Choice Architecture

Customers prefer more choices, right?

Not necessarily. While fulfilling customer demand is important, too many choices can sometimes result in reduced customer satisfaction, unintentionally affecting sales and brand loyalty. The widespread effect of “choice overload” is present everywhere from consumer goods to financial services.

Proper choice design and use of nudges (an idea invented by TGG affiliates Richard Thaler and Cass Sunstein) can combat effects like choice overload, and help customers make decisions that are mutually beneficial to themselves and to the firm serving them.

Our principals are leaders in the field of choice architecture, which relies on the art and science of understanding how consumers make purchasing decisions. We create website architectures, menus, and other paths that improve customer satisfaction. Generally this results in a design that is more intuitive and easy to use. Knowing that small variations in context can have powerful effects, we develop and refine our recommendations through experimentation.

Two illustrative examples of the design techniques we use are the selection of better default options and the optimization of choice order. Customers tend to stick with default options when they lack extensive information or strong preferences about the purchases they are making. Therefore, we use predictive analytics based on customer characteristics to create individually tailored default options that improve customer satisfaction. In addition, because customers tire when they have to make a lot of choices, we prioritize questions to ask about the most important choices first, thereby significantly smoothing the selection process.

Think improved choice architecture could help your firm? Send us an email.


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