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Tough consumer decisions and how your business can ease the process

By Laura Straeter
Posted on June 28, 2018

What will our next holiday destination be?

Which tablet shall I buy?

What type of mortgage fits my financial situation best?

We are decision makers. From hitting our snooze button at dawn until switching off the lights at dusk, we make decisions all the time. Most of these are easy and automatic, hardly preceded by conscious thought. But some tougher decisions do require our attention. Recent research of Steffel & Williams1 shows that to ease complex decisions, we'd happily ask another person to take them for us.

Up to now, we generally agreed that freedom of choice mattered greatly, especially when making complex decisions. But Steffel and Williams discovered that freedom of choice actually sometimes matters less than the result. We don’t mind delegating a decision to friends or commercial parties, as long as this frees us from the difficult choice that we must make. All we care about is not to make a decision that we might regret.

Sure, choosing the right mortgage or life insurance will require careful consideration. Steffel and Williams thus suggest that help with such important decisions is indeed very welcome. But what matters is that the same is also true for everyday decisions with lesser impact, like picking a dish from a massive restaurant menu. As soon as we expect to potentially regret a decision and start hesitating, we look for a surrogate to help us out and make the decision on our behalf.

“There is no such thing as a single preferred surrogate; a perfect opportunity for your business!”

SERVICE OPPORTUNITIES

So who can help us out? Research indicates that there is no such thing as a single preferred ‘surrogate’. If you’re looking for a surrogate, you might turn to anyone who could help you out – and not necessarily to experts or close friends. You’d gladly involve anybody, as long as they could ease the decision-making process for you and relieve you of the responsibility of making the right choice.

Hold on – anybody? Yes, people facing difficulties will listen to anybody, including businesses. Bingo! This is an ideal opportunity to help your customers and boost your relationship with them: simply be there when they need you and offer your help. This doesn’t mean you should make the difficult decisions for your customers, as you’d be held responsible2. A good piece of advice would do the job. A welcome tip from a sales person, or a digital suggestion during a chat with an online retailer can ease your customers’ decision3, 4, improve their decision accuracy, and make them more confident about it.

MAKE ADVICE STICK

When giving advice, consider the way you communicate your information. How can you increase the odds of your piece of advice landing with your customers?

  1. Let an expert in the field give the advice. Customers perceive expert advice as helpful and less intrusive5.
  2. Be very confident about your advice. Recommendations of very confident advisors are more often followed than those of their less confident counterparts6, 7.
  3. Consider asking a small fee for your advice on significant decisions in life. Customers are more committed to information they have paid for. As a result they will value paid advice over free advice and absorb it better8. Keep in mind though that customers might only consider paying for advice if there is a lot at stake.

So as a company you can prove yourself especially valuable when you provide advice to customers who are facing a difficult decision. You can beam out how well you know your business and help customers to make accurate decisions. Whatever you do, make sure you have a clear roadmap of the customer journey. What challenges do your customers face? And which type of decisions do they find tough to make? Once you are aware of this and help them out accordingly, you can leave your customers happy with whatever decision they eventually make.

References

  • 1. Steffel, M., & Williams, E. F. (2018). Delegating decisions: Recruiting others to make choices we might regret. Journal of Consumer Research, 44 (5), 1015-1032.
  • 2. Harvey, N., & Fischer, I. (1997). Taking advice: Accepting help, improving judgment, and sharing responsibility. Organizational Behavior and Human Decision Processes, 70, 117–133.
  • 3. Brehmer, B., & Hagafors, R. (1986). The use of experts in complex decision-making: A paradigm for the study of staff work. Organizational Behavior and Human Decision Processes, 38, 181–195.
  • 4. Gardner, P. H., & Berry, D. C. (1995). The effect of different forms of advice on the control of a simulated complex system. Applied Cognitive Psychology, 9, S55–S79.
  • 5. Goldsmith, D. J., & Fitch, K. (1997). The normative context of advice as social support. Human Communication Research, 23, 454–476.
  • 6. Lawrence, M. & Warren, M. (2003). Are judgmental forecasts impacted by the source of the advice? Paper presented at the annual meeting of the Society for Judgment and Decision Making, Vancouver, BC.
  • 7. Hollenbeck, J. R., Ilgen, D. R., Sego, D. J., Hedlund, J., Major, D. A., & Phillips, J. (1995). Multilevel theory of team decision making: Decision performance in teams incorporating distributed expertise. Journal of Applied Psychology, 80, 292–316.
  • 8. Gino, F. (2005). Do we listen to advice just because we paid for it? The impact of cost of advice on its use. Harvard Business School Working Paper Series, No. 05-017.