Keynote presenter, Dr Mike Baxter, revealed that more choice can equate to less sales during his session at a4uexpo London. He even went as far as to say there were 90% less sales in sites with a greater number of purchasing options.
The debate-fuelling remarks came about because of findings from S Iyengar & M Lepper 2000. J Personality & Social Psychology 79: 995-1006. The research was discussed in Baxter’s Getting Personal to Drive Conversion - Customer Behaviour Meets Big Data keynote session.
Several notable points were highlighted in the presentation about the psychology behind purchasing. Of particular interest was how consumers cope with excessive choice by buying the same as they always do, no matter how many options you place in front of them.
Alternatives can negatively impact sales
Baxter pointed out that the negative effect of opportunity can cost. Professor Barry Schwartz agreed in a passage from his book, The Paradox of Choice. “As the number of options goes up, the attractive features of the rejected alternatives accumulate and the satisfaction with the chosen alternative goes down,” he said.
Another quote, this time from Haubl & Murray, 2003. Journal of Consumer Psychology, 13: 75-91, pegged consumers as a spontaneous bunch. “Consumers don’t have well-defined, pre-existing preferences that are merely revealed when they make choices,” said the book’s authors. “Instead, they construct preferences on the spot when (prompted) to make a decision.”
Purchases lack rationality
Consumers aren't completely without pattern, though. Baxter did say that they make intuitive, emotion-based decisions with little or no rational thought involved. They also construct decision-preferences during the decision-making process and convert only when the choices have been made manageable.
Some practical advice came towards the end of Baxter’s keynote. He opined that the way customers actually form a decision leads to great conversion opportunities, whether they’re through features such as constructed preferences and recommendations.
Publishers and advertisers alike can give customers the option to personalise their own journeys in such a way that it’s conducive to conversion. Baxter said that personalisation could only come from big data, but even that must be reduced to meaningful insights so content, promotions and communications could be tailored dynamically.