The Paradox of Choice – Why Fewer Choices Bring Higher Sales?

Dalibor Šumiga Behavioral marketing/Neuromarketing, Marketing

social media marketing, brand management, influencer marketing, advertising, behavioral marketing, digital marketing

There’s probably not a lot of people who have shown an interest in behavioral marketing and haven’t heard of the jam experiment.

Exposed to a choice of 24 jams, only 3% of customers ended up buying a jam.

Exposed to a choice of 6 jams, 30% of customers eventually bought the jam.

This experiment shows a phenomenon we call the paradox of choice in consumer psychology.

social media marketing, brand management, influencer marketing, advertising, behavioral marketing, digital marketing

Still, if you ask customers, most will tell you that a large selection is one of the essential factors when they choose their place of purchase.

But day-to-day research shows that customers aren’t always able to communicate their real motivation, so it’s crucial to do continuous behavioral analysis before your brand starts losing money.

As follow-up, I will show you 2 examples from campaigns run by Promosapiens, which show the effect of the paradox of choice, the problem of hidden motivation and consequently misplaced strategies.

It is important to note that I’m citing 2 examples here because of the length of the blog, not because these are isolated cases.

CASE NO. 1

A client who decided to entrust Promosapiens with running a digital campaign did a market research to find out the main reasons for buying their products/services.

Among the top 3 reasons was the broadness of the products and services they offer (over 70% of respondents cited broadness as an important factor in their purchase decision).

However, a behavioral analysis conducted by Promosapiens during the development of the digital strategy showed that over 80% of revenue came from the top 7 products that make up less than 10% of the total supply.

social media marketing, brand management, influencer marketing, advertising, behavioral marketing, digital marketing

CASE NO. 2

A client for whom Promosapiens has been running a Google ecommerce campaign for years decided to enter the following year with an identical budget, but with the goal of increasing revenue through Google channels by 30%.

Our condition for accepting that goal was that we could choose which products to advertise. We conducted a thorough analysis of shopping habits – time of day, season, days of the week, temperature differences, regression analysis of top products by income, profit margin, etc.…

Out of 1,500 products we then selected 50 of them that we advertised in the period of the following year.

Revenue through Google channels in that year increased by 76%, and the change in strategy itself had a positive effect on the total revenue of the webshop.

At every point of planning your marketing and/or sales strategy you need to keep in mind that the brain does not like complicated things because they consume too much energy.

Every decision you put in front of your customers must be simple because an abundance of new information causes a cognitive overload.

social media marketing, brand management, influencer marketing, advertising, behavioral marketing, digital marketing

What does cognitive overload look like?

You can check for yourself what a cognitive overload looks like on a very banal tapping test. You need a partner who will be the respondent or who will monitor your reaction. Set a task for the respondent, for example to write a certain email to a person or to play a game on a smartphone. This task in itself, since the person does it every day, will be very simple, but try to repeat the same task with one small addition – tap your foot every second, at as regular intervals as possible, while solving the task.

Try it for yourself and experience cognitive overload first hand. This is how your customers sometimes feel when you offer them too much information.