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What Every Great Internet Marketer Knows About Choice
When faced with the challenge of deciding on what choices to offer customers, inexperienced internet marketers usually take a "more is better" approach. If, for example, they are selling a subscription to a newsletter, they might offer 3-month, 6-month, and 1-year options . . . and, while they're at it, throw in 2 years and maybe 3 years too. It just "makes sense," they figure, that the more choices they provide, the more appealing it will be for the customer. Right?
Wrong!
"It is only logical to think that if some choice is good, more is better," says Barry Schwartz, a professor of psychology at Swarthmore College, writing in the April 2004 issue of Scientific American. "Yet recent research strongly suggests that, psychologically, this assumption is wrong. Although some choice is undoubtedly better than none, more is not always better than less."
One of the main points Dr. Barry Schwartz makes in his book, "The Paradox of Choice: Why More is Less", is that when you give people too many choices, you remind them that they can't have everything in life. In choosing one thing, they must give up everything else. And, as a result, they are less satisfied with the decision they made. This phenomenon is known as "opportunity cost" -- looking at the psychological cost of an item from the perspective of what you had to give up to get it.
Clearly, there's a whole lot of science to support something that marketers -- especially those of us with direct-mail marketing expertise -- have learned through experience. As Bob Bly explains in his book "The Complete Idiot's Guide to Direct Marketing", it's a bad idea to offer your prospects too many options. "The reason is," he says, "the more options you offer, the more difficult it is for the prospect to make a decision."
How many options, then, should you offer your customers? What is not enough? What is "too many"?
There is no single answer -- but three is a pretty good number to start with in your internet business.
Thousands of direct mail and e-mail tests have shown that customers buy more and return less when they are given two choices rather than one, and results tend to be even better when they are given three. Though some offers work well with four and five choices, those are the exceptions.
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