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Leading Your Customer to the Right Choice

by Colin Shaw on August 9, 2018

Choice Architecture, a principle that psychologists have studied for decades, is the concept that describes how the presentation of information affects people’s decision-making. Framing is the tone you use to present your options. How you frame the choices changes your results. These two concepts can help you present your goods or services to customers in ways that influence them to respond the way that you want and drive more value ($$$$) for your organization.

For example, if you want to move people to subscription service on a product or service, start by rewarding those who do it. Maybe it’s a discount on the product or an extra service for subscription customers. You have given them a choice and framed it as a bonus if they agree to it.

It works the other way, too, in cases where you need to get customers to stop doing something. For example, a few of my old accounts still had a paper statement come to the house. Every time I got one, I thought, “I should switch to electronic statements”. Then, I forgot about it. When the company threatened to start charging me to have a paper statement, guess who logged on and made the switch?

Menu Design Matters to Your Customers’ Choices

Framing and Choice Architecture also come into play on menus. We can guide our customer’s decision-making with how we design our menus. (Now, when I say menu, many of you are picturing what you receive when you are seated at a table at a restaurant. That is one area where menu design matters, of course, but I am using the term in a broader sense.) Think of it as how you structure your offer to make it most attractive to your customers.

We discussed this concept in more detail on our Intuitive Customer podcast when we had a special guest, Dr. Jeff Parker, PhD, the Assistant Professor of Marketing from the University of Illinois, Chicago.

Dr. Parker has published many research articles on the psychological principles behind menu design. One, in particular, speaks to how customers make decisions based on the information they encounter in a menu. The research explored whether how you categorize information on a menu leads to different choices.

In Dr. Parker’s research, he and his research team wanted to know what happened when you grouped menu items in a certain category (note: in Dr. Parker’s research, they are using the term menu to apply to a food menu). For example, if you listed all the lower-calorie food options together, how would that affect customers’ choices? Secondly, how would that compare to simply labeling the menu options with their caloric content and not group them? In both cases, the total calories would be listed next to the menu item.

They discovered when only calorie counts were available and the items were not grouped in a “low-calorie” section, people made healthier choices. However, when they grouped the low-calorie options and labeled them as ‘healthy’, people chose them less.

The Power of Organization

So why didn’t grouping the lower-calorie, healthier items inspire the customer to choose more healthy items? Dr. Parker says it was because people began their “what-do-I-want-to-eat?” decision by screening options based on their labeling. When they read the ‘healthy’ header on the lower-calorie options, they rejected them all first thing. Dr. Parker thinks it is because many people think that for the menu item to be healthy it must also mean that it doesn’t taste delicious or it won’t be as filling as the unhealthy options.

In other words, they were screening out options in the first stage based on simple criteria and ‘healthy choices’, did not make the cut.

Dr. Parker’s research uncovers the power of organizing information to drive people’s decisions. People make decisions in stages, particularly when they are sorting through numerous options. As Professor Hamilton points out in the podcast, if you ask people in a restaurant if they want to eat healthily, many (if not most of them) will say, “Not really, no”.

The principles behind how you design menus apply to any assortment and selection of goods. Your menu design has a significant influence on your customers’ decision-making. Moreover, understanding how is crucial to your Customer Experience, as well as your bottom line. After all, once you know how menu design works, you can design yours to guide your customers to make better decisions for your organization.

What’s on Your Menu?

So what does this mean to your Customer Experience? Whether you are a restaurant or a spa or an advertising agency or a paper distributor, you present options to your customers at some point in the experience. How you present goods or services affects what they choose.

The first things you should consider are how you categorize and when they occur in the decision process. By providing people with different groups to compare, you are suggesting that these decisions should be made first in your experience. These early decisions can have enormous influence on what they choose. Moreover, these presentations should be organized in a way that people expect them to be. If you arrange against customer expectations, you can make it difficult for them to find what they want. It can make people feel frustrated, which isn’t doing a Customer Experience any favors.

How you apply this concept comes down to the goals of your organization. If you have a product you want people to choose, you should frame the menu in such a way that leads to that decision. For example, as Dr. Parker’s research suggests, if you were trying to get more people to choose the lower-calorie options off your (sizeable) menu, you wouldn’t want to group them together in a category people dismiss early. You would want to research what category labels mean to each type of customer you have. If your goal is to make the selection process more manageable, then organize the information to allow people to navigate easily. An example could be, help returning customers locate their previous order early in the online retail experience so they could order again. (Here would also be a good place to insert a ‘subscription service’ menu option.)

These are only two examples, chosen to demonstrate how your business goals dictate how you organize your offer. There are multitudinous details that apply to menu and user experience design. I am suggesting that you understand how the details lead to choices so you can manipulate them to be win-win for your customers.

Choice architecture and framing are fundamental concepts that help you understand why your customers select what they do. In your Customer Experience design, how you organize your offer influences what people buy. With a little bit of research and analysis, you could discover how to organize your customers right into a decision that they love—and you want them to choose.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawLeading Your Customer to the Right Choice