Choices Lead to Consumer Confusion

"More Looks, More Styles, More Choices" trumpets the headline in a cabinet brochure. At first, it sounds good. The more you offer, the easier it will be for your customer to find the perfect kitchen and buy it from you.

Growing evidence, however, suggests the contrary. A large array of options may keep consumers from buying because it increases the effort required to make a decision.

This is the argument presented by Barry Schwartz in a newly released book, "The Paradox of Choice." Schwartz, a professor of Social Theory and Social Action at Swarthmore College, cites a series of studies disputing the idea that more choice is better. He claims that while some choice is good, too much leads to conflict and inertia.

Schwartz writes that, in the past few decades, as the number of choices facing American consumers has escalated, the value of freedom of choice has declined. He points to options in phone service, utilities, health insurance and retirement plansall areas where we once had no choice. All of this choosing leaves consumers overwhelmed and stressed out.

Choice can create conflict, he explains. "Adding a second option creates a conflict, forcing a trade-off between price and quality. Without a compelling reason to go one way or the other, potential consumers pass upaltogether. By creating the conflict, this second option makes it harder, not easier, to make a choice," Schwartz reports.

Emotional Purchases
Choosing a kitchen or bath is very complex and emotionally loaded, for a number of reasons.

First, there are the "opportunity" costs that is, the prospect wonders, what else could or should he do with the money? Buy a car? Make an investment? "Difficult trade-offs make it difficult to justify decisions, so decisions are deferred," Schwartz notes.

What's more, decisions about our homes are highly emotional because of what they reveal to the outside world. "Freedom of choice has expressive value," Schwartz observes. "Choice is what enables us to tell the world who we are and what we care about."

Such decisions are even harder for people Schwartz identifies as maximizers, that is, people who want the absolute best. Satisfiers, on the other hand, are focused on choosing something good enough. "It's not that satisfiers settle for mediocrity; it's that the satisfier is content with the merely excellent as opposed to the absolute best," he explains. Maximizers engage in more product comparisons, take longer to decide and spend more time comparing their purchase decisions to others.

Given a plethora of choice, how do consumers, both maximizers and satisfiers, make decisions? They go with what's familiar, make comparisons, try to avoid losses and seek ways to justify decisions.

Advertising plays a key role. "More than anything else, we get information from advertising," Schwartz says.

"Studies have shown that familiarity breeds liking," he writes. "when products are essentially equivalent, people go with what's familiar, even if it's only familiar because they know its name from advertising."

They also make decisions, especially on pricing, by making comparisons. "When we see outdoor gas grills on the market for $8,000, it seems quite reasonable to buy one for $1,200," Schwartz explains. Even if high-priced products don't sell, they help drive sales of lower priced products by making them look like a better buy.

With this in mind, find out where your prospects have already shopped. If they've been to a big box, they'll have a different price frame of reference than if they've shopped at an exclusive design center.

Preventing Loss
People aren't necessarily seeking to gain when they make a decision. It's more important to avoid a loss. Losing produces a feeling of negativity that is more intense than the feelings of elation produced by a gain. Some studies have estimated that losses have more than twice the psychological impact as equivalent gains, Schwartz points out.