Category: Business
Have You Experienced Choice Overload?

We’re going to talk about choice overload, why offering too many choices to customers is a bad thing, and what you should do instead.

Businessman and futurist Alvin Toffler first introduced the concept of choice overload in his book Future Shock (1970). The premise is that living in the post-industrial age (translate: TODAY!) means that we are faced with many choices—far more choices than even two decades ago.

How do we make choices?

Psychology professor Barry Schwartz summarizes the framework of decision-making in his book, The Paradox of Choice:

1) Identify your goals

2) Assess the significance of each goal

3) Organize the options according to how well they meet each goal

4) Figure out how likely each of the options is to meet your goals

5) Choose the best option

There are two types of decision-makers: Those who spend some time considering their options and are satisfied when something mostly meets their criteria, and those who can’t choose something until they’ve deeply examined every possibility in existence. 

Offering lots of options may not be the best idea.

Freedom of choice is a good thing, right? But having too many overloads our brain and paralyzes us from making a decision.

Columbia University conducted a study where a research team set up a booth of jam samples. Every few hours, they would switch from a selection of 24 jams to a group of six. When there were 24 jams, 60% of customers would stop to get a sample, while 3% would buy a jar. When there were six jams on display, only 40% stopped, but 30% bought jam. Lots of options attracted customers to browse, but fewer choices got them to buy.

The more options we’re faced with, the more likely we are to experience unhappiness, decision fatigue, decision paralysis (avoiding making a decision altogether), anxiousness, regret, and decreased satisfaction with the option they do choose.

As Schwartz explains, “The existence of multiple alternatives makes it easy for us to imagine alternatives that don’t exist — alternatives that combine the attractive features of the ones that do exist. And to the extent that we engage our imaginations in this way, we will be even less satisfied with the alternative we end up choosing. So, once again, a greater variety of choices actually makes us feel worse.”

How do companies manage choice overload?

Target makes it easy by carefully curating the wares on their shelves. They have thousands upon thousands of amazing products, but they don’t offer them up to you all at once. There are carefully selected spots, and they don’t fill racks to the brim because that’s visually overwhelming. There are probably one or two styles of clothing on a single rack. Their displays are designed to draw customers in and to encourage them to pick up and inspect the product. There’s always just enough product to pique interest and make you want to see more. Ever wonder why a Target run can take so long?

Proctor and Gamble found that when they decreased the number of Head & Shoulders shampoo varieties available to purchase, revenue increased by 10%. It can be hard to differentiate between very similar niche products, so taking away some of the options made the remaining ones easier to compare.

Squarespace has four plans to choose from on its website. Each subscription plan’s features can be complicated to weigh, so they made a chart that compares what you get with each subscription option. It’s pleasing to look at and simple to read, making the deciding process a lot more bearable. 

Companies like jewelry stores and car dealerships often have a comparison tool on their websites that lets you select your top three choices, see them next to each other, and closely examine their features and benefits. This process is much more user-friendly than making your customers go back and forth between web pages. 

Netflix has an option that pops up after it detects that you’ve been scrolling for a while that offers to choose a show for you. They do their best to categorize their material so you can narrow down what you want to watch, but we all know the difficulty of making that final commitment. 

AirBnB’s website gives you multiple chances to narrow your search by choosing preferred features in small batches, ensuring that you’re only presented with options that are the best fit for your needs. 

On DoorDash’s website, the first thing you see is a section of featured restaurants. Suppose scrolling through every restaurant available is overwhelming for you. In that case, this collection makes deciding easier because the agonizing work of determining which places are above average has already been done for you. When you choose a restaurant, they start by listing the featured and most popular items so that you don’t need to sift through the entire menu if you don’t want to.

What should small businesses be doing?

Remember that giving lots of options comes with good intentions, but it can backfire on your business. You don’t want to scare off potential customers by overwhelming them. Plus, you don’t want your brand to be associated with stressful feelings from choice overload. 

The best thing you can do to ease the anxiety of decision-making for your audience is to offer only the necessary number of options and make it as easy as possible to compare their features. Keep the design simple and highlight specific benefits that would appeal to your customers.

As a consumer yourself, you know and understand what your customers go through when faced with too many choices. Empathize with their distress and show your compassion through your messaging and marketing. Your efforts will not go unnoticed!

How about you? How do you make choice-making easy for your customers? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://thedecisionlab.com/biases/choice-overload-bias/

https://blog.crobox.com/article/choice-overload

https://medium.com/choice-hacking/choice-overload-why-simplicity-is-the-key-to-winning-customers-2f8e239eaba6


Are You Familiar with the Framing Effect?

We’re going to talk about the framing effect, what it is, and how it’s used by savvy brands.

Is the glass half-full or half-empty? Do you like frozen yogurt that is 90% fat-free or one with only 10% fat in it? Would you invest in something with a 10% risk—or are you more willing to invest if it had a 90% chance of earning money?

What is the framing effect?

It is a cognitive bias (aka an error in thinking) that leads us to decide on something based on the connotation presented. If an option bears a negative connotation, like “20% risk of loss” or “20% trans-fat,” you’ll likely decide to stay away from this option. But if it bears a positive connotation, like “80% chance of winning” or “80% fat-free,” you’re more likely to choose this option.

It matters what you say and how you say it. It matters how you frame it.

The study of the framing effect began in 1981 with psychologists Tversky and Kahneman. They ran an experiment where participants had to decide between two treatment plans for 600 people who contracted a fatal disease. Treatment A would end 400 lives, and Treatment B had a 33% chance of ending no lives but a 66% of ending all 600 lives. When framed as saving 200 lives, 72% of participants supported Treatment A. However, when framed as ending 400 lives, only 22% of participants were in favor.  

People’s choices are influenced by the way the options are framed.  

The information itself is often irrelevant.

We put more focus on how the information is given rather than the information itself.  

Behavioral economics has us pegged as irrational decision-makers, remember?

We despise risk and loss, both of which are associated with negative connotations. If you want to sell a product, don’t try to use a characteristic that could be perceived as negative. We’re programmed to avoid loss, so we’ll respond better when positive benefits are highlighted.

Making decisions is hard, so we tend to pull on the most readily available information to help us with the task. Rather than take the time and energy to try and process, evaluate, and understand information, the framing effect gives us a mental shortcut.

It also appeals to our emotions, another huge factor in making choices.

Let’s look at the framing effect in action.

You go to the store to buy hand sanitizer, as one often does during a pandemic. You find two completely identical options. However, one claims to kill 98% of bacteria, while the other claims to only let 2% of bacteria survive. What is the single most important benefit of hand sanitizer? The fact that it kills bacteria. Therefore, you’re going to pick the first one because it highlights the one thing that hand sanitizer should do. You don’t want to be reminded that 2% of bacteria are left to roam around.  

It’s nacho night, and you’ve been tasked with the grocery shopping. When you get to the meat section, you choose the package that defines the contents as 75% lean meat. Would you feel as good about buying this meat if it was identified as 25% fat meat? Nope, that sounds a bit gross. Is there a possibility you wouldn’t even buy it and just get more cheese for your nachos instead? Absolutely.

There’s a new show on Netflix that everyone has been talking about, and you want to watch it, but you don’t want to pay $8.99 just to be in on the latest binge-watching trend. One more look at their website couldn’t hurt though, maybe they’re having a promotion. To your surprise, a new number catches your eye: “Just 30 Cents Per Day!”. They must be running some once-in-a-lifetime special! Everything suddenly seems more than worth it, and you start to get excited about all the other shows and movies you’ll have access to as well.

It’s almost tax season, and you’re starting to realize you need some help. You begin researching free finance tracking software and find one that’s recommended by 7 out of 10 professional accountants. If the same software exclaimed that only 3 out of 10 accountants would oppose it, you would keep looking for something with a more positive spin.

Home Depot is having a sale on vacuum cleaners. Which promotion do you think would sell more? A $75 discount on a $500 vacuum cleaner or a 15% discount on the same $500 vacuum cleaner? People are more likely to be attracted to a $75 discount because it sounds like a better deal than a 15% discount—even if it’s the same amount (15% of $500 is $75). Most people don’t like to do math problems anyway—and the brain easily recognizes a large number.

How can small businesses use the framing effect to their advantage?

Delve into your target audience and gather as much information as you can about who they are, what they do, and what they seek. You could theoretically be framing something in a successful way, but if the characteristics presented don’t appeal to your audience, you’re at a loss. There’s a better chance of them buying your product if you frame it with positive attributes, but you need to know which attributes to present to make them care.

As we tend to avoid loss, we actively seek out positivity.  

There are countless ways to persuasively guide your customers to make a purchase, just be careful not to cross over into misleading them. Focus on positive influence and pure intentions, and you’ll end up making their lives easier.   

So, the next time you’re offering a new product or selling something at a discount, remember that framing is important. Communicate the positives and remember that sometimes, giving a dollar discount is better than a % discount. It’s all about how you frame it.

How about you? How do you make choice-making easy for your customers? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://www.digitalalchemy.global/framing-in-marketin/

https://boycewire.com/framing-effect-definition-and-examples/

https://www.crowdcontent.com/blog/2018/04/03/the-framing-effect/

https://thedecisionlab.com/biases/framing-effect/


McMinnville, OR Business Owner Recognized by Prestigious Goldman Sachs 10KSB Program

FOR IMMEDIATE RELEASE

McMinnville, OR Business Owner Recognized by Prestigious Goldman Sachs 10KSB Program 

Sacred Fire Creative, a McMinnville-based digital marketing agency founded in 2014 by Malee Ojua, has been named one of the most promising small businesses in the nation by the top investment bank. 

McMinnville, OR (June 20, 2019)—When former aerospace engineer Malee Ojua first studied graphic design, she did it just for fun. She never thought it would lead her to build a successful digital marketing agency or that Goldman Sachs would eventually select her for an exclusive business development program.

“I left my career as an aerospace engineer with Top Secret government security clearance in 1998 to be with my mother after her Stage IV breast cancer diagnosis,” recalled Ojua. “Everything was moment to moment. I decided then that life is too short not to do what you are passionate about and what makes you happy.”

Her passion drove Ojua to pursue a different path from her established engineering career, in which she successfully marketed multi-billion-dollar defense satellite systems to hundreds of military generals at a time. “People have always asked me to design, to make everything look better. It’s what I do without thinking.” With her natural knack for design, Ojua went back to school and earned a degree in web development and design. In 2014, she established Sacred Fire Creative, LLC, a business she started from nothing and on her own.

“I mentioned at a women’s networking event that I was starting a side business in web design. Next thing I know, four business owners came up to me, handed me checks and told me that I needed to register my business right away. That’s how it all started,” Ojua shared.

By 2015, Ojua was working full-time at her company. Corporate accounts started coming in by 2016, first the New York University Langone Medical Center, followed by Johnson & Johnson and ArisGlobal Health. By 2017, Sacred Fire Creative posted six-figure revenues. And, in 2018, the company experienced 117% business growth.

“For me, this is the American Dream—that you can achieve success with persistent hard work and determination no matter what obstacles are in your way,” said Ojua.

“My parents are immigrants who came to the US separately, bringing with them only the clothes on their backs. Together, they built a grocery business and worked hard so that my brother, my sister, and I could live a good life,” Ojua said. “They taught us the value of hard work and the importance of giving back to the country and community that took us in.”

“I have always wanted to contribute to my community, and I do that through my business,” said Ojua. “I started this business from scratch and figured it out through the help of other women business owners and mentors. I want to show that people like me—a woman, a daughter of immigrants, and a member of ethnic minority groups—can build a successful enterprise. I am excited to give back and inspire other women and minorities like me to do the same.”

In 2017, Ojua applied for the prestigious Goldman Sachs 10,000 Small Businesses program, also known as 10,000 Small Businesses or 10KSB. This education and mentorship program for entrepreneurs was developed by finance industry leader Goldman Sachs in partnership with Babson College in Wellesley, Massachusetts.

She was one of under 150 business owners invited to participate in the program from over 800 applicants.

“Being chosen to participate in 10KSB is an amazing opportunity,” said Ojua. “It opened my eyes to new avenues of growth I’d never even considered before.”

Goldman Sachs created 10KSB in 2009 with the belief that giving small business owners access to education, capital, and support is the optimum way to overcome barriers to their growth. The program’s scholars take part in a condensed and intensive MBA-like training lasting 12 weeks. The training includes guidance in building a customized growth plan, one-on-one counseling, membership to a peer support network, and support from leaders in the business world.

“These business owners represent the best of the US economy. This program helps them grow their business, create new jobs, and strengthen our communities. Nearly 70% of participants increase revenues and 50% create new jobs just six months after graduating,” said Babson College’s Richard T. Bliss, the National Academic Director of Goldman Sachs 10,000 Small Businesses.

With her 10KSB diploma firmly in hand, Ojua is back in McMinnville, OR and has set her sights on certifications for her business that would allow her to offer graphic design services to government agencies on the federal level.

“I’m applying for federal SBA 8(a) Business Development Program as well as acquiring SBA Women-Owned Small Business (WOSB) Program certifications. Also, I’m renewing our Certification Office for Business Inclusion and Diversity (COBID), Women Business Enterprise (WBE), Minority Business Enterprise (MBE), and Emerging Small Business (ESB) certifications.”

“We’re aiming to get listed on the US General Services Administration (GSA) Schedule for Advertising and Integrated Marketing Solutions (AIMS). This will allow government buyers to purchase directly from us with pre-established pricing, terms, and conditions.”

According to Ojua, there are no other currently certified graphic design agencies in Oregon on the GSA Schedule. Sacred Fire Creative is additionally qualified for the HUBZone (Historically Underutilized Business Zone) Program certification, which even fewer agencies hold. Having these certifications, said Ojua, would further separate her company from its competitors.

“As someone with past experience working with government agencies, I truly believe we have the qualities that government buyers on the federal, state, and local level are looking for in their contractors. It’s an opportunity we are excited to explore,” Ojua said.

Sacred Fire Creative is a digital marketing agency that provides a wide range of business development services, including graphic design, web design and development, social media management, and content marketing. For more information about Sacred Fire Creative and Malee Ojua, please visit www.sacredfirecreative.com.

CONTACT:

Malee Ojua

malee@sacredfirecreative.com

503-816-3890

Also see this press release in:


Examining the 30-Year Legacy of NAWBO and the Women’s Business Ownership Act of 1988

Recently, I had the opportunity to speak with the Business Tribune in my capacity as Programs Director and President-Elect of the National Association of Women Business Owners (NAWBO) Oregon Chapter. In that interview, I talked about how the 18-month-old NAWBO Oregon Chapter stands on the 30-year legacy of NAWBO and the groundbreaking 1988 law that made it all possible. I also spoke about the challenges that women business owners still face today.

 

Women’s contribution to business is previously misrepresented

 

Before the 1990s, the business sector’s spotlight is focused entirely on men and their contributions. Women’s contributions to business didn’t matter much. In fact, prior to the passage of the Women’s Business Ownership Act, the US Census Bureau only collected data from women business owners who operate from home. The Bureau largely disregarded data from bigger women-run corporations, known as C-corporations.

 

This level of misrepresentation obviously made it difficult for women back then to start up and grow their own enterprises. Gender stereotyping labeled women as high-risk borrowers, so few banks and lenders were willing to give them the funding they needed. Those that were required women borrowers to have their male relatives sign their loan applications for them. There were even stories of women having their teenaged sons sign these applications for them, if you could believe that.

 

Aside from lack of funding sources, women in business also didn’t have much support in terms of education and resources. Women business owners were pretty much on their own back then, to succeed or fail only by their sheer grit.

 

NAWBO lobbies to change the scene for women in business

 

Fast forward to 1975, when a group of like-minded, Washington DC-based businesswomen got together to share information and solutions to challenges faced by women in business. Led by Susan Hagar, this group of women eventually incorporated themselves as the National Association of Women Business Owners.

 

Initially, NAWBO endeavored to show support for women business owners by publishing a directory of women-run enterprises in the Baltimore area. NAWBO’s growing influence led the group to take part in the White House Conference on Small Businesses. They also participated in task forces and committees to bring to the fore women’s concerns and challenges in the world of business that time.

 

Their efforts paid off in the long run. In 1988, President Ronald Reagan signed H.R. 5050, also known as the Women’s Business Ownership Act. NAWBO was recognized as one of the organizations whose support made this historic law possible.

 

H.R. 5050 changed the landscape for women in business. For one, it scraped existing laws requiring women to get male family members to sign for their loans. For another, the Act created women’s business centers throughout the country. From these centers, women can get seed funding, training, resources, and other forms of support to start up and grow their businesses. Lastly, the Act enabled the formation of the National Women’s Business Council. The Council assists in creating policies regarding women in business.

 

Women in business still face challenges today

 

The passage of the Women’s Business Ownership Act of 1988 certainly opened more doors for women in business. More than that, the law revealed the true value that businesswomen bring to the table.

 

Nonetheless, women business owners still face a myriad of challenges today, 30 years after President Reagan signed the Act. These issues lie mostly with finding adequate funding and gender discrimination. Entrepreneur Magazine has a great infographic that illustrates the problems that women in business still face right now.

 

Personally, I find finances to be a major challenge in running Sacred Fire Creative. As I mentioned in the Business Tribune article, I can be obsessive with my personal finances and the money that comes in and out of my company. So, it’s always my advice to other women business owners who are just starting up to keep track of their finances. More importantly, they should seek financing instead of using their credit cards when taking care of their business expenses.

 

With regards NAWBO Oregon, our focus right now is to build a strong support network for our growing membership. Eventually, once we get the numbers, we will shift our attention to advocate state-level legislation that will promote concerns of Oregon’s women business owners.

 


Font Resize
Skip to content