If you want your customers to both buy quickly AND feel less regret after they buy, give them fewer rather than more choices.

Eating out may be a distant memory for many of us in current times, but cast your mind back to the last time you went to an upmarket restaurant. More than likely the restaurant had a reasonably small menu with only a few (signature) dishes to choose from. And you probably found it was quick for you to decide on what to order…

Contrast this to a time when you saw a really long menu with lots of options in a restaurant that you visited for the very first time. You might have asked for recommendations from the waiters or your dining companions, or maybe even looked at an online restaurant review app for recommended dishes. Chances are that choosing a dish in this scenario was a more time consuming, and potentially less satisfying exercise.

While companies often feel that more choice is better for their customers, human beings are generally easily overwhelmed when we are offered too many product options or choices. This is the same whether we are talking about restaurant menus, investment fund options or even the cereal aisle in your local supermarket.

The culprit here is choice overload.

What is choice overload?

When the number of relative choices increases, we get what’s called decision fatigue. It all starts seeming too hard. The risk of making a bad choice increases and humans have what’s called a “loss aversion” – we fear loss much more than we worry about gains. The more options there are, the greater the likelihood of loss and therefore regret.

When faced with too much choice, we are more likely to do one of four things:

1. Procrastinate on making a decision
2. Don’t act or buy at all – we stick our head in the sand!
3. Go with the default or recommended option
4. Go to a competitor with fewer options

We’re also more likely to feel regret after a decision if there was too much choice offered in the decision making process.

The infamous jam Jar experiment on choice overload

The most famous study around choice overload is Columbia University’s “jam jar” experiment, run by academics Sheena Iyengar and Ross Lepper in 2000. They ran several experiments in a supermarket where they set up tasting tables for jams. One day they had only 6 flavours of jam; another day they had 24 flavours. While the table with 24 jam flavours attracted a lot more people to stop for a taste test, it was the table with 6 jam flavours that had 10 times more sales (from 3 to 30% of people who sampled)

So – more options means more interest; but more importantly it means fewer sales.

What can you do to avoid choice overload?

There are a number of things you can do to reduce choice overload and ensure your customers actually make a choice AND have lower levels of regret.

1. Reduce the number of options in each category – think about removing less popular options (though make sure you test this first as sometimes the less popular options serve an important role as a “decoy”).
   
2. Categorise the options – if you’ve got more than 5 or so products, it’s time to categorise them into logical groupings. A great example is the classic Asian take-out menu where you may have 100s of permutations but generally you choose by meal type and then customise the meat etc.
   
3. Help customers make the choice – for example, get customers to work through an online wizard that helps them narrow the range of options, or use phone or web agents to guide customers, or simply make it obvious what’s the recommended or default option for them.

Choice overload or not, here’s hoping you get that trip to the restaurant soon!

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