How should Marketers think about The Psychology of Consumer Choice?
An Interview with Author and Behavioral Scientist, Richard Shotton
Consumer choice is a complex topic. On the one hand, consumers claim they want options. But on the other hand, there’s evidence that too many choices can make it less likely that any option will be selected. More confusing still, in certain situations, more options actually make it more likely than an option is chosen.
How can we reconcile all of this? How should brands think about the psychology of consumer choice?
In this interview, I speak with author and behavioral scientist Richard Shotton who has thought a lot about this question. His new book, The Illusion Of Choice: 16 ½ Psychological Biases That Influence What We Buy, explores the complexity of consumer choice, and how marketers can harness these insights.
As we’ll see, choice has a special place in consumer psychology. And brands that can harness these insights can unlock immense value.
The topic of choice in consumer psychology is a big phenomenon to unpack. On the one hand, consumers claim that they want choice, but there’s evidence that giving them more options can be very negative - the so-called paradox of choice. How should brands think about choice?
I think that's an interesting question in behavioral science. Firstly, it raises the question for businesses that adding more and more choices might backfire.
Much of this thinking on the psychology of choice comes from the famous jam study. The study takes place in a shopping mall, in which the researchers set up a booth with several different jams for people to buy. What they find is that, when it comes to choice, less is more: When they only present six jams, consumers were ten times more likely to buy, compared to the other condition when they set up 24 different varieties.
It’s a great, unintuitive claim that takes the field by storm.
It turns out though, that this was just an initial finding - there was much more nuance to come. Later experiments on different things, in different consumer contexts, did not find such dramatic results. And some researchers found that actually reducing choices, reduces sales. In these cases, less is less.
So when it comes to the psychology of consumer choice, sometimes less is more, and sometimes less is less. How can we reconcile these?
First, it was the paradox of choice. Then there was doubt about this idea, and a renewed appreciation for choice.
Then you move on to the third iteration, which is when people start doing meta-analyses and examining the findings across many studies. Ultimately, this produces a much more nuanced point of view. The study that I referenced in the book is by Alexander Chernev, where he looks at a wide range of studies, and effectively says, “Yes, well, sometimes choice works. Sometimes it doesn't. And sometimes you reduce choice and boost sales, sometimes reduce choice and reduce sales.”
But crucially, he observes that it's not random: there are predictable situations in which choice paralysis occurs, and you, as a brand, should consider reducing your offering. For example, if the choice is poorly laid out, less choice is better. If people find the choices difficult to evaluate, fewer choices are better. And if people aren't familiar with the options, less choice is better.
There are many more variables, but to me, the broader point is that this is a much more sophisticated place to end up, which is going back to our initial debate or that context is essential. The influence of these biases will vary from moment to moment.
How has this slow, evolving science of choice impacted marketing?
What I think is most fascinating about this question of choice is that the psychology of consumer choice has slowly evolved, and marketing practice, to a certain extent, has tracked this evolution.
There was this evidence supporting this idea of the paradox of choice, and many marketers who in were in tune with behavioral science took this to heart. They avoided adding excessive choices. Adding in options, even if it's what the consumer says they want, is not necessarily a good idea. The worry was that if you make the act of picking too onerous, people may procrastinate, walk away, or just go with a default option.
But then, this second wave of findings showed that choice could actually be positive. And quickly, this trend of reducing choice fell out of fashion. People thought it was not as relevant as once believed. So you've got this kind of euphoria from the initial finding, and maybe people overestimating the impact, then you've got a reaction, which is probably too extreme, which is to think the bias is irrelevant and doesn't exist.
Fast forward to now, and the consumer science has gotten much more nuanced. And marketers have begun to take note. We see choice deployed much more intelligently, and tactically.
Overall, I love that journey of choice paralysis, which, I think reflects the development of behavioral science: from euphoria, to cynicism, to nuanced, actionable insight.
How can brands with a large range of products grapple with this aspect of consumer psychology? How can brands offer choices and options without overwhelming the consumer?
Amazon is the perfect example. They might have a million books or 10 million books. Of course, you can’t show them all at once. This would totally overwhelm the consumer. Instead, they give you a latent election. And then they make it easy for you to pick even from the six or seven, they show you. They give you all sorts of easy shortcuts to make the decision easier, such as listing something as “Amazon’s Choice”, or other cues to make picking easy, whether it's social proof or an appeal to authority.
The other implication is that sensitivity to choice prices varies significantly from consumer to consumer. A consumer’s level of expertise, or familiarity with the industry, will make a big difference. For example, if you’ve bought a house 5 or 6 times before or work in real estate, having a wide selection of mortgages will probably work very well. But if it's your first time, you might want to limit that to two or three, and then receive very clear guidance from the mortgage broker about the pros and cons of each.
Ultimately, it’s about improving the choice architecture and helping guide easy, informed choices. And then secondly, tailoring the ideal amount of choice between for those who are familiar with the product, and those who aren't.
As if the psychology of choice isn’t nuanced enough, there’s also the ‘but you are free’ principle, which underscores the importance of consumer agency: giving someone the option to decline can make it more likely that they’ll agree. Why does merely reminding someone of their autonomy influence their decision-making?
That was one of the most interesting findings that I came across while researching the book, which was how important it is for consumers to retain a sense of agency or control.
Much of our understanding of the ‘but you are free’ effect comes from a study by Nicolas Gueguen from South-Brittany University, and Alexandre Pascual from The University of Bordeaux.
The general finding was later supported in a much larger meta-analysis, but the basic setup of the original discovery is about asking people for spare change. The researcher approached people at a bus stop, and asked them for spare change to take the bus. In one condition, he simply asks, “can I have 20 cents?”. In the other condition, he also asks, “can I have 20 cents?”, and adds, “but you are free to decline.”
And in that second scenario, he sees a markedly higher degree of acceptance. In fact, it's almost a doubling in terms of people who agree. He also sees an increase in the amount of cash they give. What's most interesting is that, of course, in both scenarios, the member of the public always had the opportunity to decline. So all he's doing in his attempt to win them over is drawing attention to that and emphasizing that freedom.
What are some specific ways that marketers can apply this principle of ‘free to decline’? How can consumer autonomy actually improve marketing effectiveness?
To me, this principle of consumer autonomy is fascinating for anyone involved in a negotiation. Anyone who is trying to deal with a customer, should keep this in mind: Remind the customers they have that they have a sense of agency, that they have that sense of control. If you do, they're more likely to agree to your request. It's a really simple idea, but it can have a profound impact.
Secondly, marketers will often try and hide obscure a consumer’s autonomy; they’ll intentionally hide that stuff in the terms and conditions. They don't want to mention it when a consumer signs up for say, a subscription plan, because they’re worried they’ll be more likely to cancel. But the lovely thing about this is that it combines ethics and effectiveness. As a marketer, you can sleep easier at night, and you're also more likely to get a consumer’s acceptance.
More from Richard Shotton, on The Psychology of The Press for Champagne Button, and The Power of The Red Sneakers Effect
Photo by William Felker on Unsplash
About Richard Shotton
Richard Shotton specialises in applying behavioural science to marketing. He has worked in marketing for 23 years and helps brands such as Google, Facebook, BrewDog and Barclays with their challenges. He is the author of The Choice Factory, a best-selling book, which explains how behavioural science can solve business challenges. His latest book, The Illusion of Choice is out in March 2023. In 2021 he was made an honorary fellow of the IPA and an associate of the Moller Institute, Churchill College, Cambridge University.
References for The Consumer Psychology of Choice
Chernev, A. (2012). Product assortment and consumer choice: An interdisciplinary review. Foundations and Trends® in Marketing, 6(1), 1-61.
Gueguen, N., & Pascual, A. (2000). Evocation of freedom and compliance: The “but you are free of…” technique. Current research in social psychology, 5(18), 264-270.
Guéguen, N., Joule, R. V., Halimi‐Falkowicz, S., Pascual, A., Fischer‐Lokou, J., & Dufourcq‐Brana, M. (2013). I'm free but I'll comply with your request: Generalization and multidimensional effects of the “evoking freedom” technique. Journal of Applied Social Psychology, 43(1), 116-137.
Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing?. Journal of personality and social psychology, 79(6), 995.
Pascual, A., & Guéguen, N. (2005). Foot-in-the-door and door-in-the-face: A comparative meta-analytic study. Psychological Reports, 96(1), 122-128.
Shotton, R. (2023), The Illusion of Choice: 16 ½ psychological biases that influence what we buy, Harriman House
