The More Levels, More Power Fallacy
Slicing a pizza into 12 pieces instead of 8 won’t give you more pizza. Surprisingly, such a pithy concept is not always obvious in different contexts. Offering customers more choices could mislead them about your product or have them walk away.
In the 1984 cult flick, This Is Spinal Tap, a character claims his sound system is louder because his volume dial goes up to 11 while everyone else’s dials topped out at only 10. (Fun fact: IMDB rates the movie at “7.9 / 11”; all other movies are rated up to only 10.)
In a study published in 2019, the researchers explored how the number of settings, e.g., blenders with 4 vs 7 speeds, influences judgments of a product’s maximum output. They found that consumers not only perceived a greater precision, i.e. more control over the device’s settings, but they often mis-attributed a higher maximum output in the product with more settings.
This “more levels, more power” mis-attribution happened despite the device’s maximum output specifications in watts. (Journal of Consumer Psychology, Nov 2019)
Offering too many choices can cause negative responses in other ways. E.g. carrying inventory of 50 styles of jeans might not lead to more revenue than if you simply offered 2 styles.
The logic is understandable – with more to choose from, each customer is sure to find a style that’s just right for them. After all, being able to choose from a wide variety epitomises the principles of free market, where consumers have the freedom to pick a solution that’s just right for them.
But we seldom behave rationally, especially when purchasing. Having too many options can lead to choice overload, mental fatigue and indecisiveness. When it’s hard to decide, it might be easier to just not decide.
Researchers at Columbia and Stanford universities published compelling findings in 2000: customers at a grocery shop were much more likely to make purchases of a promoted brand of jams after visiting a table of 6 jam samples than a table of 24 samples.
It also depends on where customers are in the buying process. A high choice variety early on can encourage exploration. But too many choices at the moment of truth – just before checkout – easily dissuades an indifferent shopper.
Each industry, product and type of customer is different, so finding the balance between too much and too little choice should be validated empirically. And once you’ve found the right settings in your business, don’t expect them to remain static.
Continual market research will help keep customers satisfied and coming back for more.