Know Your Nuggets: Choice Overload

Bob Sullivan
By Bob Sullivan
Writer

August 08, 2018

Editor's Note: This is the third piece we’ve run that touches on some aspect of choice overload. (See this article and this one, too.) It’s obviously an omnipresent behavioral principle that rears its ugly head(s) frequently.

This, however, is our first Know Your Nugget about choice overload, and, more importantly, it’s the only one that involves beer. Unless, like me, you rarely read these articles while sober.

Beer bars are all the rage. Perhaps you've experienced actual rage yourself, the last time you saw someone approach a highly trained beertender and ask this simple question: "What's good?"

Maybe there was even an audible gasp in the bar. Egads! Inevitably, the beertender escalated the situation with a "Well, what do you like?" Then patrons looked on in horror, waiting impatiently behind this traffic jam at the bar. Mercifully, the cringeworthy exchange only ended when the newbie finally walking away with a beer he or she probably ended up hating.

Nobody’s happy – new customers, old customers, the bar owner. But it happens all the time. Think about the last time you walked into an unfamiliar place that offered 40, 50, 75, even 100 types of draft beer, many from small breweries you've never heard of. Faced with so many choices, you likely did what most people do: You froze. Or you sheepishly asked, “What’s your favorite?” Or you ordered the first beer on the menu. Or what the person before you had. Or you went simple, and asked for something like "The hoppy-est IPA you have." Or, Heaven forbid, you asked for a Budweiser.

Both you and the beer bar newbie were suffering from choice overload, a natural phenomenon that's become an epidemic in the Internet age. Your grocery store sells hundreds of toothpastes. Online dating sites offer thousands of single people within your town. The average Walmart stocks 100,000 products. Amazon offers millions of books.

Meanwhile, the average person makes about 70 choices a day. Obviously, the math doesn't work in our favor. There’s no time to make all these calculations.

Choice overload makes both employees and customers check out. It creates the exact opposite of engagement.

Scholars Aner Sela and Jonah Berger say modern life has placed many people into a state they call "Decision Quicksand." It's hard to pick from hundreds of toothpaste options, and our brains confuse "hard" with "important." And so we end up in a dreaded “recursive loop,” spending more and more time on less and less important decisions.

Choice overload isn't just about trivial things, of course. Columbia professor Sheena Iyengar found a dramatic and direct connection between the amount of choice and the participation rate in retirement plans. The more mutual funds a firm offers its employees, the less they enrolled. After examining data from 800,000 employees, she even found a formula: with every additional 10 funds in a plan, allocation to equity funds decreased by 3.28%.

Choice overload makes both employees and customers check out, their eyes glazed over — so much that they end up with a bad beer, perhaps never to come back, or don't even bother signing up for a free company match on their retirement accounts. It creates the exact opposite of engagement.

But it doesn’t have to be that way.

Iyengar, in her book "The Art of Choosing", says the key to making better choices is "be choosy about choosing." It’s a truism of our time. Fewer, more carefully curated choices are key to increasing success and satisfaction with decision-making. Your job is curate choices for your customers and employees.

Fewer, more carefully curated choices are key to increasing success and satisfaction with decision-making.

Iyengar says the optimal number of choices is about 7 — give or take one or two. That’s about the most any human can process at once. So, obviously, you’re going to have to remove many of the choices you offer. But cutting isn’t the only answer. It better not be, because beer bars aren’t going back to 6 or 7 taps.

Categorization is another important strategy for making choice easier. Grouping choices logically helps the decision-maker ignore extraneous options and hone in on groups smaller than 10. So it's OK to offer 100 beers if the list clearly includes 7 IPAs, 6 stouts and 8 lagers. So is a technique Iyengar calls "conditioning for complexity." Give people the easy choices first, then walk them through the most diverse choices last. Instead of responding, "What do you like?" a beertender could turn a negative exchange into a positive by deftly asking, "Do you like porters, lagers or maybe something in the middle, like ambers?" That's a far easier question for a customer to answer, and they are more likely to engage in back-and-forth discussion. If, two questions later, there's still a list of 22 lagers to pick from, that consumer is much more likely to "stay with you" than check out.

You don’t need to eliminate all choice to avoid choice overload, but you do need to do some honest editing.

You don’t need to eliminate all choice to avoid choice overload. But you do need to do some honest editing, and if you want to offer more than 7 or 8 options to people, take the time to thoughtfully organize them and neatly present them in categories. Your customers and employees will make better choices, and they’ll be happier with what they pick, which is better for everyone.

We can all raise our mugs of Budweiser and toast to that.

Bob Sullivan
By Bob Sullivan
Writer

Subscribe

Get the latest behavioral science insights.