Decision Paralysis and Consumer Loyalty

Evan_Snively
By Evan Snively
Maritz Motivation Solutions

May 01, 2018

Editor's Note: Ever notice when you get to Denny’s at 3 am after a long night of “networking” (read: drinking), the menu has pictures on it?

That makes it easy to choose from an overwhelming selection of food and food-like items. Usually you choose by grunting and pointing – No? Just me? – and in this piece, Evan Snively explains why such simplification is a result of good design.

Evan does it more maturely than I would. Dang Millennials.

This article originally appeared on the Maritz Motivation Solutions™ blog.

I am a data driven consumer. I am a millennial with disposable income (though less and less with two kids). I am conscious about a company’s ethics and their social giving. But the most important thing you need to know about me as a consumer? I suffer from decision paralysis.

That is to say, I can’t make up my mind. And when I do? I still haven’t, not really – with my brain always playing a game of “what if” leading to increased regret and decreased satisfaction with my very own purchase decisions. And unfortunately for you, there are millions more like me, and a consumer with buyer’s remorse is not very likely to become a brand loyalist.

So how do you help us snap out of it?

The first step is to understand the two psychological barriers responsible for this inhibiting behavior: Loss Aversion and Choice Overload.

Ingrained Traits 

Loss Aversion is ingrained into human’s DNA. It is the theory that people have a higher proclivity to avoid losses than they do to acquire equivalent gains. This behavior manifests because humans are hardwired to defend what is already ours and therefore a loss going out from “our pile” creates more negative satisfaction than an equal gain going into “our pile” creates positive satisfaction. (i.e. the sadness I feel when I lose $100 outweighs the joy I feel when I find $100.) Because the loss of something is more painful than the equivalent gain, we work harder to avoid it. In the context of purchasing, this desire to prevent loss manifests itself in a nagging voice saying:

“Is this really the cheapest website to purchase through?…will the price drop tomorrow?…I swore I saw this item less expensive somewhere else…”

Rationally, someone with decision paralysis could be 100% willing to pay the advertised price for the good they are considering buying, but the idea that they aren’t getting the absolute best deal possible (therefore leaving money on the table), stalls the conversion. In short – the brain has a bad case of FOMO.

And while Loss Aversion is ingrained into human’s DNA… it is Choice Overload that is ingrained into America’s DNA. Western culture puts an emphasis on individuality, and at the core of one’s ability to be unique and autonomous is the ability to choose. Ideally, from an infinite number of variables that don’t constrict self-expression. The problem is that humans weren’t designed to intake and compare endless data – in fact, the average human cognitive ability cannot efficiently compare more than five options with any level of great detail. Those suffering from choice overload find their heads swirling with the likes of:

“What utility am I passing up on by NOT purchasing choice B?…is this bonus feature worth the extra $25?…I can see myself using both options in different circumstances…”

Essentially, when faced with too many options, the consumer attempting to maximize their decision becomes overwhelmed to the point where fear of making the wrong decision prevents them from making any decision at all. If you are lucky enough that this concept is completely foreign to you, simply Google “Jam Study” for a famous example.

To jam or not to jam, that is the question.

The consumer attempting to maximize their decision becomes overwhelmed to the point where fear of making the wrong decision prevents them from making any decision at all.

Removing the Barrier

Now that you understand how our complicated brains are wired, I am here to tell you there is hope. How can a business conquer the hurdles of decision paralysis to engage new customers in a manner which sets them up for a successful long-term relationship? Start by incorporating an ingredient essential to any healthy relationship – trust. The #1 way to get a consumer’s foot in the door is by making them feel at ease with committing to the purchase. Over-stimulated folks crave a certain level of trust when entering a relationship otherwise, things will never work out between you. (And it’s not them, it’s you – “advertising practitioner” is one of the least trusted jobs in America, scoring just above Member of Congress, but not quite as trustworthy as a lawyer…or auto mechanic…or well you get the idea).

So, help them overcome that negative stereotype by offering the following: 

No Questions Asked Returns 

Odds are they won’t take you up on it, but simply knowing the option exists can ease their racing mind. This is especially important for e-commerce retailers where the consumer will not have been able to physically examine a good prior to purchasing, as well as for first-time consumers who do not have experience with a previous product to establish the brand standard. Flexible returns showcase confidence in your value prop, and that confidence is passed on to the consumer.

Become a Psychic 

No, not literally – but you should be able to predict what consumers are most likely to ask. Data from existing customers should certainly play a role in this equation, but another great and underutilized resource is UGC (user generated content). Spend some time researching on the internet to see what topics your audience are organically gravitating towards. Once discovered, make sure this information is easy to find – the last thing you want is a consumer leaving your website to do their own research only to stumble across a competitor’s offering. The longer someone with decision paralysis is hunched over a computer analyzing every possible option, the more likely they will be dissatisfied with their final decision – even if it does end up being your product they select. Preemptively answering questions creates the sensation of “this is exactly what I am looking for” and gives the green light to proceed with the purchase immediately.

Make a Good First Impression

Seems obvious – because it is obvious. But too many times a hyped-up sales pitch is followed by underwhelming results. What is promised must at least match what is delivered, otherwise the consumer will feel like they have lost out on some expected gain, and we know that losses are a very powerful thing. It’s important to remember the moment of success for your business is not when you receive a consumer’s credit card number. It is the moment they realize they find so much utility from their relationship with your brand that they will gladly provide it for you again (and again, and again).

The Big Takeaway 

Simplify where you can. Imparting confidence upon potential consumers begins with taking the time to understand the root of their uncertainties. Rational consumers are nervous about making the wrong decision, especially in unfamiliar industries. The goal of loyalty is to create an emotional bond between the brand and consumer which will supersede the brain’s default desire to undergo a thorough rational analysis. The result? Your brand’s product is always the right decision in the mind of the consumer. No further discussion necessary.

Evan_Snively
By Evan Snively
Maritz Motivation Solutions

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