panel argued that cable is managing choice. Operators minimize choice at the point of sale, noted Page Thompson, senior VP and general manager of video services for Comcast. After the sale, the choices increase, in the form of video-on-demand content. Thompson said consumers see that choice as value added, citing consumer surveys that note an increase in satisfaction and lower churn among consumers with access to VOD.

“Our biggest problem was that customers wouldn’t believe it was free,” he said.

Ken Dice, executive vice president of U.S. networks for Discovery Communications Inc., joked that his company is “part of the problem,” with all its products and platforms. But, he added, Discovery “leans back on the brand,” positioned as the trusted expert that consumers seek when making choices.

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