Opinions & Advice

How Much Choice Do Consumers Want?

Jeff Kershner
Posted onMar 13, 2008 at 11:40 AM
Updated onUpdated on Oct 23, 2008 at 11:59 AM

Researchers at the University of Iowa recently found that people who have only a little information about a product are happier with that product than people who have more information. Does this go hand in hand with the customer that pays the most is usually your happiest customer?

"We found that once people commit to buying or consuming something, there’s a kind of wishful thinking that happens and they want to like what they’ve bought," said Dhananjay Nayakankuppam, marketing professor at UI".

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eMarketer analysts Lisa Phillips has this to say about the study:

"So if 70% of US automotive shoppers research their purchases online before buying, does that mean 100% of them will be really ticked off within three months of the purchase? Or maybe 50% of them will be ok with what they bought, but 1% will be swayed by the US Ford TV commercials that they really wanted an Edge, not a Nissan Murano? "Realistically, people research products to either make themselves comfortable making a choice or to rationalize their primary choice. Either way they can defend it to their partners, parents, friends and siblings."

Another eMarketer analysts, Ben Macklin said:

"There is only a certain amount of information and choices a human can absorb. The choices now available to consumers in terms of broadband, voice, TV and mobile services—and their possible bundles—from a host of different providers is completely overwhelming for some."

I think this really depends on the individual. We know that many of our online car shoppers are definitely considering other makes and models. It’s not like the days where you had fewer choices.

Case in point: Our lease is up on my wife’s Mercedes SUV (no remarks please, I got one hell of a lease deal on it), so it’s time for another vehicle and she of course wants another SUV. So here I am in shopping mode. I know what options she likes and what we need to have. What do we get? What are my choices? The truth is, the options are totally overwhelming to some degree. Another Mercedes ML, VW Touareg, Mazda CX-9, BMW X5, Subaru Tribeca, Acura MDX and even the Saturn Outlook is on the list. That’s a lot of choices!

Now of course the sales person in me says, "come on Jeff, you have SUV’s from each end of the spectrum here. You need figure out which one you like the most!" But you know what, I initially thought I would consider driving anyone of these vehicles as long as the lease payment made sense and the vehicle provided my wife and I with the features we need and want.

So lets say I visit the Subaru dealer and the sales person is useless, doesn’t know the product and is sort of on the pushy side. Guess what? I’m no longer interested in the Subaru. I have so many other choices that it’s highly unlikely that I even visit another Subaru dealer this time around.

I then visit the Saturn dealer. The sales person is laid back (maybe too laid back) but easy to work with. I just can’t bring myself to buy a Saturn.

The BMW X5 lease payment comes out to be too high as does the Touareg. Both were impressive but not enough for me to swallow the payment.

So far I have shopped 4 different vehicles at 4 different dealers. By now I’m starting to get a little worn out. I hate to shop..but I love to BUY! That is usually the truth for all consumers. Shopping is a pain, buying gets you gratification.

I now have it narrowed down to another Benz ML, Mazda CX-9 or the Acura MDX. Still 3 choices to consider.

My point here is, many of your customers are on the same situation and all the choices quickly become overwhelming. This is where CUSTOMER SERVICE and PRODUCT KNOWLEDGE plays a key role in obtaining a sale.

Coming back to the study: "people who have only a little information about a product are happier with that product than people who have more information" I do agree with this BUT this is NOT today’s average consumer. We are in the age of information and at the click of a button. People want information even if they are aware that it could be totally overwhelming. Recognize this and use this to your advantage!

Jeff Kershner
Founder of DealerRefresh - 20+ Years of dealership Sales, Management, Training, Marketing and Leadership.
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    Gerald
  • March 13, 2008
Choice is not always a good thing as we have learned in this business- people are simple and as we have seen over the past few years, a growing number of cases of analysis paralysis. Recently, we had a customer test drive a new vehicle, and was prepared to leave, so I asked what we could do to earn their business. They told me they had 33 other DIFFERENT VEHICLES to drive! Now that is an extreme case, but so many people fall prey to it.

It has even affected sports. Watch baseball this season and you will find out how well a hitter performs on the 3rd Thursday of a 5 week month facing a pitcher on the road in his second season.

All kidding aside, it is a problem, and I am thinking it has been a systemic problem with one of my previous stores' CSI. I am confident a customer (after they are happy and agree to terms) goes home to review all their emails, or worse, a lowball offer from another dealer since they had already bought, leaving the customer with the sense they could have gotten a better deal.

Unlike our customers, you are staying true to why you are searching- value. You won't buy from a mental midget at any price, but many will.
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@Jeff
I always pictured you as a Escalade kinda guy :)

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    Andrew DiFeo
  • March 13, 2008
I think some of that "too much choice" theory comes from when a consumer has so many choices and so much information, they find themselves overanalyzing the decision. They may even second guess the decision once they made it. I am going through that right now as I select a new CRM. After doing well over 80 hours of research, I thought I found the one, but now I'm thinking twice about it before signing the contract. There is a fine line between satisfying a customer and proving too much choice/information that you may confuse them.

By the way, not to add more choice to the list, but check out the Hyundai Veracruz. It is loaded with features, very safe, and priced right.
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    Lao Shi
  • March 14, 2008

People who have only a little information about a product are happier with that product than people who have more information. Of course this is very true… when they are happy with the product and have nothing to compare it to.

When they have product / service to compare and are able to see the difference in quality and price it becomes a horse of a different color especially when they have found out they have been taken advantage of, over paid or get lousy service.

American Consumers thought they were happy when they only had American cars for the most part to choose from, they did not know any better, as the Chinese say, "Ignorance is sometimes bliss." But is it really, maybe for some who use it to their advantage. When Germany and Japan began offering alternatives and choice the consumers began to move towards the new choices in ever increasing numbers.

By the way Jeff, I failed to see the Volvo XC 90 in your selection options, comparing this vehicle with the choices, the XC90, research will show, is the choice as it is arguably the most safe and best-engineered SUV on the highway…. And in addition it is favorably priced, according the comparison charts I have reviewed.

As Jeff pointed out it is a different market today, now we have the Korean companies producing high quality vehicles today, the Chinese manufacturers are right behind them with even more choice. Information is more readily available, most of it is good, solid information, women are a greater factor in the market place and they tend to be better informed and diligent.

Many dealer who address the needs of the new consumers will enjoy the rewards while many of the rest will rely on the credit challenged, tire kickers, consumers who enjoy rolling around the dealer showroom floor all day fighting to squeeze a few more dollars out of the store, and the bottom feeders where there is little profit to be gained.

Then there is the occasional consumer that rolls in and a lucky sales professional makes a big score that he/she brags about for the next 16 years, however these types of consumers are fading fast.

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Do you think that if dealers were to partner with information and video on-demand material providers for their site that this would be utilized by shoppers? I do. Car Builders are evidence for that.

We know that shoppers need and deserve some measure of information. How much each person needs is not the point so much as what each of us needs to obtain that information.

If dealer sites were better equipped with on-demand informative material versus sales material, retention levels on dealer sites could reach new heights.

Something to consider. -RG
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Without question - there is more information available to the consumer now than ever before as they research their upcoming purchase online. Two of the key areas where we can help these shoppers are time and simplicity.

Time: While there is limitless information online, most of our customers have limited time in this rapid paced world. Many of them look to the expertise and honest input of our sales reps to help them complete that research and make the best decision.

Simplicity: Every customer is not the same, and many want us to make the car buying process as simple as possible for them. Many of these folks use the internet to identify a dealer who has great deals, a great reputation, and can assist them in finding the vehicle they need.

Fortunately, the family I work with has multiple locations and brands, so that we can put our customer in the vehicle that best meets their needs, and not have their choice narrowed down to one manufacturer. While our market has changed rapidly, our customers still look to us to provide superior service and assistance in making this large purchase decision. You can have the best internet strategy in the world, but it still comes down to "people" to complete the process and create a satified customer! Kevin Frye/eCommerce Director/Jeff Wyler Automotive Family/www.wyler.com
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Joe Pistell is gonna hate me for this (if he doesn't already), but this thread might present a better opportunity to compare the similarities (we already know all the differences) between our industry and my Golfsmith visit. Along the lines of choice, all the "big box" stores overload the consumer with choices, knowing that the more choices the consumer has at that location, the more likely it is he/she will buy something there. But what about information? Some of the big boxes are very good at training their staff (certainly Golfsmith is an example) to provide product information without too much technical jargon, some are not. My salesperson at Golfsmith could have just as easily confused the you know what out of me with all the choices they had (and all the information he knew about each choice), but he was a professional. He asked the right questions, and then tailored his presentation to my answers. I probably won't have buyers remorse because I know features of the product I bought, specifically as they apply to me. Had I been overloaded with information, things might be different. This goes back to the old saying "telling ain't selling."

By the way, Jeff, I never thought I'd ask this, but have you considered the Buick? That new Enclave is sick! I had a chance to drive one a couple weeks ago, and I was hugely impressed. I know, it's a Buick...did your grandparents drive one too? But if it's good enough for Tiger, it's good enough for me (and maybe you).
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Sales reps need to look for tell tale signs of "Shoppers Information Fatigue" (aka SIF). It's a new buying signal.

Tell-tale SIF signs include:
-- a blank empty stare,
-- redness of eye,
-- difficulty in answering even the simplest of questions,
-- wandering the lot aimlessly.

These behaviors are exactly what our SIF produces when he logs hundreds of hours in Internet-Auto-Shopping research.

This exhausted Shopper has spent the last 200 hours on his PC fighting the emotions of his "inner child". The SIF shopper is to be considered a quality up as this lot walker has finally given up and will buy anything to end the agony.

Word from your DR pal, Joe.
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Did anyone notice that SEO and "Search Engine Marketing" were reported in this survey as separate forms of marketing? I suspect they are suggesting PPC when referencing SEM, but there are several forms of SEM and PPC is just one of them so it is not clear. I am surprised to see something that ambiguous in a survey by eMarketer.
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