How Too many Choices Create Confusion among Customers
Source: Too many option
Organizations are creating more choices through market segmentation to satisfy individual customers’ needs and enhance users’ experiences. According to Kerin and Hartley “Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. And Each market segment consists of people who are relatively similar to each other in terms of their consumption behavior”.
Certainly, Market segmentation is a great way to respond to a group of customers’ needs effectively, more precisely, provide tailor solutions to individual needs by creating more choices for each group in an organization. In this current business landscape, all types of business organizations segment their market aiming to satisfy their customers or clients’ needs while fostering business growth and creating an impact on the organization’s bottom line.
However, the question is how useful is it: Does this approach foster your business or create confusion among customers? Or are we overwhelming or confusing them by offering too many options of products or services instead of solving their problem or meeting unmet demand with those offering?
Let’s take a glance at studies’ findings and experts’ opinion on that matter
Source: The Paradox of Choice
Having choices is good, however, when we have to choose the right one from too many options, it is really overwhelming, confusing, time consuming, and draining.
We have too many options to choose from, and too little time to spend.
American Psychologist Barry Schwartz demonstrated “Freedom of Choice” in his famous book The Paradox of Choice, which leads people powerless and frustrated. That’s because choosing one from many other options is an opportunity cost, you are giving up the rest of the opportunities to have one. And people can switch and replace the choice conveniently, therefore, the absolute value of making a choice does not exist anymore.
Ulf Bockenholt and Alexander Chernev, marketing professors at Kellogg, around 2017 studied a phenomenon called “Choice overload” — the negative psychological, emotional, and behavioral effects of having too many options to choose from. Choice of overload describes how people get confused and overwhelmed by too many options. It can leave consumers dissatisfied with the choice they made, often described as “Buyer’s remorse”. It also can lead to a behavioral paralysis, Bockenholt which Bockenholt explains as a situation “where people are faced with so many choices that they can’t decide among them and make no choice at all” [source].
Let’s take a glance at the study conducted by Sheena Iyengar from Columbia University, “she set up a table laden with jams outside of an upscale grocery store in Menlo Park, CA. Over a period of two consecutive Saturdays, research assistants dressed up as store employees and offered samples of either 6 or 24 flavors of Wilkin and Sons Jams, a British jelly purveyor known for exotic flavors. During the time periods when 24 flavors were offered, 60% of people stopped to sample the jams, compared to 40% when only 6 flavors were offered. These numbers seem in favor of more choices, but the important question is this: which group purchased more?
Of the customers who sampled 24 flavors, only 3% purchased, but of the customers who sampled 6, 30% did the same”.
It appears too many options leads to confusion, annoyance, and more importantly time consuming. Given our current lifestyle we are living in time constraints, we do not have time to spend hours and hours to choose one product from options. Business should make our life easier with their offerings, not make our life harder.