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Don’t give your customers choice
We’re told today’s consumer is a choice-hungry free agent, always looking to switch to a better deal. If you don’t keep pace with them and offer them loads of choice and extras, they’ll ditch you.
But this overlooks a deeper truth. Customers want choice, but they don’t want to have to choose.
Making decisions is hard. Every time you have to make a choice between two alternatives, there’s a risk that you’ll pick the wrong one. And that’s stressful.
In behavioural finance, this is known as ‘regret theory’. As Professor Meir Statman observed with investment planning, if a client is faced with too many funds to choose from, they fear making the wrong choice and end up picking none. The same effect is seen ...
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