Spring 2006 / No. 67
Does too much choice kill an enrollment?
by Gil Lowerre
This article
continues our series on enrollment strategy. The two previous
issues examined the importance of offering meaningful advice
and ways to bundle advice into enrollment platforms.
Now that
we have a handle on advice and its growing importance in voluntary
product enrollments, we can look at the enrollment process
in its totality. Assuming our premise is correct—that
enrollment choices are becoming more complex and advice is
the key to the complexity—let’s examine the impact
of enrollment on our customers.
Enrollment
serves two functions: to present and guide employees through
the choices available and to complete the necessary operational
steps to apply for the chosen alternatives. And we understand
that our goals have to focus on eliminating the operational
complexity while supporting the customer’s choice-making
decisions (through advice). The missing link then is to understand
the role and impact of employee choice.
Choice is
a good thing. Isn’t it? The right answer is “sometimes.”
We are learning a lot about the impact of choice on satisfaction
and decision-making, and here are some headlines to ponder.
- Having
choices is perceived as more satisfying than not having a
choice. (Taylor, 1989)
- As the
number of choices increase, people focus on fewer of the
available options and take advantage of less of the available
information. (Hauser & Wernerfelt, 1990).
- Offering
a greater array of choices is at first appealing to customers,
but purchase behavior drops dramatically after the number
of choices exceeds the optimum (Iyengar
& Lepper, 2000).
- People
offered an excessive number of choices tend to be less satisfied
with their decisions, experience higher levels of regret
and report being more frustrated with the process (Iyengar & Lepper,
2000).
- People
actually seem to prefer to exercise their opportunity to
choose in contexts where their choices were limited.*
So what
is the optimum number of choices? There is no definitive answer,
but dozens of studies have found optimal decision-making characteristics
(high purchase behavior, high satisfaction, low “regret”)
at roughly six options, deteriorating steadily until presented
with fifteen or more options. This suggests that having to
make a decision between six or so alternatives is probably
the ideal. Three products, each with two options constitute
six choices. So does one more complex product requiring six
decisions. Come to think of it, most enrollments involve at
least six different choices. And we know that if we get too
much beyond that, a downward spiral ensues.
So the final
question about enrollment is obvious. How do we bundle advice
in support of the right number of options, on the most cost
and time efficient platform? In other words, how do we make
decisions about the enrollment process given the issues raised
in these last three articles? That will be the subject of our
next issue.
For
more information on maximizing enrollment results or analyzing
your company’s enrollment strategy, call us at (860)
676-9633 or email us at info@eastbridge.com.
*Research
review and quote from "When Choice is Demotivating"
by Iyengar and Lepper, Journal of Personality and Social
Psychology,
Vol. 79. |
