The Paradox of Choice and Analysis Paralysis: Why Limiting Options Can Increase Sales

  •    Freelance writer focused on web development, email marketing and baseball. He lives in Los Angeles, but wishes he lived in Tokyo.

Before a shopper can make a purchase, they first have to choose the product or service they want to buy. Common sense says that the more choice and variation you provide them, the more likely they'll be to find the product they want. Common sense might be wrong.

Study after study has found that when you give people too many options, they get overwhelmed with analysis paralysis, have trouble making a decision and end up buying nothing. While you probably don't want to limit potential customers to just one option (since that isn't much of a choice), you may not want to give them thirty.

How Much is Too Much?

Perhaps the most famous early look into the paradox of choice was performed by Sheena Iyengar, a professor at Columbia University. In 1995 she set up a display of jams at a grocery store in California, and any customer who stopped by the display was given a coupon for $1 off those jams.

She started with a display of 24 different flavors of jam, but continually switched this out over a period of days with a much smaller display of 6 flavors. What she discovered was this: 60% of customers visited the 24 jam display, while just 40% came by the smaller one. Customers were drawn to the huge variety, which was the first and only point in the larger sample's favor, because she also discovered this:

Approximately 30% of visitors to the 6 jam display bought a jar, while only 3% of visitors to the much larger display of 24 did so. To highlight exactly how large a disparity this is:

If you had 1000 potential customers, with 600 of them taking interest in a larger selection and 400 of them in a smaller one, then the above numbers would translate into 18 customers from the larger group and 120 from the smaller. To say this is significant is an understatement. This seems to indicate that most people are subconsciously drawn to greater choice, but ultimately respond better to a narrower set of options. It's a bit of a paradox. You might even call it a paradox of choice.

How Little is Too Little?

Based on the above, the more you limit choice to help customers avoid analysis paralysis then the more sales you'll make, right? Leaving shoppers with one choice will ensure that 100% will make a purchase? Not quite.

You still need to draw people in and, as we've also seen from the above, shoppers at least appear to be drawn to more choice. Unless what you're selling is revolutionary like an iPhone, you still need to give customers a chance to feel like they're making the right selection for themselves. Even Apple provides different sizes of iPhones.

A good rule of thumb is to have at least three choices, essentially giving shoppers a small/medium/large range (though the options need not be related to size or anything similar). That's enough for a potential customer to feel like they can select their best option. There's a lot more truth to Goldilocks and the Three Bears than just the notion that bears will get really mad if you break into their house to eat their porridge.

Guide Customers to What They Should Buy

Keeping with the Goldilocks reference above, did you know that if you provide customers with three options, with each one getting progressively more expensive, that most people will buy the middle one? Studies have shown this is true.

You're immediately giving shoppers the chance to not feel like cheapskates, but to also feel like they're getting a good deal by not buying the most expensive choice. While also leaving both a less expensive and more expensive option in place for the smaller number of people who prefer either.

This is one way that you can show a customer exactly what you'd like them to buy. They have choices, but you're telling them to buy the middle one since it appears to be the best balance of quality to price.

You can direct customers to what they should purchase even without going the Goldilocks route. Create a page on your site for "staff recommendations." Or highlight the products you most want to sell right on your home page. Even if you have a large number of products, this narrows the options down so shoppers can see their "best" choices without having to dig through your entire site and decide on their own.

And that ultimately is what this all comes down to in the end. Potential customers (and we're all potential customers somewhere) want to feel like they're buying the best possible product at the best possible price. By limiting choice or at least directing shoppers to a more limited range of choices, you'll keep those shoppers from feeling analysis paralysis and help them do exactly that.