Paradox of Choice

Gone are the days where stores only offered a handful of goods. Now, companies fight for shelf space, competing to win a small unit of area and trying not to drown in the sea of similar product offerings. From a consumer perspective, the liberty to choose from a multitude of goods and services would appear to be a liberating experience and provide a sense of decision-making power, but does this logic really follow?

One would think that having so many options and the freedom to choose mean that there’s guaranteed satisfaction for the consumer. But this is where the paradox presents itself. Not providing enough options to the consumer leaves him unsatisfied, wishing he could be more selective on certain features. However, too many options is equally unsatisfying because he doesn’t know where to begin in his decision-making. Instead of seeing a positive correlation between the number of options and satisfaction, we rather see a diminishing level of satisfaction with an increasing number of options.



The above graph perfectly illustrates consumer satisfaction in relation to the number of options offered. Intuitively, the logic follows that increasing the availability of options leads to increase consumer satisfaction, but there is a limit to this consumer happiness. The ‘sweet spot’ as the graph puts it, is the point at which we begin to see a decreasing level of satisfaction. This decreasing level of satisfaction could be a result of many things, but in my opinion is primarily due to increased input needed to complete a purchase. Our society has grown so accustomed to speedy transactions, and increasing options greatly slows us down. We spend more time researching, deciding, and evaluating the different choices we could make. Additionally, we spend more time reflecting on our purchases because we ponder what choices we could have made and are sometimes left disappointed, wishing we had made a different decision. Given fewer options, we never could have set so high of expectations, so our level of satisfaction would not be so affected. In other words, our expectations would be lower with fewer options, so it would be much easier to reach satisfaction.

To put this diminishing level of satisfaction into perspective, let’s consider this real-life example of mine from this past weekend. I was brave enough to venture to Chicago during 7 degree weather and failed to bring any form of chapstick. Wind-chapped and blistering, my lips were shriveled and felt like sandpaper. Going into the local drug store, I ran into 25 different options: medicated, flavored, scented, non-scented, all-natural, small, big, glittery, gloss, balm, push-up, roll-up, flip-top, removable cap, etc. The list of options could probably have stretched down the aisle, around the corner, out the door, and back to the chapstick aisle. I stood there contemplating which features I liked and did not like. What normally would have been a 1 minute “my lips are dry and I need moisture” became a 5 minute “stand there and think about how I want my lips (and chapstick tube) to feel, look, and taste”. After considerable thought, I went for a small, all-natural, scented, lip balm with a flip top. Excited about my new purchase, I immediately opened it and saved my dying puckers, only to find out that my expectations were not met.

Had I not had so many options, I could have easily walked into the drug store and grabbed the generic cherry flavored Chapstick brand and not thought twice. I wouldn’t have seen the different glosses and flavors, sizes and styles, so I wouldn’t have had the chance to wish I had made a different decision. In other words, I wouldn’t have been disappointed not only in my poor choice, but in the wasted time spent on something so futile. Additionally, because I thought I discovered a chapstick that suited exactly what I needed, anything less than that expectation only led to upset. This is just an example of the paradox of choice for a simple good that costs less than $5. Imagine the bitterness a consumer feels when purchasing a $50,000 car and realizes that the option combination they selected was only half of what they anticipated.

The paradox of choice puts marketers in between a rock and a hard place. Not offering enough disappoints the customer because they want goods and services tailored to them specifically, but having too many options makes decisions too difficult. Consumers, although autonomous for the most part, still require some hand-holding through the decision-making process.

In my opinion, marketers and companies should be wary of the number of options they offer. Instead of saturating the shelf with one product that has 25 different combinations of options, companies and marketers should aim for that sweet spot to achieve the greatest level of satisfaction. But that’s obviously easier said than done.

What’s really interesting to me is that consumers are the ones that created this paradox in the first place. Their demands created all these options, but after companies responded, they ended up being dissatisfied. I guess this is what makes marketing a true science. When we think we finally fine-tune the needs and desires of a consumer, their demands change and we react. Times are changing and so are the people, but marketers are always there to respond to those changes.