May 2019, London
Europe's biggest event for commercial and digital travel execs
The dilemma of choice
Tom Bacon shares insights heard at EyeforTravel’s recent Las Vegas show from Wyndham
Is too much choice a good thing? In his recent keynote address at EyeforTravel’s Las Vegas conference in October, Barry Goldstein, Wyndham Hotel Group’s executive vice president and chief marketing officer, referred to a study of ‘choice’ by two professors: Sheena Iyengar of Columbia University and Mark Lepper of Stanford. As Barry explained, Iyengar and Lepper acknowledge that choice is good – yes, as well as driving fresh revenues, new ancillary alternatives offered by hotels and airlines can be good for customers. However, their study – When Choice is Demotivating: Can One Desire too Much of a Good Thing - also raises the question of whether there is such a thing as too much choice.
More choice is often appreciated by customers but can result in fewer purchases
As an example, they tested how people in a grocery store responded to a choice of jams. In one scenario, customers were invited to taste six different jams; in the other, 30 different jams were offered. Customers appeared to be attracted to more choice: with 30 jams, 60% of the shoppers who walked by stopped at the tasting booth while only 40% stopped when the booth offered just six jams.
However, a very small number of the shoppers who had seen the display of 30 jams actually made a purchase that day. In fact, the display of six jams was five times more effective in driving purchases.
One of the conclusions of the study was that more choice is often appreciated by customers but can result in fewer purchases. Furthermore, too much choice can be overwhelming and inhibit customer decision-making. Additional tests reinforced the initial results: customers may say they appreciate more choice but they hesitate to act on it!
The right amount of choice
Potentially, we have reached this point in the travel business. Our long menu of choices is actually resulting in fewer bookings, fewer decisions, and greater procrastination. For airlines, travellers may have three or more different bag options, three or more seat-type options (more legroom, wider seats etc), a dozen or more seating options (aisle, window, front, back), boarding options, meal options, drink options, lounge options, insurance, refundability and more! Hotels similarly offer a range of room types and rates, early check-in, late check-out, faster Wifi, breakfast, access to the spa or business centre, and more.
The opportunity lies in using artificial intelligence to discern customer needs and display options relevant to that customer segment
Perhaps too much choice is contributing to the average customer going to 38 sites before they book – and eventually booking with considerable anxiety - wondering both if they got a reasonable deal and if they missed something important. Against this backdrop, Goldstein sees an alternative to ‘too much choice’; he proposes that travel suppliers seek to offer ‘the right amount of choice’.
Of course, ‘presenting with scarcity’ doesn’t mean developing a standard display that best meets the average traveler’s needs. Today, the opportunity lies in using artificial intelligence to discern customer needs and display options relevant to that customer segment. As Goldstein argued, the travel industry is way behind the best e-tailers in offering the right choices, and that it will take time for travel to test and learn best practices in this direction. But now that airlines and hotels offer more choice, it is now time for them to better meet customer needs in limiting the choices any one customer has to make.
Tom Bacon has been in the business 25 years, as an airline veteran and now industry consultant in revenue optimisation. He leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Questions? Email Tom or visit his website