Why Hotstar has only 2 subscription plans
Now this is interesting!
New to Kwerks?
Join the community of empathetic marketers, for 2 min tips based on behavioral science concepts.
Impacted Metrics: Conversions
Previous Tip: People get angry when they miss your offers (All tips here)
Top tip: Ask for a feedback as soon as possible
Recommendation:
Don't give your customers too many options. Keep it simple.
What is the choice overload effect?
Columbia University conducted a study, where a research team set up a jar sample booth at a retail store. Every few hours they switched the number of samples from 24 to a group of six. At the end of the study, they found that when there were 24 jams, 60% of the customers stopped to get a sample, and 3% bought one. But when there were 6 jams, only 40% of the customers stopped to check out the booth. But the interesting part was that 30% among them bought jam. This concluded that even though having lots of options attracted customers, it only gets a few of them to buy.
Having lots of choices can have the following negative effects:
Makes customers feel anxious
It can increase the cognitive load, making them spend more time in the decision-making process.
Can result in inaction.
Why does it happen?
In ancient history, only a few people had a say in important life decisions like, what job they should have, where they should work, or whether they should get married early.
But in the modern world, industrial and technological advancements have made it possible to manufacture and transport more and more products, resulting in a free economic system. And when you think about it, every modern human being’s survival depends on individualism, a need to be unique to stand out from the crowd.
This bias sometimes has an impact on our emotions, by decreasing our satisfaction with the choices we make and increasing the likelihood of regretting them.
Combatting choice overload:
Offer fewer options: It may seem weird to suggest reducing options in the age of personalization, but **P&G increased saw a 10% increase in revenue** after decreasing the varieties of Head & Shoulders.
Make it easy to compare different options: If you are offering multiple pricing plans, make it easy for customers to compare the features and offerings.
Example of a choice overload:
The pricing page of card.co has the problem of choice overload.
There are at least 3-4 sub-options in each column, which brings to a total of 14 pricing options!
