The Psychology of Choice: How to Help Customers Make a Decision

Have you ever experienced the situation when you walk into a shop, go to the aisle with the needed products, and feel completely lost, not able to choose because of the number of options?

This state is called choice overload, and according to research, around 46% of customers can’t complete a purchase because of it.

So today, we’ll explore the psychology that stays behind this phenomenon and how you can help your customers make a final decision.

How we choose

The branch of psychology that explores how we make choices, the factors influencing our decision-making processes, and how we evaluate the outcomes of our choices is called the psychology of choice. According to it, many factors can influence our decisions:

• our values
• emotions
• cognitive biases
• past experiences
• the context in which we are making the decision.

For example, we may be more likely to make impulsive choices when we are in a heightened emotional state, or we may be influenced by the opinions of others when making a decision. 

As you can see, decision-making is a very complex process that can be affected by a variety of conscious and subconscious factors. And the complexity of this behavior generates many paradoxes, the most famous of which is the paradox of choice.

The paradox of choice

The well-known "jam study" experiment conducted by psychologists Sheena Iyengar and Mark Lepper in 2000 demonstrated: having too many options can decrease the likelihood of making a choice and lead to decision paralysis.

In this experiment, psychologists set up a tasting booth at a grocery store and offered samples of gourmet jam to shoppers. In one case, they had a limited selection of 6 jams to choose from, while in another condition, they offered 24 jams.

The researchers found that while more shoppers stopped at the booth with a larger selection of jams, they were less likely to make a purchase. Only 3% of shoppers who saw more options of jams actually made a purchase, while 30% of shoppers who tasted the smaller selection made a purchase.

How customer decision-making influences businesses

The customer purchasing decision process can have a significant impact on businesses, as it ultimately determines whether or not customers choose to purchase a product or service. If clients leave without buying anything because they can't make the right choice, the business will not generate revenue. Also, your customers need to feel confident in their purchasing decisions. This will make them more likely to become repeat customers and recommend the business to others.

At the same time, the demands of your customers may seem controversial: they strive for more options to get a more personalized product, but too many choices make it hard to make a final decision.

So the main goal of marketers, product, and sales managers is to balance between these two ends of the spectrum and navigate your customer to the right item.

How to help customers to make the choice

Speaking about the factors that impact the decision to purchase, it is important to understand that not all of them can be addressed by marketers. Today, we will focus on 4 main problems the buyer may experience and analyze how a business can help to cope with them.

#1. Too many options

As we already mentioned before, choice overload can be one of the main reasons why making a final decision can be so hard. 

Depending on the complexity of the product, customers can spend up to several days learning about product features, comparing different options, and struggling to decide what product will satisfy them the most. 

How to solve

The optimal number of options to prevent choice overload can vary depending on the context and the complexity of the decision. However, research has suggested that limiting the number of options to between 3-7 is generally effective in preventing choice overload and increasing the likelihood of making a choice.

It doesn't necessarily mean you have to reduce all your product variation to 7 options. Just think about how you can reorganize your online and offline stores so they won't overwhelm customers with a million choices. Maybe rent a bigger showroom and section it, maybe hide part of the product option at the warehouse and rotate the options from time to time.

#2. Decision fatigue

Do you know how many decisions we make in a day? According to statistics, we make around 35,000 decisions daily. And each of these decisions takes cognitive energy. When people have to make a large number of decisions over an extended period, it leads to mental exhaustion called decision fatigue.

How to solve

To cope with decision fatigue, we tend to minimize the number of choices and simplify them. The study "Models of Man: Social and Rational” by Herbert Simon showed that people prefer simple decisions such as choosing the option with the highest payoff or the option that seems most familiar or has worked in the past.

So to help your customers, you need to make sure you don’t overload customers with information. Instead, try to make every decision, regardless of your business, as simple as possible. Try to:

• Highlight the most common option
• Personalize offers by using AI-based algorithms
• Offer clear categories, navigation, and filters.

#3. Imagination gap

When making a choice, people often rely on their imagination to help them evaluate the options and imagine the possible outcomes of each choice.

The imagination gap arises when people struggle to imagine the full range of possibilities that exist, leading them to make choices based on incomplete or inaccurate information. For example, a person may choose a certain brand of shampoo because it is familiar and well-known, even though there may be other, better options available that they are not aware of.

How to solve

To close the imagination gap, you need to help people to expand their imagination and consider a wider range of possibilities. This can be done through various techniques such as:

• Reframe the options
• Provide additional information
• Encourage creative thinking.

Moreover, images and visuals play a crucial role in bridging the imagination gap. They can help convey messages and ideas in a way that words alone cannot. Visualization tools can evoke emotions, capture attention, and communicate complex ideas in a simple and memorable way. Visuals can help to stimulate the imagination of the target audience and create a more compelling and engaging message. 

For example, when shopping for a renovation project, it's hard to imagine how this wallpaper or that tile will look in your interior. Tools like Wizart AR visualizer solve this issue by demonstrating finishing materials in customers' homes.

#4. Emotional state

Research has shown that emotions influence the way people evaluate options and make choices. For example, positive emotions such as excitement or happiness can lead people to take more risks or be more open to new experiences, while negative emotions such as fear or anxiety can make people more risk-averse and conservative in their decision-making.

Emotions can also influence how people evaluate options. When people experience positive emotions, they tend to evaluate options more favorably and perceive more benefits, while negative emotions can lead to a more critical evaluation of options and a focus on potential drawbacks.

How to solve

The emotions experienced by the client are an aspect that is quite difficult to influence. However, research shows that it is possible to change the consumer's emotional background using lighting, color and design, music, and smell.

For example, research has found that playing slower-paced music can lead customers to spend more time in a store, while faster-paced music can lead to quicker turnover and more sales.

In conclusion, understanding the psychology of decision-making is crucial for businesses that want to help their customers make a final decision. From the paradox of choice to decision fatigue and the imagination gap, many factors can affect customer decision-making.

By offering a manageable number of options, simplifying the decision-making process, providing additional information, and using visuals to bridge the imagination gap, businesses can help customers make informed decisions and ultimately increase customer satisfaction and loyalty. 

Following these steps, businesses can strike the right balance between offering enough options for personalization while also ensuring that customers feel confident and satisfied with their purchases.