MR GLADWELL, PLEASE BEGIN YOUR ARGUMENT THATMORE CHOICE EQUALS MORE HAPPIENESS
I'd like to tell you all about the person who has added more happiness to the world than anyone else: Howard Moskowitz. Howard is the creator of chunky tomato sauce. A market researcher, Howard discovered that certain customers had fundamentally different tastes in tomato sauce. When Howard started his research the world thought that there was only one "best" type of tomato sauce that everyone would prefer. This was a platonic ideal of spaghetti sauce -- that was captured in the old world methods of sauce (like Ragu). However, what he discovered was that people’s preferences were not focused on one universal platonic ideal but differed in three dimensions: regular, spicy and chunky. At the time, no one was manufacturing chunky tomato sauce and that's exactly what Moskowitz's client -- Prego created.
Giving people the right kind of tomato sauce is like making them the right cup of coffee. If you ask people what kind of coffee they like, they will tell you that they like a dark, rich, hearty roast (but only 25-27% of people actually prefer that). Most of you actually want milky weak coffee. If we came up with a blend to coffee to suit everyone, the best score you can get is a 60 out of 100 on average. However, if we could segment you into 3 or 4 coffee clusters, you would move from a score of 60 to 75 or 78. The difference between a 60 and 78 is the difference between coffee that makes you wince and coffee that makes you deliriously happy.
MR SCHWARTZ, PLEASE PRESENT YOUR OPPOSING ARGUMENT -- THAT TOO MUCH CHOICE CAN MAKE US LESS HAPPY:
I agree with the vast majority of what Mr. Gladwell has to say with one exception. Though some choice is better than no choice – more choice isn’t always better. This is a bit counterintuitive because in Western society we believe that freedom is good and more choice means more freedom.
However when I go to the supermarket today there are 175 salad dressings and that’s not including the 15 extra virgin olive oils and 42 vinegars I could mix together for customized Italian dressings. There are 75 varieties of iced tea, 230 soups and 40 brands of toothpaste. However, all of these choices don’t make people any happier -- they actually make them less happy. There are a few reasons for this:
- Paralysis: With so many options people find it difficult to choose at all. As an example, one of my colleagues examined employee engagement with employer sponsored retirement accounts. She found that for every 10 more funds offered, participation actually goes down 2%.
- Opportunity Cost: With 175 salad dressings it’s easy to imagine a salad dressing that must be better than what you have chosen. When there are lots of alternatives to consider it is easy to imagine the attractive features of alternatives that you haven’t chosen. These untaken choices subtract from the satisfaction of what we’ve chosen even when we’ve chosen a good option. As the following cartoon suggests, you can never be happy if you’re always wondering if you should be doing something else:
- Escalation of Expectations: In the old days jeans never fit right. They were stiff and painful and eventually if you washed them enough they fit all right. Today, I went to buy jeans and was completely overwhelmed by the options. I spent an hour trying on jeans and left with the best pair of jeans that I ever had. But, I felt worse, I wrote a whole book to explain this The Paradox of Choice: Why More Is Less. Going in, when I thought there was only one type of jeans, I had no expectations but with 100 pairs of jeans, I should be able to find that perfect pair of jeans. What I got was good but not perfect. When I compared what I got to what I expected I was disappointed. Today everyone expects things to be perfect and you can never be happily surprised – which is a shame.
IN MY OPINION MR SCHWARTZ WINS THE DEBATE (AND HERE ARE HIS SOLUTIONS)
In order to make customers happier, part of the solution is to reduce (rather than enhance) number of decisions an individual makes. Think about the freedom of going to a restaurant with a tasting menu. The chef makes the decisions freeing you from choosing what to order – not to mention choosing what kind of salad dressing to buy. It doesn’t have to be that drastic though – customers can be happy with customization as long as it requires relatively little work on their part. A good example of customization with little work is the Pandora radio application. You just tell Pandora the songs that you like and Pandora creates your perfect radio station.
However, businesses can only do so much to raise customers’ happiness. Marketers continue to bring out new and better products – trying to convince consumers that these new products and new choices will make them happier. While these new options may be slightly better, most of the time it’s at the margins. Consumers need to lower their expectations of new products and realize that even the most customized product only provides the core benefits of the product itself and maybe a little more. No matter how customized your dishwashing detergent is, it will never make you as happy as the woman using it in the television ad. Taking that mindset, customers can be happier by ignoring most of the choices and just focus on the few clusters that really matter – and realize that the other differences won’t be all that significant.
If you like this sort of discussion you should watch the videos themselves – they very good. Then you might want to listen to the radio program Radiolab on Choice as well as pick up Dan Arielly’s book Predictably Irrational.
