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Tuesday, January 7, 2014

Research: Too Many Choices Can Derail Success 01-08

Research: Too Many Choices Can Derail Success

Stanford marketing professor Szu-chi Huang finds that what motivates people to achieve a goal changes along the journey.

Have you ever been oh-so-close to reaching a goal but then fallen short or even thrown in the towel, only to become frustrated and discouraged? Perhaps the reason wasn’t a lack of willpower. Maybe you simply faced too many options for making that final push to the end.

When people are close to achieving something, whether it’s as challenging as losing weight or as simple as earning enough points to get a free cup of coffee, having more than one possible path leading to success can actually derail it, says Szu-chi Huang, assistant professor of marketing at Stanford Graduate School of Business. 

Yet when those same people are just starting out on a pursuit, having a number of ways to make progress is motivating and encourages them to keep going, Huang says. Her study, "All Roads Lead to Rome: The Impact of Multiple Attainment Means on Motivation," was published in 2013 in the Journal of Personality and Social Psychology.

Huang, who joined Stanford GSB in 2013 after receiving her PhD from the University of Texas at Austin, researches consumer motivation, producing findings relevant to businesses and other organizations that persuade people to buy, donate or otherwise participate. Much of her research examines how individuals attain goals. The big takeaway: What motivates people to achieve a goal is dynamic, changing over the course of the journey, and organizations should adjust the options they offer individuals to help them maintain their drive.

Early in any initiative, people wonder, “Can I achieve this goal at all?” and they seek reassurance that they can, says Huang, who co-authored the study with Ying Zhang of Peking University and University of Texas at Austin, and teaches a class at Stanford GSB in consumer behavior. 

Offering people several paths to follow when they are taking their first steps makes the goal seem easier, encouraging them to go for it. But when people are close to the end of the pursuit, they ask, “How do I speed to the end?” Offering choices undermines people’s motivation at this stage because it makes answering that question harder, she says.

“By providing multiple ways to attain the goal, we’re actually forcing people to stop and think and make a choice instead of giving them a straightforward path to rush to the end,” says Huang. “If you tell them, ‘Here are five things and you can do them all and you have to choose,’ we’re interrupting their momentum with choices. They now have to think and make a choice. Therefore, options are demotivating when people have reached the advanced stage of the pursuit.”

Huang’s latest findings follow her previous research showing similarly counterintuitive findings on the effect of flexibility on people’s likelihood of achieving goals.

 In another study, published in 2013 in the Journal of Consumer Research, Huang learned that customers who were required to make purchases in a strict order of six flavors in a yogurt shop’s loyalty program were more likely to complete the purchases of these flavors to earn a reward than those who were given the flexibility to choose their own order of purchases of the same six flavors of yogurt. 

“People fail to realize that relatively rigid structures can often simplify goal pursuit by removing the need to make choices, especially when people are already well into the process” she says.

In field research for her latest study, Huang gave coffee-shop customers different versions of invitations to join the café’s loyalty program. Some invitations gave customers a head start by providing them with six of the 12 stamps needed to earn a free coffee. Half of those in this advanced stage of purchases were told they could earn more stamps in several ways: buying coffee, tea or any other drink. The rest of the advanced-stage customers were offered only one route to more stamps: by buying a drink.

Another set of invitations gave customers no stamps at all, placing them in an “initial” stage. Again, half the customers were given multiple ways to earn more stamps, and the rest a single method.

Among the customers starting with six stamps, those instructed only to buy a drink joined the program at a 40% rate, compared with 26.5% for those who were given multiple options. The results flip-flopped among the early-stage customers. Those who were offered several options were more likely to sign up (37.5%) than those who were instructed only to buy a drink (21.6%). 

The findings suggest that people with significant progress under their belt were more motivated to join if given just the narrow path of “buying a drink.” And for those starting out with a blank slate, having more options gave them the motivation to sign up.

Many types of organizations typically give customers and donors multiple choices without adjusting them as their clients approach their goals, Huang notes. Companies running loyalty programs give members sitting on thousands of points many ways to keep earning more. The risk is not that they will never turn in their points, but that they will stop purchasing from the company altogether because their motivation to earn more points in the program is weakened by the overwhelming options.

 Nonprofits let patrons donate in various ways, and even late in a fundraising campaign as the organization approaches its goal. Instead, Huang says, organizations should consider narrowing the options once a goal is within reach.

Some organizations are reluctant to actually take away options or design separate programs for advanced-stage customers. Instead, the company or group can simply tailor its pitch, Huang says. A gym, for example, can market just one type of fitness program to a population that’s already relatively fit. Then, when the New Year rolls around and people make their resolutions to lose weight, the fitness club can play up a range of programs to make their customers’ goals seem easier.

Analyzing customer data is another way for organizations to determine what to offer to whom and when, adds Huang. A customer with only a few points might wonder if she can ever collect enough to earn her reward, so telling her about a few more ways to earn points would give her a nudge. But a customer with many points is likely to respond to a pitch that highlights simply one way to get to the reward.

“When customers are in the advanced stage, you’re dealing with a completely different animal,” Huang says, “so we can’t be static in our communications or in our design of loyalty programs and promotions. It’s a dynamic process.”

Now, Huang, who has a longtime interest in consumer marketing and was formerly an account director at the advertising agency JWT, is studying people’s motivations when they’re in the middle of a pursuit. “Many people have no problem starting a goal, but they often find themselves losing motivation in the middle of the journey,” she says. She is trying to determine the effectiveness of encouraging those people with “social information,” such as messages about the progress of others.

“Your friends are working out or using a product or donating money,” she says. “Our prediction is that social information could provide that extra push when you’re in that middle stage.”

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