Thoughts & Notions

Option Paralysis

What happens when consumers are faced with too many options? Depending on the urgency of the purchase, this can result in commoditization (“They’re all the same. This one’s the cheapest.”) or failure to make a purchase at all (“This is too confusing. I need to do more research… Do I really need this? I don’t have time…”). Consumers say they want more choice. However, research paints a different picture. Too many choices have the tendency to paralyze consumers. This isn’t only true within categories, but also within brands. It’s why with over 500 channels, there is never anything to watch on TV. Psychologists call this phenomenon “Option Paralysis” and it is happening more and more often in every sector of commerce. So what can companies do to ensure consumers have adequate choice, but aren’t overwhelmed with options? In 1995, Dr. Sheena Iyengar, professor of business at Columbia University, set up a booth of jams in a boutique market. Every few hours, she reduced the number of available options by 75% (from 24 to 6). As you can see from the results of the study in the chart below, people are attracted to choice, but are motivated to purchase by smaller, more distinct choice sets. Obviously, jam is an impulse purchase. However, what is true of low involvement decisions is also true of high involvement decisions, people want to make the “right choice.” Granularity over complicates the decision process by making it difficult to discern one option from another. The key is to provide enough choice so as to present options, but also to ensure clear division within that option set. Think Small, Medium and Large, not 6 ounce, 8 ounce, 10 ounce, 12 ounce, 14 ounce, 16 ounce… and so on and so on. As you can see, the SM, M, LG set provides clear options (two extremes and something in between). The other example provides little differentiation within the choice set (“Am I 12 ounces thirsty or only 10?”). Many marketers make the mistake of pitting themselves directly against their competition. This is not brand positioning. It’s a street fight (the result of poor, if not nonexistent, differentiation within choice sets). This greatly contributes to Option Paralysis. You may hurt your competitor, but at what cost? Overcoming Option Paralysis is about Brand Positioning, and Brand Positioning is about disrupting the status quo to stand for something that not only stands out but addresses a unique consumer need in a way that no other brand can. This creates contrast and that’s what branding is all about: Differentiation (“This one stands out.”) and Identification (“That’s the one I was looking for.”).

17 Responses to “Option Paralysis”

  1. "disrupting the status quo to stand for something that not only stands out but addresses a unique consumer need in a way that no other brand can" – this is basically an argument for the usp, one of the oldest tools we have a strategists.

    There is an @mweigel article that has really started to challenge the usp in my mind however. http://martinweigel.org/2012/03/19/why-being-inte

    Basically he presents data that says that sameness is actually ok and should be leveraged. It is the emotional connection at purchase that is most effective not the rational one on which a usp is ultimately based. He says: "Contrary to the theory of brand positioning, there is a good amount of evidence which suggests that people don't have to think of a brand as being different to come to buy it. They just have to think of it at all."

    I have been thinking a lot about usp based positioning recently because of this point. We all know the actual causal path of decision making forgoes the conscious part of the brain so why do we then leverage rational positioning (aka: the usp in my mind) to sell things? Setting something up as different is ultimately, a rational position. This is unique and that is not etc. It’s the emotional subconscious rooting that moves the consumer when presented with choice. That is the most powerful tool we have.

    The first half of your post seems to actually support this point but then at the end you make the statement about "unique" and "differentiation". I see a bit of a conflict there.

    Thoughts?

  2. blackcoffee says:

    John,

    I believe that the reason you see a bit of conflict in the beginning and latter half of our statement, revolves around a difference of opinion in what "differentiation" means.

    Let's consider the history http://www.blackcoffee.com/brand-related/brand-ar… In the beginning, consumers had few choices. First their decisions were based on the quality of the product (this soap get things cleaner), later the function of that product (dish soap vs. laundry soap vs floor soap vs…) and more recently the emotional connection with the product/brand (we're an Ivory Soap family, My Mom used Ivory Soap). This doesn't mean that functional and emotional benefits are mutually exclusive, nor does it imply that the functional benefit can't be emotional.

    There is a world of difference between mind share and market share. I believe that the author of the post you referenced makes some rather bold assumptions based on an underlying assumption that "branding" is synonymous with "marketing- and adland." He sees positioning solely as "messages and USPs" (ALL of his examples are AD campaigns). This is a very narrow view of what a brand is and the true value it provides the business and the consumer.

    Brand positioning is not a question of “What should we say about our brand," or even "How do we differentiate from our competition," but rather "How we will address the NEEDS of the market in a way that no other brand can?" Those needs may be emotional, they may be functional. However, they are most likely a mix of the two. The former builds a connection while the latter validates the decision.

    Think of it in scientific terms. Can we disprove the theory? NO. If you're not different, you are, by definition, the same.

    And, no one ever paid a premium for "the same" unless it was out of convenience (oh, wait! That would make it different).

    I don't meen to make light of Martin Weigel's post or you're own point of view. I enjoyed both. We just see branding through a different lens. To us, it's not just about "sales and promotions." It's about the business' Raison d'être.

    Thanks for sharing your thoughts and perspective.

    Cheers

    Mark Gallagher
    Brand Expressionist®

  3. Tom Asacker says:

    Very sound argument, which can be summed up by stating that great brands appear to have no options.

    • blackcoffee says:

      Interesting. You've got me thinking how the goal of any brand is to remove itself from the competitive set. However, some do it metaphorically while others do so physically, such a juice that's sold with produce or pickles sold in the refrigerated section. These brands literally rule out the competition by standing apart.

      Thanks for posting.

      Cheers

      Mark Gallagher
      Brand Expressionist®

  4. ken peters says:

    I agree with Tom. The goal is not to compete in a category, but to be the category; to position your brand in the consumer mind as the only real choice.

    I've encountered paralysis in a couple different ways lately. I'm in the market for a new car, and as soon as I began looking I was overwhelmed by the choices. Even as I tried to pair things down it actually became more overwhelming. Not only are there too many vehicles to choose from, but the various option packages for individual cars can be staggeringly confusing. I was interested in a particular car, but so annoyed by the various option and package possibilities offered that I gave up looking at the web site and decided against them because it was all too confusing.

    • blackcoffee says:

      I really like the way VW has been marketing their vehicles which i can sum up as "Limited options, because most are standard." I have to friends who both recently purchased VW TDIs because it was easier (less to think about).

      In both cases the comment was "I want great mileage and reliability, but there's no way I'm driving a Prius." There aren't many cars in that category.

      As always, thanks for sharing your thoughts and insights.

      Cheers

      Mark Gallagher
      Brand Expressionist®

  5. Eric Schulz says:

    The idea of Option Paralysis goes hand in hand with a concept I call the Law of Laziness. Consumers are lazy. They don't want to make a decision. Once they have decided upon a product in a particular category as 'their brand', it's almost impossible to get them to switch to another. Thus, the only way to disrupt marketplace equilibrium is to introduce a new product or service SIGNIFICANTLY different from what already exists. It's not about giving the consumer MORE choices. It's about providing the RIGHT choice.

    • blackcoffee says:

      Eric,

      I couldn't agree more. We like to say that it's the difference between making a deduction (I have weighed all the options and deduced that…) and making a decision (Starbucks?). The former requires a lot of work, while the latter answers the question. The question is more than just "coffee?" It's which coffee brand best aligns with my own tastes (aesthetically, experientially and, of course, there is the actual taste of the coffee).

      Thanks for contributing : )

      Cheers,

      Laura Savard
      Brand Expressionist®

  6. Kris says:

    The comments as to too many choices and making the "right choice" (hit the hammer on the head as one of my "issues") resonated with me. When set apart and the USP is clear it's much easier to make a choice (like the juice with the produce concept. When faced with many.. harder.

    I'm typically very brand loyal – although the economy has expanded my view of what store brands are equal to the big boys. However I also find myself paralyzed when thinking about what is the "accepted" brand – and find this "accepted" brand to be a trend in itself.

    Take the cell phone user who doesn't need/want a smart phone (for whatever reason), but who gets pressure to purchase the iPhone or Samsung due to peer/culture pressure. (You're not cool if you don't have one, If you don't have one, you're not living fully (missing apps/options.) I wonder where the true meaning of brand identify falls here.. Are you differentiating the brand as an Apple or Samsung (Just love those Samsung Galaxy ads poking fun at the new Apple lines) Or are you branding as the "accepted" lifestyle….

    Do you agree/see this as well?

    • blackcoffee says:

      Kris,

      When it comes to choices, sometimes two is too many. Some part of us identifies with each offering and therefore we see value in what each has to offer. The problem expands as the category grows until finally we're overwhelmed.

      In many ways, brand loyalty is just our way of cutting through the clutter and reducing risk. On another level, it's a reflection of who we believe ourselves to be and what we value.

      Thanks for sharing!

      Cheers,

      Laura Savard
      Brand Expressionist®

  7. I do agree with your post. Price of a product will get increased according to demand. At some point people will find difficulties to take a right choice. It is good to provide enough choices so as to present options. That can increase the rate of purchase. Thank you for sharing.

  8. ..buying handmade helps the flow of income in the community since the artists usually buy their supplies locally…

  9. Ben Smith says:

    Another sound cool allocation about Paralysis and whatever information you have shared here about this issue seems to me very sound from all side and I will come here again for everything. Thanks

  10. This is a worth reading article on Option Paralysis.

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