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The Three Choices Effect

What is it?

The Three Choices Effect is the name given to a psychological tactic used by marketing strategists to influence consumer behavior.

Studies have found that companies that offer three variations of a product or service experience higher conversion rates than those that offer a wide variety of similar items (there are exceptions to this & they are discussed below).

Here are two examples:

How & where to implement:

While consumers appreciate a variety of options, this will depend on a few factors including:

1] The depth of their knowledge on the subject.

After seeing the movie Abominable, my daughter wanted a violin. I know nothing about selecting violins, so I went on Amazon to look at the options. There were too many. When faced with options showing different measurements and reviews discussing “vital parameters” I knew nothing about, we resorted to buying her an electric piano. To a violinist these 20+ options might not even contain the exact product they are looking for, to a novice there were too many options to make a confident purchase at their price point.

Amazon has found that most first time buyers perform a similar set of actions on their site. When browsing Amazon.com if you are flagged a first time buyer, in a niche hobby for example, you will notice that mid-way through the page Amazon shows you three recommended products to purchase.

Sephora directs their new buyers to sample kits which offer trial sizes of the mascara, lipstick, etc of several different brands; thereby allowing the buyer to try everything and develop an informed preference that equips them for future purchases. (1)

Thorne uses a series of quizzes to match new buyers with specific products (image below).

Photo credit: https://www.thorne.com/get-started

2] Mental fatigue.

Making decisions is tiresome. The more tired one is, the more impulsive their decisions tend to be. Impulsive is not synonymous with erratic in this specific case.

In the case of making decisions, when someone is tired they will fall back on whatever parameters, guidelines or values were baked into them quite some time ago. To address this you can use quizzes or product titles with common words.

What should you do if you have A TON of options for buyers to choose from?

Break the options down into categories:

  • dark denim vs. light denim,
  • fruity desserts vs. chocolate desserts,
  • dry red wines vs. full-body red wines,
  • a three-day intensive vs. a 12 week course
  • etc.

If the transactions occur online, you can use a quiz like Canon or Thorne (photos below) to filter out which three options to show to the website visitor.

Photo credit: https://shop.usa.canon.com/shop/en/catalog/cameras

Here are a few other examples of pre-purchase quizzes:

  1. Supplements quizzes by Thorne
  2. The “Speaker Recommender” quiz by Sonos

Is there a time when you should NOT use the three choices effect?

Yes. If your target market is “connoisseurs” in a very specific niche. Think about women’s shampoos. In most US big-box stores (like Target & Walmart) women can have up to two aisles of shampoos to choose from, while in these same stores men have roughly 1/4 of an aisle. To you, those shampoos may all seem the same, to a blond female with a sulfite allergy, this is where she comes to find two aisles that contain just 3 options that she can actually choose from.

If this is you, leverage quizzes and surveys to determine what your active buying market wants to purchase from you.

What if I am in the luxury market or sell to enterprises?

When it comes to selling products and services in both the luxury & enterprise spaces, the customer journey tends to be more of a conversation than a cut and dry choice of three menu options. In businesses like this, you would use three very different options to start the conversation and help the client refine their request to something you can offer.

Read more on this topic:

  1. https://www.gsb.stanford.edu/insights/are-consumers-turned-too-many-choices-not-yet
  2. https://www.kellogg.northwestern.edu/faculty/chernev/SSRN-id8875571.pdf
  3. http://chernev.com/wp-content/uploads/2017/02/ChoiceOverload_JCP_2015.pdf
  4. https://www.waitrose.com/content/dam/waitrose/Inspiration/About%20Us%20New/FINALWaitrose%20Food%20and%20Drink%20Report%202015%20EMBARGO%2021%20OCTOBER.pdf

Read more on pricing strategy:

  1. https://blog.hubspot.com/marketing/pricing-page-examples
  2. https://webflow.com/blog/pricing-page-examples

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