Human decision-making can be complex, but there are guiding principles that help us better understand it. For instance, even the presentation of a choice can influence the way decisions are made. That’s called “Choice Architecture.” This concept is an essential tool in influencing customer behavior, because designs can be varied to optimize the desired outcome. Here are 3 different ways choice architecture can be utilized to influence customer behavior.
1. Default Choices
People are unique and desire personalized experiences, but they generally don’t like to make choices. Often, they use social norms and other cues to aid in decision making. In order to avoid making the wrong decision, they do what everyone else is doing: they make the default choice. For example, when buying a novel online, many people just choose the one marked “best seller.”
However, default choices are not fixed, and people can and learn to change their behavior if they feel the default option is not to their advantage. A common example of this is default software that automatically installs an unwanted toolbar on your browser. Over time many people simply opt-out of making the default choice.
2. Limiting Choice
By offering a single product, many companies take the decision making out of having to choose for the consumer. Take, for example, WD-40, Red Bull, or even Canes. The brand name has become synonymous with the product. It’s also important to note that presenting the consumer with too many solutions – as in too many brand extensions – may result in poorly conceived choice architecture. For example, many food brands release low-fat variants. This can impact the original version by implying that it is unhealthy, and can also carry the connotation that the low-fat version has sacrificed flavor for health. This has the unintended consequence of leaving the consumer confused and they may go to another brand.
3. Extra Choices
Brands with two choices can reframe them to make them look more advantageous by adding a third (or extra) choice. For instance, a magazine offered an online-only version for $59 and a print and online version for $125. Most people chose the cheaper online-only version. But when a third, print-only $125 version was offered, sales of the print and online version suddenly jumped, increasing the overall value of subscriptions. The print and online version look like a deal at $125 compared to the print-only version for the same price. Buyers were moved from a ‘money saving’ frame to a ‘value maximizing’ frame. Both can be considered rational choices.
Choice architecture and the implication for online shopping
Guide your customers to choose the item you want them to buy using good choice architecture. Poor choice architecture in online retail can drive your customers away. Consider the following:
Anchoring – Give customers a frame of reference and guide their purchasing decision. People tend to be indecisive, so price plays a large role in purchasing decisions. Comparing prices allows a customer to determine if a price is too high or too low and come to a decision. For example, when offering an online subscription for software, highlight one price package in the middle range to make the decision easier.
Another way to use anchoring is with an add-on. By anchoring in the add-on item, you can get customers to choose a more expensive option than what they may have chosen otherwise because they are already on your site and it’s convenient. Buying a printer and ink cartridges in one transaction on the same website saves time. It may be cheaper to wait and buy the cartridges from Amazon, but people rarely do.
Tyranny of Choice – Sometimes too much choice can result in anxiety, which leads to indecisiveness and lost sales. By guiding customers through a limited number of choices, the online retailer makes the process of choosing seem more manageable. Ecommerce web sites can achieve this by presenting shoppers with broad categories first (e.g. jackets, shoes, pants) and then narrowing down the colors or features from there instead of presenting too many products all at once.
Social Herding – People tend to make the same choice as others because it provides validation. Placing a “best seller” call-out beside an item with multiple options puts peer pressure on the buyer to buy a particular thing even if the price point is above what they’d typically be willing to pay. The thinking is, “after all, if it’s a bestseller, others must have been happy with that choice and therefore, I will be too.”
There are several ways to design choice architecture into your website:
Provide default options – If three different shipping options are provided – Standard (free), Next day (with cost) and Next day, (free with membership registration,) you could make one of the options the default, in other words, the one you want them to select. You just have to make sure the default option is not always the most expensive one or you may unintentionally drive customers away.
Provide Feedback – It’s vital to offer reinforcing feedback along the check-out process – this helps them move in a positive direction towards the buy button. For example, after a customer adds a product to the cart, you can suggest they check out and pay or continue shopping.
Anticipate Errors – Your customers will make mistakes during the checkout process and it’s important to make sure they are avoided. For instance, is the site designed so that it is easy to delete an item from the cart accidentally?? A workaround would be to have a “Are you sure you want to delete this?” message pop before they can actually delete it.
Choice architecture is a delicate balancing act. Providing a choice can make the consumer feel in control; however, too many options can make them bewildered. Customers need help making good choices and choice architecture should help them make informed decisions that they feel happy about.
