Consumer choice is good… until it leads to buyer’s remorse

Product Success Deck

It’s a classic business misstep that even the biggest companies continue to make: Giving the customer too many choices.

I’ve long been a subscriber to the business theory that less is more. It’s really quite a simple concept. If you give someone too many choices, it’s harder for them to make a decision. And when they do make a decision, they are actually less satisfied (no matter the decision) because there tends to be a questioning over the purchase. Was the other model a better deal? Should I have paid extra for the upgraded model?

When your choices are limited, chances are better that you won’t have buyer’s remorse. Yours was an educated decision based on what you needed, what you could afford and what was available. And you feel good about.

That’s a win for the consumer. But what about the company that’s selling the product. Can less be more for that company, as well? Of course it can. Look no further than Research in Motion, the maker of the Blackberry smartphone, to understand why too many choices is bad for business.

The company has products on the market for every carrier, every size, every shape, every feature, every color – and yet, no one seems to be buying. Certainly the lack of customers has much to do with the fierce competition that Blackberry is getting from Apple’s iPhone and Google’s Android smartphones but the company hasn’t been able to stay competitive, in part, because it has too many models.

How many models? The New York Times notes that the company has introduced 37 models since 2007 but has acknowledged, in a statement, that it did not know how many models were actually on the market. (Yes, I realize that Android phones also come in many shapes and sizes – but Google isn’t the hardware maker for its own smartphone software the way RIM and Apple are.) The company has said that it’s reducing the number of models and will focus on sales of existing ones.

In his 2004 book “The Paradox of Choice: Why More is Less,” psychologist Barry Schwartz explores the idea that our personal happiness can be compromised by having too many choices in life’s experiences. The problem is intensified when consumers are forced to choose between many desirable options and start making hypothetical trade-offs. Then, they evaluate based on the opportunities they missed, instead of the potential satisfaction they’ll find with the product they did select.

The regret over those trade-offs can lead to buyer’s remorse, which in turn can lead to returns – and no company that sells products to consumers wants their customers to regret the decision or return the product.