Keeping Customers Loyal When There Is Too Much Choice

93% of consumers compare products online before making a purchase, and with more choice than ever, particularly when it comes to financial services, wealth management and digital asset management, the amount of choice can be confusing. 

For potential clients, it can be tempting to pick whatever’s easiest rather than struggle to find the best product amongst many, hence why so many people use retail investing apps, which already had 150 million users as of 2021, rather than building a relationship with a wealth manager. While many users of these apps and sites are playing as ‘armchair day traders’ smart investors can use them to quickly invest in index-tracking ETFs (exchange-traded funds), with many outperforming the market. This effectively takes care of the malaise that comes from the sheer level of choice in investing – investors can put their money in property, stocks, cryptocurrency, even whisky. All of these promise high returns and low fees, and nowhere will you find that any can be definitively called the ‘best’ or safest.

Here, I'll explore how the sheer amount of choice your clients have affects them, and how they are likely to respond to this kind of commercial environment. It will look at how you can respond in turn, creating digital experiences that cut through the overabundance of choice and keep customers loyal when they have every incentive to go elsewhere.

The psychology of consumer choice

For over a century now, the art and science of consumer choice has been a major concern. 19th and early 20th century adverts were blocks of text with very little in the way of design elements, with the idea being that consumers were rational value-maximisers who merely needed to know that product A has superior properties to product B. It would be an overstatement to say that this fact-based way to cut through consumer choice has gone away entirely – the famous Volkswagen advert that ‘changed advertising’ by putting emotional affect above simple persuasion still had several paragraphs of text about the car’s features.

Psychologists have studied ‘choice overload’ for decades, and have found it to have profound individual and systemic effects. Having too much choice can ‘shut down’ a person’s brain, leading to a process called ‘ego depletion’ – just as if you exert your muscles too much they will tire, your willpower can be over-exerted by constant simple choices (cappuccino, latte, flat-white, americano etc.) so that when important decisions need to be made you will lack the willpower to fully devote yourself to working out a solution to the problem. How to manage finances is one of the most important decisions a person can make, and the amount of mental effort that has to go into it is therefore extremely high. It is also something that requires long-term effort and constant monitoring – a marathon rather than a sprint.

Of course, in such an environment every company needs to do more than ever to stand out, and this only compounds the effects of ego depletion. Ego-depleted consumers are less likely to go to a different company, preferring to not have to make a decision, but they are also constantly bombarded by high quality, high frequency advertising that will induce at least a percentage of them to jump ship unless they have a very good reason to stay.

Breaking through the noise

More than simply making sure that you are first in SEO rankings, keeping customers loyal in the current environment means offering deep personalisation and a ‘white glove’ digital experience. 

This in turn flows from being able to gather rich data in a way that does not impinge on a potential user’s privacy. Previously, this had been achieved through opt-in newsletters and other GDPR-compliant sources, but today it can be much more subtle while still respecting a client or potential client’s privacy by tracking their activity on your company website and using machine learning to build a vibrant digital picture of each visitor, allowing you to customise your content offering accordingly.

From there, you can go above and beyond the standard offerings of many companies by having a fully customised digital hospitality service, allowing your clients and potential clients to consume the content you create, from market updates to seminars, in a way that looks extremely professional and conveys your company’s values, and value, to your clients. Doing so builds up personal connections between your company and clients that are still vital in an over-saturated environment. People only remember 1-10% of the ads they see in a given day in 24 hours, but they will always remember being given relevant information in a way that is specifically geared to them.