How to find the right number of options in choice architecture
And how the number of choices presented can influence consumer choices.
Here is the second article in a series where I am exploring the architecture of choices. The first article gives you a hint about how this story began. In this article, I will explore how the number of options can influence consumer choice.
First things first
The number of choices presented can influence consumer choice. We can’t move forward without an agreement for how many choices we offer to the user regardless of which options are the best.
On the one hand, we have the choice overload psychological phenomenon. Too many options could impact the decision making, lead to a decrease in motivation to choose and even discomfort to commit to a selection.
On the other hand, people nowadays face an ever-increasing number of options to choose from almost everything, and they feel attracted to this variety. Nevertheless, the greater the number of choices, the greater the likelihood that the choice set will include the optimal choice for any given consume. Limit the number of options could also make the user uncomfortable.
The ideal number of options to include is not an exact science nor derived from a magic formula. It depends on the user’s cognitive effort to evaluate the choices presented and the consumption patterns and subsequent needs between users. In the financial sector, we had research papers helping our first approach by telling us consumers faring worse with many options rather than fewer because of the topic complexity.
User decisions in the Digital Era
As consumer decisions move online, users rely more and more on recommendation systems and public evaluation for product and services, reducing the time and effort on information research. This online trend has the power to shape decisions by their way to present, rank and order the information.
In our case, we were facing a checkout process with limited time to conclude. And we wanted the user to proceed in the flow without prolonged pauses avoiding to lost data already submitted in the previous steps. In that case, we wanted to tell the users all the information they need to make the right choice most confidently.
The 1st battle was scheduled
So my first challenge was to reduce the list of options to just three. In this case, having a small selection very adjusted to the type of credit the user was about to make would work as a nudge. The user would feel confident about choosing one of the options brought to him by the bank that better than anyone would know what was best for him.
Furthermore, we had to keep in mind that a nudge is just a “push” and not an “obligation”. For this reason, one of the options presented would always be the possibility of moving forward without choosing an insurance solution.
We still have two other great opportunities to sell the user the best financial insurance options for their specific case.
Do you like this article? Follow me and stay tuned to my next publications. Do not forget to show some love by 👏 this article and sharing it.
References
Thaler, R. H., & Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness.
Scheibehenne, Benjamin; Greifeneder, Rainer; Todd, Peter (2010). Can there ever be too many options? A meta-analytic review of choice overload. Journal of Consumer Research. 37 (3): 409–25. doi:10.1086/651235. JSTOR 10.1086/651235.
Cronqvist, H; Thaler, R (2004). “Design choices in privatized social security systems: Learning from the Swedish experience”. American Economic Review. 94 (2): 424–8. doi:10.1257/0002828041301632.
