An interesting update on one of the examples we used in our Choice Optimization paper.
We mentioned how credit card companies offering a complex array of products risk overwhelming their potential customers with too many choices (‘purchase paralysis’). One way to reduce this risk is to ask customers questions about the product features that is important to them (reward card vs. low APR card) and then use the answers to narrow down the choice of products (explicit filtering). However, as we pointed out
“….this process indicates to customers that there are additional options available to which they are not being exposed. Also, explicit filtering still introduces the risk of regret…â€
Capital One seems to have figured out a way to overcome the risk of regret through their new online Card Lab feature. Built for customers who are evaluating new cards from Capital one, it uses a very simple intuitive design to let a potential customer understand the various tradeoffs between features and choose the card that best suits his/her need.
As the customer tries out the various options, a huge amount of data will be collected. This can be used to generate insights to develop new products.
This tool is applicable to situations where consumers are making trade-offs between product features and options while shopping online. Whether it is buying auto insurance, cable/wireless service or a digital camera – it makes choosing the right product a simple and transparent process for the consumer and might result in less abandoned carts and more sales for the company.
{ 3 comments… read them below or add one }
Yes, but is the CapOne Card Lab an example of “purchase paralysis” in and of itself? There almost seem to be too many choices available. What’s the right balance?
Jeff,
Thanks your comment.
True that there are too many choices available. But this is to the self selected group of folks who chose to build their own credit card. If you want to simpler choices and have a better idea of what you want – you probably will not come to this section. You will go here
As the customer tries out the various options, a huge amount of data will be collected. This can be used to generate insights to develop new products. – Conjoint analysis?