Here is a blog post by Jeanette Söderlund Sause, Vice President – Industry Relations & Marketing, at DotGLOBAL (.global) Registry which has a very interesting take on the Paradox of Choice that registrants face and its consequences for the Domain Names industry. It drives home the point that the success of New gTLDs curiously enough, lies in the hands of stakeholders such as us – Registries, Registrars and Resellers than Registrants – since Registrant education is the key that can help address this paradox of choice. Over to Jeanette!
How can the Internet community use the psychological theories and studies of “choice” in managing and optimizing the recent expansion of the Internet? With the introduction of more than 1300 new top level domains (TLDs), Internet users have, quite naturally, been divided into two main camps – the excited and the skeptical. One way, there are many, to approach this is through the theories about “choice” and the psychology related to the number of options that one is presented with.
Paradox of choice
Outlined by psychologist Barry Schwartz in the book “The Paradox of Choice – Why More Is Less”, the paradox of choice refers to the idea that an increased number of choices might actually cause anxiety rather than a sense of freedom. The reasoning behind this theory is that at a certain point the effort required to collect enough information to be able to distinguish between the options might, to some people, end up outweighing the benefits of having the extra choice. Studies has also shown that when the number of options grow, the likelihood of some people actually refraining from making any choice at all increases.
The paradox of choice theory has been heavily questioned and referred to as pseudoscience by economists and psychologists that are pro-choice. Pro-choice argues that adding options generally doesn’t make a difference either way, and that it should rather be viewed as “pareto improvement”, i.e. that the extra options create a better situation for those that want them, but it doesn’t make the situation worse for the people that don’t, since all they have to do is to ignore them.
Pro-choice theories further point at the fact that if the effects of the paradox of choice was actual and true, then the markets would be more or less forced to adapt to it by limiting their offerings. That doesn’t seem to be happening. The number of choices and customization opportunities available to consumers are steadily increasing across the board.
To sum it up
Whether more options have a positive or a negative effect seems to vary depending on multiple factors, One factor that tends to generate a more positive attitude towards added choices is information. A person that feels well-informed on a subject, will be more confident in his/her ability to maximize the potential given by the added number of options, and therefore approach it in a positive manner rather than to feel overwhelmed by it.
Another way to avoid the risk of paralyzing effects due to too many options, is to organize the options into categories in a chart. Categories create an overview, as well as provide information. When it comes to new TLDs, the options can be divided into categories based on, for example, industry or purpose, and then ranked by relevance under each respective category, making strategic decisions easier compared to choosing straight from a clutter of 1300 TLDs. As the effort of organizing options this way might be difficult and time-consuming for someone outside of the industry, it might be a service worth offering and communicating by advisors, registrars and registries.
The decisions that brand owners have to make with regards to the new TLDs doesn’t only matter when it comes to strategies and the composition of their domain name portfolios, but also in their relationship towards consumers. As the amount of choices multiply in all markets, brands become more and more important. Actively taking care of the trademark and strategically evolving and navigating the new landscape is going to be crucial in order to retain and grow consumer trust for the brand, which in turn will be a guiding factor for the consumers, whenever they’re faced with multiple options. That active choices are made by brand owners is therefore of the outmost importance. An active and informed choice to stay passive is better, from a strategic perspective, than not addressing the situation at all.
On the other end of the spectrum there’s the situation when only one single option is presented. Would this be better? Not at all. In fact, it might even be worse. Daniel Mochon’s article on the “Single-option aversion”, is quite an interesting read on this subject.
However, the fact of the matter is that as of this year the Internet name space will expand and the number of available options will increase significantly. Choices will have to be made, and whether it’ll be received with enthusiasm or leave Internet users, brand owners and companies feeling overwhelmed and unwilling to be bothered, will largely depend on two things: presentation and information. This is key, and the responsibility to communicate the new choices properly lies in the hands of the Internet community as a whole. ICANN included.
p.s. This article was first published on Linkedin.
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