Paralysis by Analysis – Guilty as Charged

A reader wrote the following to Dan Ariely in today’s Wall Street Journal:

Hi, Dan.

I offered to purchase a computer as a gift for a close relative, and I asked him to pick out the one he wanted. But he simply can’t make a choice. He keeps comparing different models and researching all the available features, even though I’m sure he will never use most of them. How can I help him to make a decision? —Stanley

My first comment, before sharing Dan’s answer, is to point out the comma after the word “Hi” and before “Dan”. I know that putting that comma in there is proper grammar because one of our writing instructors pointed it out to me in an email I had sent her about five years ago. Despite knowing that it is the correct way to write it, it just does not seem natural to me, and I guess that I ignore the rule about half the time.

Anyway…

Here is Dan’s answer:

Choice paralysis, or what’s sometimes called “paralysis by analysis,” is a common problem. Some famous experiments in behavioral science have shown that making decisions is harder when you have too many options and too much information. To force your relative to limit his search, tell him that the two of you will sit down together and go shopping online for two hours; then you’ll buy the best computer you’ve found in that time. Using firm deadlines is a good way to combat our indecisive nature.

I feel for Stanley’s close relative because I am the same way.

I often put in way too much time researching what is the best option when I am about to buy something.

Logically, I know it makes no sense, particularly when I might spend a full evening or two trying to find the best of something, even though the total value of what I am planning to buy is less than $10.

Maybe it’s because I simply am trying to minimize the implicit cost associated with buyer’s remorse. So I probably tell myself subconsciously that it’s ok to put the time in upfront, before the purchase, because it will minimize the time you may have to deal with problems after the purchase.

But admittedly, I still spend too much time, even when using accounting for such reasoning.

It brought back memories of when I first opened my personal training studio, and I enrolled in a sales training program.

Our training studio only offered one-on-one personal training, and it was fairly expensive – $75 for a 45-minute session (this was more than 10 years ago). When a potential client came in, it created what our sales consultant referred to as a one-call close sales scenario. This meant we only had one shot to get this client to buy a package of training sessions; usually 20 sessions for $1,500. The research showed that if a client didn’t buy at that first visit, the odds were quite small that they would ever follow-up, despite their best intentions.

Part of becoming successful at these one call closes was being comfortable asking a potential client to spend $1,500 or more for personal training after such a relatively short meeting with them. I have to admit that I was somewhat uncomfortable asking for such a large sum of money; it’s certainly not something I would do, but I was told not to judge what other people may want to spend their money on.

We were also told that if a client started saying things like “I need to talk this over with my spouse” or “Let me think about it” or “Let me do some research on this”, you had to answer those in a way that encouraged them to make the decision right at that moment. In other words, we were trying to avoid, in one sense, paralysis by analysis. If the potential client left without making a decision, then they may never make the decision.

But again, our sales consultant told us we had to be comfortable making decisions the same way, to avoid the analysis by paralysis. Once we were comfortable doing so, the belief was that we would be much more effective at convincing our potential clients to do the same.

To teach us how to do this, the consultant gave all of us in the class an assignment.

We had to go out and buy something a little out of our budget, and without doing any research on it. The logic was that since we were essentially asking out potential clients to do so, so we had to be comfortable doing the same thing ourselves.

So like a good student I went home and asked my wife if she wanted to go furniture shopping. It’s not something we had even talked about doing, so she was a little surprised. We went to Raymour & Flanigan and within 10 minutes we ended up buying two couches and a love seat. It was more than I had ever spent on furniture, and certainly the fastest I ever made such a decision.

Admittedly, it was nice getting it over within such a short-time period, and fortunately, the decision turned out to be a good one, since we still have the furniture.

But I was never convinced that the exercise helped me as a salesperson trying to sell personal training sessions.

And soon enough I was back to my old ways, easily spending a week trying to decide what undershirt I should buy.

So after reading Dan’s response, it seems like one of the keys to avoiding paralysis by analysis is to set a deadline for making a purchase decision and to stick to it.

In hindsight, if I knew this earlier, I could have added a few years back to my life…

*image from Pinterest

 

 

 

 

 

 

 

 

29 thoughts on “Paralysis by Analysis – Guilty as Charged

  1. I get this and know that it is a common problem, more so for some than others. I have the opposite issue, I’m an impulse buyer and most things have worked out well, though some should have been better researched. My thought is that life is short and why spend time on this process, but that is because I am 97% right-brained. Somewhere in the middle is the sweet spot I imagine.

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  2. I don’t have this affliction. I do research, and the time spent doing so is likely relative to the expense. And then, I quickly make a decision based on the information I have. But, it is a ‘caveat emptor’ world out there.

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  3. By nature, I tend to be indecisive – Libra trait? – but when I’m committed to the buy, I’m all in. No regrets. So, I can’t claim many situations where cognitive dissonance has resulted. When it comes to techy stuff, I’ll call in the experts Offspring before throwing down to purchase. Otherwise, if I like it and The Bank Of Affordability suggests I can bear the financial brunt, its coming home with me on the spot.

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  4. Anytime I’m going to make a purchase for an expensive item like a car, I am obsessive about doing a lot of research online beforehand. Part of this is to make sure I’m getting what I really want. If something goes wrong with the item shortly after I’ve purchased it, I don’t feel nearly as guilty if I know I put in the time comparing brands.

    On the other hand, if I’m going to buy something much cheaper, I reach decisions more easily. One of the things I dislike shopping for the most is clothing. When I was still teaching, my wife and I would go clothes shopping once a year. I’d bring her along because she has a much better fashion sense than me. I never set any time deadlines like Dan Ariely suggests to do, but I subconsciously did that. After an hour or two, I’d lose patience and just want to go home.

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  5. I have been known to create comparison matrices – it comes from years of buying services for clients who expected a recommendation backed up with a report. But it gets silly – the time deadline is a good idea!

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  6. Another form of “deadline” is to self impose a reduction of the choices: people like Steve Jobs and Mark Zuckerberg famously (wore) wear a “uniform”, every day the same kind of outfit. Why? To not waste decision “energy” making a choice on something that can be decided in advance, by creating only a single choice!

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    1. I don’t have too much of a problem choosing what outfit to wear since I don’t have much of a wardrobe. But when I go shopping for clothes, I spend way too much time trying to decide what to buy.

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      1. Nah, cheap is a horrible word to use, especially because I can’t believe that you will be the type to save on everything else like food and heath? Because then I’m cheap too! Haha 😀 If it’s possible to get something for a cheaper price (as long the quality isn’t reduce) then I’ll even go to pre-owned shops for clothes.

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