One had 24 flavours of jam whilst the other had just six. In fact, while consumers may express a preference for greater choice, several experiments reveal that when complexity is high or decisions need to be made under time pressure, too much choice can be paralysing.Ĭonsider, for example, an experiment conducted in a supermarket where researchers set up two different tasting booths. Yet there is a stream of research, pursued over the past decade by my ex-colleagues from London Business School, Simona Botti and Sheena Iyengar, that demonstrates why more choice is not always positive. This leads to feelings of control over one’s fate, instead of the hopelessness and helplessness you feel when someone else chooses for you. Psychology demonstrates that people prefer making their own choices rather than having them externally determined. If sellers are evenly distributed along the circumference of a circular product space, then removing a subset of these choices will increase the average travel cost for consumers. I mean, who could be against more choice?įrom an economics perspective, more choice leads to utility maximisation through better preference matching. There is the presumption that increasing the choice for consumers – which would allow them to select exactly what is most appropriate – is preferable. It should not simply overwhelm consumers by offering them infinite options to select from. ![]() But even when customisation is cost-effective, it has to be smart. It is relatively easy to customise the coffee at Starbucks or the home page of the Amazon website for each user. In certain industries, customisation does not have a cost penalty. This enables marketers to offer much more variety to consumers. Twenty years ago, when teaching at the IMD business school in Switzerland, one of my popular assertions was: “Instead of seeking the customer in each individual, we should seek the individual in each customer.” Today, with technologies such as the internet of things and 3D printing, and with consumers taking to social media, companies have an incredible range of opportunities to customise their products and services for the individual.
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