Sheena Lyengar: How to Make Choosing Easier
We all want customized experiences and products -- but
when faced with 700 options, consumers freeze up. With fascinating new
research, Sheena Iyengar demonstrates how businesses (and others) can improve
the experience of choosing. Identify four of the methodologies Sheena Iyengar
suggests as methods of helping us improve our experience in choosing. Discuss
the implications of two of these methods in terms of your own decision-making
as an individual and a member of an organization. How else can you improve your
ability to decide? What are the impacts if it is a mistake?
CUT:
Iyengar is a big proponent of the old adage “less is
more”. She explains that companies need to cut extraneous, redundant items. By
doing this, companies can increase profits and sales while lowering costs.
Iyengar shows the practical benefits of cutting through several brands that cut
the amount of products offered and how they either increased sales or decreased
costs while increasing their overall profitability. She makes an interesting
point about the difference in the number of products a super market, Wal-Mart,
and Aldi offers. I know several friends and family who prefer shopping at Aldi.
I have never asked them the reason they prefer this store, but it would be
interesting to hear their responses. By eliminating the number of choices
presented, Iyengar shows how consumers will be more likely to make a choice. In
a similar video, Barry Schwartz discusses the paralysis of too many choices. In
the video “The Paradox of Choice”, Schwartz offers almost identical
information. They both reference financial decisions, but Schwartz’s example of
health care decisions really shows the importance of getting people to make
decisions. In order to make decision making easier, the number of choices needs
to be reduced.
Concretization:
Iyengar says that we need to “make it [decisions]
vivid.” She suggests that in order for people to understand the difference
between the choices, they have to be able to understand the consequences of
each choice and the consequences need to be felt in a vivid sort of way, in a
very concrete way. Her example of debit/credit purchase is spot on. These types
of purchases are 15-30% more than cash purchases because it doesn’t feel like “real”
money. From personal experience, I know exactly what she’s talking about.
Seeing $100 on a screen is very different from handing a cashier a $100 dollar
bill. While it’s still $100 that is being spent, the idea of something being
“real” versus “perceived” is a great point. In order to help people make
decisions, we need to make things feel “real".
Categorization:
Iyengar shows that people can handle more categories
than choices. While having too many choices can be paralyzing, by organization
those choices into categories makes the customer feel as if they have a better
decision making experience. It is interesting that even though too many choices
can deter the decision making process, having more categories enhances it.
Iyengar uses the example of a magazine aisle. Once again, this is something
that we can easily relate to. We see the magazine aisles and how crazy they can
be. But when they are sectioned into categories, we can easily search for the
category we want and then select a magazine. The last point Iyengar makes is
that categories need to say something to the chooser, not the choice maker.
While categories can be a great tool to help us make decisions, categories need
to actually matter to the once who is choosing.
Condition
for complexity:
Iyengar suggests that we are able to handle a lot of
information better than we think we can. Instead of bombarding a person with
too many choices in the beginning, we need to ease people into decision making.
She uses the example of purchasing a car. The car manufacturer allows
customization of almost every part, from car color (56 choices) to gear shift
(4 choices). In her study, she found that if people started with the choice
with the most choices, people were unlikely to make a decision and just choose
the “default.” However, if people started with the choice with the least amount
of choices, they are far more likely to keep trying to make decisions. If the
choices start off easy, then people are learning how to make a decision and
will be more likely to make decisions.
I am a huge fan of cutting the number of choices for
the decisions we make, more so when my two girls think those choices are
McDonalds or Chucky Cheese. Have you ever had this conversation?
“What do you want for supper?”
“I don’t care, you decide.”
“What are my choices?”
“Just pick something!”
While this is a semi-silly example, it illustrates how
having so many choices before us can make us unwilling to make a decision. We
could eat out or at home. We could eat Mexican food, Italian food, Chinese
Food, etc. At my house, we play a game with our girls. Tina and I pick three
restaurants a piece. We each get to veto until we narrow it down to one each.
Then we make the decision from those two choices. This illustrates how
narrowing down our choices helps us our make decisions.
The second technique that I would like to use more is
concretization. We often make decisions at work that have no immediate impact
or consequence. For example, we recently made a decision to not include a
module in our first release. We vetted it with our leadership and stakeholders
and everyone agreed. However, at our last demo, our stakeholders brought it
back up stating that they couldn’t use the application without that
functionality. They made a decision, but the impact of that decision was not
evident until much later in the process. Had we made the decision more concrete
and made it more vivid the consequences of not including that functionality, we
might have put our stakeholders in a better position to make the best choice.
One additional item that Schwartz talks about is
making decisions with the “opportunity
cost” in mind. This deals with the idea that the decision we made wasn’t
the best and the other options were better. This can cause us to continually
question our decisions and the what-ifs. While I’m a big proponent of lessons
learned, we must be careful that we don’t live in the past always afraid that
we made the wrong decisions. A manager once told me that making no decision is
worse than making the wrong decision. This is a very profound statement that
helps me realize that while decisions shouldn’t be taken lightly, we must be
able and willing to make choices and move forward. Even if it’s the wrong
decision, we learn and go forward. These lessons help us with our intuition and
future decisions. In the words of Iyengar, “We need to be choosy about choosing.”
References:
Iyengar, S. (2012). How to make choosing easier [Video
file]. Retrieved from
Schwartz, B. (2006). The paradox of choice [Video
file]. Retrieved from
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