Emotional or rational, choice has never been so expensive

It’s been a buzzword for decades, but ‘choice’ doesn’t always benefit the consumer – marketers must work harder to offer true value to shoppers

When Barry Schwartz, professor of social action at Swarthmore College in the US and author of the book The Paradox of Choice, went shopping for jeans one day he was astonished to find himself back home without a purchase. No, the shop assistant hadn’t been rude. In fact, she had been very attentive. What did he want, she asked? Slim fit or easy fit? Relaxed fit, baggy or extra baggy? Button fly or zipper fly? Faded or regular? As a not-so-trendy middle-aged man, Schwartz was floored. But as a psychologist he was fascinated.

We all know choice is a wonderful thing. It helps shoppers get what they want, and the exercise of choice sends powerful market signals to suppliers. People who can make choices feel empowered, whereas those who are denied the chance of influencing outcomes by the choices they make fall into a listless state of depression psychologists call “learned helplessness”. Your choices also help to define who you are, so they become intimately bound up with self-expression and identity. And that’s not counting the political dimension: in Western democracies we associate choice with freedom and liberty.

But what intrigued Schwartz were the costs of choice. Here he was, confronted with apparently boundless choice, and he ended up walking out of that shop with nothing. Delving a little deeper, he discovered this is a common phenomenon. If you put two stalls out in a market, one dripping with all manner of options, the other with just a few, people will flock to the treasure trove. But by the end of the day, the stall with fewer options will have sold more. That’s because if we are faced with too many options, at some stage it all gets too much and we decide not to bother.

Schwartz realised another thing. These costs are not only rational and operational – the cost of finding and sifting relevant information, for example – they’re also emotional. And the closer you look at them, the larger they loom.

The emotional downsides of choice include: decision regret (buying something only to realise with a sinking feeling that we have made the wrong choice); anticipation regret (fretting about making a choice because we fear the regret we will feel if we make the wrong choice) and opportunity regret. Choice is all about options, but the more options we have, the more opportunities we become aware of. And we begin to regret that we can’t have them all, rather than just having to make a choice. And when we do make that choice we can’t avoid that nagging feeling “perhaps I should have gone for the other one”. Result? Anxiety, regret and disappointment.

Less choice makes shoppers feel happier

Which may be one of the secrets behind limited-range hard discounters like Aldi, Schwartz suggests. As well as offering low, low prices, they actually bring big emotional benefits by reducing the emotional costs of choice. Their shoppers feel happier twice over.

Schwartz could add more to this regret and stress list, but you get the picture. If he is right, the implications for brands could be far reaching. It raises the possibility, for example, that sometimes a fair proportion of the brand’s value to the customer doesn’t lie in its functional attributes or brand personality, but in the mere fact of being a famous brand.

Reputable brands can short circuit the informational and emotional costs of choice with a simple rule of thumb: “buy the leading brand” (example: “Nobody ever got fired for buying IBM”). As a public promise of quality, they provide reassurance, thereby helping to avoid both anticipation regret and decision regret. Brand advertising also helps minimise post-decision disappointment by reassuring buyers that “you made the right choice”. In one way or another, then, brands not only deliver emotional and economic benefits, they also help reduce the emotional costs of choice.

But there’s a flip side to this. Recently the range of brand choices has proliferated exponentially into people, places, holiday destinations, airline operators, mobile phones, computers, internet service providers, pensions, schools, health care providers and so on. Meanwhile, the range of choices within each of these categories is also expanding exponentially. Currently, for example, there are around 8,000 different mortgage products available on the UK market.

If you allocated just six minutes to each mortgage – to access information, read through details and assess strong and weak points – you would need to allocate 48,000 minutes or 800 hours to this task. Assuming a 40-hour working week, that’s 20 weeks or nearly half a year’s-worth of work. Taking an average salary of around &£25,000 a year, that’s &£10,000 worth of work – without even counting the emotional costs we’ve just been discussing. Now, this is staggeringly absurd for any consumer making such an investment, but also for the marketers who have created this situation.

Ah, you might say. That is where brands come in! A strong brand helps the consumer edit choice, and save time and hassle along the way. Which is fine, except that every single one of the companies behind those 8,000 mortgages is trying to build a strong brand. And each brand manager inside each these companies is so focused on the task at hand – how to become “top of mind”, increase salience, preference and so on – that he is quite oblivious to how much of a problem he, along with his peers in competing brands, is creating for the very consumers he is trying to woo.

Company becomes the focus, not the consumer

In fact, when we stop to think about it, the metrics by which most brand managers are judged – market share, sales targets, and so on – have nothing to do with consumers at all. These behaviour-shaping metrics are company focused, not customer focused.

Which raises a question. If, at one stage in their evolution, brands added value for consumers simply by the mere fact of being a brand, are they now taking value away as the costs of choice mount up?

For marketers, this question is unsettling for three reasons. First, it suggests that it is not axiomatic that brands and branding bring undiluted benefits for consumers. Second, it threatens to sideline existing obsessions with marketing “strategy” – how to gain consumer attention, influence attitudes and behaviour, and so on – to the structure of the markets we work within. And third, it suggests a shift in value emphasis, away from what consumers buy to how they buy it.

If the next dimension of value lies not just in offering better products, but in crafting better processes for consumers – helping them streamline and navigate their way to better, more emotionally satisfying choices – then a lot will have to change. On the other hand, it may also be an enormous value-creating opportunity.

Alan Mitchell, asmitchell@aol.com

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