Market Research

The role of choice architecture in designing experiences

Learn more about the history of choice architecture, the six key elements that make it up, and how you can apply choice architecture to design better experiences for your customers, employees, and other stakeholders.

What is choice architecture?

There’s a reason why real estate agents that stage a house with beautiful accessories and flowers will more likely sell the house when compared to another house that’s shown bare and empty. A potential buyer can much more effectively picture themselves in a house that has great decorations and makes them feel good.

The way something makes the buyer feel can impact how much they want to buy it. Choice architecture gives the customer a choice where one option is framed as a more attractive option than another. The customer still has sovereignty to choose either option, but they are ‘nudged’ into choosing one over the other by its presentation.

Businesses can use this theory to influence buying decisions by enhancing the environment in which the target market is viewing and experiencing a product.

For example, a supermarket may present more expensive branded products at eye level, while cheaper own-brand versions are stored along the bottom shelves. Both product lines are available to the customer, though the prominence of the branded product in the customer’s line of sight may tip buying decisions in the branded product’s favor.

The origin of the term ‘choice architecture’

Choice architecture as a term came from a book by Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (2008). Thaler’s theory helped him win the 2017 Nobel Prize for Economics.

In the book, the authors talk about choice architecture as a way of thoughtfully designing an experience to help customers make decisions in an optimal way. People are offered a ‘nudge’ towards a choice that was perceived to be in the best interest of that person, but the person still had the freedom to choose either option.

The book defines a nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.”

The 6 elements of choice architecture

There are six elements that influence the creation of choice architecture, and these need to be considered when businesses want to explore this approach.

1. Reducing choice overload

While additional choice provides the potential for more variety and uses, it also adds an additional option that needs time and energy to consider. In fact, too many choices can actually cause dissatisfaction — this is called choice overload.

The first element of choice architecture is to help people reduce their choices. This can be done by providing decision-support tools, like checklists or decision trees, that help you arrive at one choice. Buyer guides and digital search filters can also help with online decisions.

Limiting choices is not recommended as this goes against the principle of an individual’s freedom to choose and as a result may reduce trust with a brand or organization. If choices are limited ahead of presentation, then so is the potential for the individual to make a free choice from all the options.

2. Default choices

People are more likely to stay with the ‘default’ choice if presented with options, as the energy and time to consider options has been done at a previous time.

An example of a recurring default is a person that made a choice previously, after taking the time to consider the options at that time, and then chooses that choice once again, simply because they have approved it previously. For example, when you return to a restaurant, you may choose the same thing you ordered before if you enjoyed it, rather than considering all the options again.

In business, opting in and opting out of services are examples of default choice architecture at work. When asked to opt into receiving a newsletter, people will more likely stay with the default of not receiving a newsletter. This works the other way round too. If the default position is that everyone is opted in to receive a newsletter, and they are asked to opt-out, people will more likely remain opted in.

3. Choice over time

There are biases at work when people are presented with choices that span across time periods. People may want short-term gain over long-term success, as they may believe the future is too far off or unclear, while the present can provide certainty of reward. This explains why people will spend more now than save, or over-eat unhealthy food for pleasure than to eat healthy foods for long-term benefit.

In business, this element can come out in time-sensitive offers and sales that happen over short periods. The conditions that the options are presented under (limited time) indirectly affect the pressure to buy quickly. For products and services that have long-term benefits, businesses can use communications to help customers understand the outcomes of their choice so that the customer can have confidence and certainty of the future.

4. Partitioning options and attributes

Partitioning, or grouping together choices by options and attributes is another way for an individual to be influenced by choice architecture. Grouping choices by options (i.e. categories) is different from grouping choices by attributes (the features of a choice). However, both can have a profound effect on decision-making, if options are presented in groups.

In business, when you’re competing against similar products, the way your product is described can make it stand out and seem more beneficial. For example, yogurt can be partitioned in the customer’s mind against other options (yogurts can be classed as fruit-flavored, desert-flavored, or plain-flavored for example), or partitioned by its attributes (this yogurt is low-fat, probiotic, creamy, tasty, and flavored). Where a business is appealing to a health-conscious target market, marketing the health-related attributes can sway a customer to pick your product.

5. Avoiding attribute overload

Just like having too many choices can cause choice overload, having too many attributes to consider when comparing choices can cause similar stress.

In business, a product may have lots of attributes but these can be limited to help a customer fully grasp the key details initially. For example, if you’re buying a laptop, your main concerns may be battery time limits, screen size, and processor speed. It is therefore common that businesses will promote their products’ key attributes to allow for easy comparison.

A customer may want to investigate further after an initial preference, or they may want information on other attributes, and that’s where more detailed specifications come in, with potential customers searching them as they do their research. It’s important that all the information is there for an informed choice, but due to attribute overload, businesses can tailor what they show and at what stage.

6. Translating attributes

The way a product or service is presented to a person, and how clearly they understand the attributes (features or benefits) can have a huge impact on buying decisions. A product’s attribute could be quite arbitrary or non-impactful, but if these attributes are translated in a meaningful way, the customer is more likely to appreciate the product.

For example, by not taking their car into work and using public transport, someone may choose to use a public transport app that tells them how many trees have been saved and how much their carbon footprint has been reduced, over another app that simply counts the number of public transport journeys that have been made. The use of evaluative labels on the first app helped that person see the added value they were getting and made the app more attractive to choose.

How to apply choice architecture when designing experiences

In Thaler and Sunstein’s book, the authors said that if choice architecture exists then a choice architect must exist as well. This a person or a team who designs the environment in order to make a certain option more likely to be chosen.

Good design practice involves understanding the audience in depth to know what their needs, wants and beliefs are. For example, in the example above about public transportation, the app developers would need to have done their audience research to understand that their customers are environmentally conscious to know that the evaluative labels they chose would appeal to their target customer.

As you consider solutions that could help solve customers’ problems and fulfill their needs and wants, it’s also useful to think about how to present the solution to them as well.

For starters, you can use this mnemonic ‘NUDGES’ when designing choice architecture that helps you incorporate some of the key elements:

Incentives

When considering how to present the choices to your target market, what would incentivize people to pick your product? This can include financial motivation, psychological benefits, and positive benefits. Make sure that these incentives are front and center, and whether they need to be partitioned or translated.

Understand mappings

Include ways for customers to map their choice against the outcomes so that they can select the best option. One way to do this is using the RECAP method: Record, Evaluate, and Compare Alternative Prices. Another way is providing calculators or product demonstrations.

Defaults

Since people will choose defaults over other options, make sure your default is the preferred choice by your business. If you would like your customers to take action, think about what would help prompt or ‘nudge’ your target market into action.

Give feedback

Since short-term benefits are preferable to customers, consider what feedback mechanisms can be put in place to carry them through a long process or help them make a series of choices. This could be providing clear progress feedback (telling people which number step they are currently on out of the total number of steps) when purchasing a product or showing a positive reinforcement message when they have completed a task correctly.

Expect error

People will make mistakes and it’s useful to think about that when designing. If a selection process is too long, how can it be shortened to avoid biases from choices made over time? Also, consider if there are simpler ways to carry out a task. What could the customer do with the minimum of effort that would allow them to use the product quickly? For example, a quick-start guided tour over five minutes to train the customer on new software would save confusion and stress later on.

Structure complex choices

To prevent overload, make this simpler. People will want to choose simple over complex, so design the presentation of your product experience to be understood easily. Create structure through design and text, and translate the advantages clearly.

By integrating choice architecture into your product development and user experience development, you can use this behavioral tool to influence your customers and provide them with nudges that show off your products and services.

Survey research can be used to develop and test your choice architectureAttitudes and Usage surveys and Key Drivers Analyses can be used to assess market and consumer priorities. Brand trackers and concept testing can determine what makes your product or service stand out. Message testing and conjoint analysis can be used in testing presentation options.

By understanding how your experience design comes across, you can be agile and direct your focus towards making the products more attractive to your market.


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