Have you ever found yourself stuck in the supermarket, trying to choose between two more or less identical products? This seemingly trivial situation occurs quite often, and the reason behind it is not the fact that the two products are so different that the choice actually matters – they are more likely just too similar.
One of the most cited studies in the field of behavior economics is the famed Jam study, performed by Barry Schwartz. One group of customers in a supermarket where given the choice of tasting six different kinds of jam, where another group where given a wider set of flavors: 24 different kinds of sweet, sugery jam.
To Schwartz’ surprise, the first group had a much higher purchase frequency than the latter and this very fact is the basis for what Schwartz has dubbed the ‘Paradox of Choice‘: more choices actually makes it harder to choose.
Paradox of choice
Why? Well, more choices doesn’t just equal more variety, it also introduces more decisions. The process of comparing the products–consciously or sub-consciously–gets harder, because if it’s hard to decide which of six unknown brands of jams are better, how can you possibly weigh all the parameters of 16 against each other? Is price more important than taste? Is the better designed label in any way a signature of quality of the content? Is the healthy promise of less sugar more important than the sweetness it provides, and if so – to what extent?
While some customers argue that more choices are preferred, a wider selection may in fact reduce their impulse to complete the purchase.
Pointing out the difference
As kind hearted marketers, our job is obviously to guide the customer through their purchase. One way of dealing with this uncertainty is to frame the products to appear to have larger differences than they actually have. Apple have for long been champions at this game, by the super obvious targeting of all their products.
Many computer manufacturers struggle to come up with new creative ways of segmenting their products. Take Dell for instance, masters of fragmentation, with their “high performance“, “extreme gaming“, “thin and powerful“, “style and entertainment” lines, just to name a few. I’m sure that the purpose of these categories is to help customers, but I would imagine that they achieve quite the opposite.
Apple on the other hand, has consistently divided their products into four major categories using only two variables; private/professional and stationary/laptop. Not only are the categories simple to understand, they are also mutually exclusive.
And, even though a number of choices still remain after this initial fork, more than with most computer manufacturers, the obvious first step makes the rest of the process a piece of cake for a very simple reason. With this first simple division, you are basically down to a single possible computer, and the following choices have been transformed from actual decisions into fine tuning. It’s much, much easier to decide if you want to upgrade the hard drive in your computer, rather then having different hard drive sizes as one of the many parameters of selecting the computer itself.
Introducing the dud
On the contrary, when there is little difference between the products you’re trying to differentiate, I like to present a technique I’ve chosen to call “introducing the dud”. Not that’s it’s my technique to start with, but still, I like saying the dud.
The concept is quite simple. When products are hard to distinguish, add another – similiar, but obviously worse – alternative, to give your preferred alternative an edge. Let’s repeat that: add a bad alternativ, to make one of the equal alternatives seem better.
Dan Ariely presents an interesting example in his book Predicably Irrational, where a potential customer at an travel agency is offered two more or less identical vacations, one in Rome and one in Paris – both at roughly the same price. If we disregard the French and their attitude, these two may seem like equally good offers – which may cause confusion.
Then, just for kicks, let’s say that we add another possibility; Bad Rome. Bad Rome has all the characteristics of Rome, but is offers a worse hotel at a higher price.
The newly introduced option is obviously worse, but what’s interesting is that suddenly we have another point of reference. Our mind start to create it’s own connections (“maybe Rome is more expensive after all, Good Rome must be a bargain”) and suddenly – Good Rome just might come off as a better deal. See what I did there?
Focusing on what’s important
The fact is that even when we try to be rational, we have a hard time focusing on what’s really important. Instead we tend to focus on parameters that are easy to understand and evaluate. This is the reason why computers are advertised primarily using the CPU speeds or amount of RAM, while other more important (and admittedly more complex) parameters – such as what kind of LCD display your laptop has, or the build quality – tend to be left off the list.
So, when you’re trying to convince a customers which product to buy – don’t get stuck on all of your own reasons for why the product is superior, focus on the ones that are easily understandable and even more important: easily comparable to the alternatives. Make the initial choice easy and you’ll get much better results.