The Paradox of Choice Within Automotive

ChoiceAmericans make an average of 70 different choices a day. We decide between coffee flavors, songs on the radio, business investments, romantic partners, groceries, and more. When we make a choice, we are distinguishing between millions of alternatives. Companies pride themselves on offering the upper limit of choice; because that’s what customers want, right?

But is an abundance of choice always a good thing?

Barry Schwartz, PhD, a Swarthmore College Psychologist, argues that choice can be a very bad thing. In fact, an abundance of choice can be paralyzing. Why? An abundance of choice means we are always expected to make the “right” choice. With more opportunities to fail, we fear our decisions. In fact, according to The Economist, expectations have been inflated to such an extent that people think the perfect choice exists. Barry Schwartz’s TED talk below expands on this issue:

Choice Within Automotive

Why do the majority of consumers describe the car shopping experience as stressful and overwhelming? The common answer is pushy sales managers and negotiation. Yet, both of these discomforts stem from one key required action: choice. Choosing to interact with the sales team at a car dealership begins the process of making a series of high stakes decisions with clear consequences. With so many car models and dealerships out there, car shoppers worry that they will not only lose money, but make the wrong choice in the process. Their safety, self-image, and peace-of-mind are on the line.

Consumers must put in significant effort to distinguish between alternatives. In fact, Columbia conducted a study in which consumers were presented with a tasting booth offering either a limited (6) or extensive (24) number of jam flavors. Of the 260 customers that encountered the display within the 5-hour experimentation period, 30% of the customers purchased when the selection was limited to 6 jams. In contrast, only 3% purchased jam when 24 options were presented.

If you are a used car dealer, this conundrum is particularly applicable. Too many postings can overwhelm your customer and cause you to lose a sale. While the solution is not necessarily to list 5 car options, your dealership may benefit from either featuring a posting every day, re-examining your inventory, or providing an expanded list of offerings on an alternate page within your website.

Customers hope to make the “ideal” choice and support platforms and businesses that simplify their endeavor. Millenials in particular appreciate it when a dealership is upfront about the information it’s presenting. Take your customer’s perspective; if you are walking through the door into your dealership, what types of choices will you make? How will you feel making these choices? If you are overwhelmed thinking your about the dealership’s process or extensive product offerings, you may consider reducing your presentation. Simplifying your business and product offerings makes it easier for both you and your customer.

How have you simplified your car dealership? Comment below!