A No-Nonsense Marketing Smart Tip September 27, 2006
Choice is good and more choice is even better, right? It’s one of the founding principles of satellite radio and HD radio. And it’s wrong.
Some choice is better than none, says Barry Schwartz, a Professor in the Psychology Department at Swarthmore College and the author of an incredible book called The Paradox of Choice: Why More is Less. But it does not follow that more choice is better than some choice.
Listen to the full 15-minute audio interview and gain an all-new perspective on what “variety” really means to consumers – and what it should mean to you.
[Here is just a partial transcript]
What is “The Paradox of Choice”?
We tend to believe that choice is good. The more choice people have, the more freedom they have. And the more freedom they have, the better off they are. So it must be that the more choice they have, the better off they are. And this seems so obvious, that it wouldn’t occur to anyone to question it.
The problem is that all of this research was done in a world where choice was limited. So the question was: Are you better off two options or one option? And the answer was always two options.
But now, we’re talking about 300, 3,000, or 30,000 options. Suddenly there are so many options that people, instead of being liberated by choice, become paralyzed. They don’t choose. It’s too hard to know which thing to choose, or they choose badly. Or, they manage somehow to choose well, but they’re convinced they could’ve chosen better, so they’re not satisfied with what they’ve chosen. So that’s the paradox. Choice should be liberating us, and instead it’s paralyzing us.
So what is the effect of all that choice on people who are trying to make those choices?
There are three different effects.
One is paralysis, and this of course interests marketers a great deal. You go into a store. There are a million options and you end up buying none.
The second problem is you may overcome paralysis, but you end up choosing badly. Faced with an overwhelming array of options and features consumers are forced to simplify and choose based on brand or on price.
The third problem: If you overcome paralysis and if you choose well, you bring the item home and you’re convinced that you could’ve chosen better. You’re just sure you could’ve done better, and the result is that you’re dissatisfied even with good choices.
So paralysis, bad decisions, and dissatisfaction with good decision; these are the three different affects of overwhelming people with too many options.
You’re talking about products or services for which money has to be traded for those products and services. But satellite radio has 150 choices and terrestrial radio has 30 to 40 in an average market. A mistake is cost-free and one button away from being repaired.
But you’re still paying. Instead of paying with money, you’re paying with time, which is even more precious than money for most of us.
So, for example, you can’t even enjoy the Beatles singing Abbey Road because you’re sure that there’s another song playing somewhere out there that you’re going to like even more. And when there are only five stations for you to check out, you can barely do it. But when there are 50 stations, you spend all of our time surfing and none of your time consuming.
So relative to radio, the more choices you have, the more surfing you do. Now, does more surfing mean you’re more or less satisfied with what you’re listening to?
I think you’re going to be less satisfied because you’re not really consuming. You’re spending all your time trying to decide what to consume and you miss half the song.
Based on my research good enough is virtually always good enough; it almost never makes sense to look for the best. It’s often a fool’s errand. Realize that the only way to know that you’ve got the best is if you’ve examined all the possibilities. How do you know you’re listening to the best song unless you’ve checked out every damn station? So it’s just not possible.
How much is too much for radio? I would guess from my research that the “sweet spot” is dozens of options. That’s the ballpark you want to be operating in: A two-digit ballpark.
What does this suggest for Internet radio with its dizzying variety? And for satellite radio with 150 unique channels? And for HD radio, which is all about magnifying the number of choices two and three-fold?
I think it’s a recipe for disaster for consumers unless you find a way to filter the options. Think about Amazon. Amazon is, “The largest bookstore” with two million titles. But what makes Amazon spectacular is that it has everything for people who know what they want, and it’s got this great algorithm for filtering what else it has to make sensible suggestions.
So you’d have to organize your radio options in a way that makes it possible for people to navigate so they’re not looking at thousands of choices. A lot of thought has to go into how the options are organized and presented to people.
It’s not that all choice is bad. It’s that most of it should be hidden from you.