A couple years ago, I read a great book by Barry Schwartz, professor of psychology at Swarthmore College in Pennsylvania, called "The Paradox of Choice." Named one of the top business books of the year by both Business Week and Forbes, this best seller discusses the overwhelming number of options that Americans have available to them, asking if it's possible that we might actually have too many choices.
Choice, as Mr. Schwartz explains, is a wonderful thing; however, it does not necessarily follow that more choice is always better. In fact, as we continue to add more and more choices, we reach a point where the curve flattens and there are diminishing marginal returns - at that point, satisfaction drops and we are actually worse off than before. Our challenge is to find the "sweet spot" on the curve.
To prove his point, Schwartz cites a number of studies, including the famous "jam experiment" by Sheena Iyengar, a professor of business at Columbia University and author of a book called "The Art of Choosing." Iyengar wondered whether people buy more when they have more choices, so she decided to find out. At her local grocery store, on two separate days about a week apart, a table was set up where customers could sample different kinds of jam. The first day, they could choose from 24 different varieties, and a whopping 60 percent of customers who entered the store stopped by the table. On the second day, only six kinds of jam were offered, and the number of people who stopped for a sample dropped to 40 percent.
In both cases, customers tasted about the same number of jams, but the results were very different when it came time to check out. Of the people who stopped when there were 24 varieties to choose from, only 3 percent actually bought a jar of jam. But of the people who stopped when there were only six flavors to sample, 30 percent bought a jar! While people were more attracted to more choices, they were much more likely to buy when given fewer options.
If this is true - if people actually buy more when presented with fewer choices - why in the world do companies offer so many versions of the same product? The answer, of course, is to capture more shelf space. But could companies be shooting themselves in the foot by offering so many choices? Schwartz seems to thinks so.
"Everything suffers from comparison," he explains. What he means is that, when presented with a large number of choices, people can't help but think about what they're giving up by choosing a particular option. As a result, they have more trouble deciding and feel worse about the decisions they do make. In fact, Schwartz says that one of three things is likely to occur when people have too many choices: 1) they end up making poor decisions; 2) they are more dissatisfied with their choices; or 3) they become paralyzed and don't choose at all.
Obviously, we'd prefer that none of these happens to our clients, but how do we avoid it? Simple: offer fewer choices. Instead of showing our clients all of the quotes we receive, we could narrow it down to just a few options. And when we present the information to them, we don't need to include every single detail about the plans - instead, we should include only the most important benefits on our spreadsheets. Finally, it's not a bad idea to keep an ace up our sleeves. If there's more than one good option, pick one and make a recommendation. If they say no, go to Plan B - you might lose round one, but you're ready for round two.
Bottom line: too many agents are scared to make a recommendation; instead, they feel they need to present every option in the marketplace. But we're the experts, we know much more about employee benefits than our clients do, and we need to be willing to point them in the right direction - even if it's not the direction they think they want to go.
