Choices, Choices, Choices….

Choices, choices, choices…. that is the subject of THIS ARTICLE in the current issue of The Economist.  This is a great read if you have some time over the holiday weekend.  The gist of the article is that despite a growing number of choices at the grocery store, mall, bank, internet etc. many consumers feel overwhelmed and decide not to buy at all.  In essence, as producers bring increased customization to market they are actually harming their ability to sell product.

This got me thinking about my process with prospective clients.  I take great pride in providing my clients with a thorough overview of their loan options based on their individual objectives.  However, after reading this article I now feel like I might be overwhelming them.

If you have any suggestions for me please leave them in the comment section below.

Otherwise, here are a few interesting excerpts from the article:

*”The average American supermarket now carries 48,750 items, according to the Food Marketing Institute, more than five times the number in 1975.  Britain’s Tesco stocks 91 different shampoos, 93 varieties of toothpaste and 115 of household cleaner.”

*”The University of California, Berkeley, has over 350 degree programs, including Buddhist Studies and Lesbian, Gay, Bisexual and Transgender Studies, each made up of scores of courses.”

*”In one landmark experiment, conducted in an upmarket grocery store in California, researchers set up a sampling table with a display of jams. In the first test they offered a tempting array of 24 different jams to taste; on a different day they displayed just six. Shoppers who took part in the sampling were rewarded with a discount voucher to buy any jam of the same brand in the store. It turned out that more shoppers stopped at the display when there were 24 jams. But when it came to buying afterward, fully 30% of those who stopped at the six-jam table went on to purchase a pot, against merely 3% of those who were faced with the selection of 24.”

*”As options multiply, there may be a point at which the effort required to obtain enough information to be able to distinguish sensibly between alternatives outweighs the benefit to the consumer of the extra choice.”

*”The more that options multiply, the more important brands become. Today, when paralyzed by bewildering choice, a consumer will often turn to a brand that is cleverly marketed to appear to be one that others trust.”