Why having too many choices stops us in our tracks

INTRODUCTION

How many times have you gone to put a movie on, only to find yourself aimlessly scrolling through your streaming service of choice 20 minutes later with no movie playing? Perhaps you struggle to decide which brand of mayonnaise to buy, or how to capitalise on those few precious moments when the baby *actually* sleeps. I know there are some days when I wish someone would make the decision for me, and I know our household isn’t the only one that struggles with these choices.

What's happening in each of these scenarios is the paradox of choice - our inability to choose when we're given too many choices. The more choices there are, the harder it is for us to make one. It's related to decision anxiety, although this also includes times when there are few choices.

Why small businesses should understand the paradox of choice

The paradox impacts all people with choices available to them, including all our potential and actual customers. It also impacts us as business owners when we are deciding what kind of products or services we want to offer. For this reason, small businesses need to be aware of the paradox as they are working away at their marketing. In a world that's saturated with products that are virtually indistinguishable from each other, getting customers to choose us is harder than ever – but not impossible.

THE PARADOX OF CHOICE

The paradox of choice definition

The paradox of choice falls under the banner of behavioural economics, which looks at how and why people act the way they do in the real world. It happens when we are provided with an abundance of options. Our brains become overwhelmed with the stress of making a decision and we end up less satisfied because we keep thinking ‘What if I made a different choice?’. It doesn’t make much sense when you first think about it – surely by having the power of choice with more options available to us, we’re better off! The world is your oyster, you know? Unfortunately for us, our brains haven’t evolved as quickly as society has. We’re exposed to the phenomenon every day, even more now with all the ads we see on social media.

How the paradox affects decision making

The choice paradox can have a big impact on our decision-making capabilities.

1. It contributes to decision fatigue – we’ve all had that feeling where we want someone else to choose for us. It can be downright exhausting trying to decide on even the simplest thing some days, especially if we’ve already had to make key decisions during the day! That’s why Barak Obama wore the same suit every day during his presidency – to preserve his decision-making energy for the decisions that really counted.

2. We feel crippled by comparison anxiety – we stress out about comparing all the options to make the best decision possible. Trust me, we don’t make the best decisions when we’re anxious or stressed!

3. We end up disappointed and dissatisfied – when so many options are available, we feel certain that the perfect choice must exist since there are so many options. If it’s not bang-on perfect, we can regret the choice we made and maybe even lose confidence in our decision-making abilities.

4. We start thinking about the opportunity cost – the opportunity we give up if we choose one option over another. We might start feeling some FOMO creeping in and might worry that there’s something better out there.

HOW THE CHOICE PARADOX IMPACTS SMALL BUSINESS MARKETING

The importance of offering choices

As business owners, we need to be able to offer options to our customers. It may be based on price point, quality, materials used, colour, expertise, inclusions, exclusions, customisation, you name it. Having options available means that you’re better able to serve your customers by having an array of suitable products or services that suit their needs. You would have done your market research and considered who your ideal customer is and what they want before developing and offering your options to the big bad world.

The paradox of too many choices as a business owner

As a business owner, deciding what kind of products or services we offer can feel overwhelming. General service businesses without a specific niche can quickly find themselves offering the world, which is ok if the business is large but can create major challenges if it’s only small. For product-based businesses, consider it from the customer’s perspective. For example, if your online store offers 178 options for organic facial cleansers (yes, this is based on a real website), where does the customer start? That’s where a solid business plan comes into play. It can help you prioritise actions, objectives and goals, provide you with control, and assist in seeking finance if needed. The business plan template available via the Australian Government Business website is a great place to start.

The impact of decision fatigue on customers

When we have decision fatigue, we can end up delaying the decisions. It goes in the too-hard basket, to be dealt with at another time when the pressure is on, or forgotten about altogether. Alternatively, we might become impulsive in our decision-making and not willing to go through each of the options available to us. This may result in decreased satisfaction with the choice we made and reduce the likelihood of repeat buying because of the negative feelings we have that are associated with the choice we made.

STRATEGIES TO OVERCOME THE CHOICE PARADOX

You now know a bit about the choice paradox and how it can impact us as business owners as well as our customers. But how can we make life easier for ourselves and our customers when it comes to making choices?

1. Simplify choices – I know it might sound counterintuitive, but hear me out. Offering fewer options and streamlining your product or services can increase sales because it’s easier for customers to compare and choose between options.

2. Use clear and concise language­ – using plain English and cutting the jargon from product and service descriptions makes it easier for customers to understand and will allow them to make informed decisions.

3. Offer targeted choices – tailoring your offer to the specific customer to meet their preferences and needs will reduce decision fatigue.

4. Using social proof to influence decision-making – including genuine customer reviews and ratings allows you to build trust with your customers, increasing their confidence in their buying decisions.

5. Implement a recommended or bestseller list – highlighting your most popular products or services will make it easier for buyers to choose between options, again reducing decision fatigue.

CONCLUSION

The power of choice can be overwhelming. If we know how the process of decision making works and what the paradox of choice is, we can offer our products and services in a way that makes it easy for our customers.