Tony Sceales Tony Sceales Head of Programme Development - 5G Programme - Department of Digital, Culture, Media and Sport - UK Government

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Opening Pandora’s box – how much choice is too much?

  • To avoid confounding customers, service providers need to get better at using contextual data to provide tailored propositions.


    Choice is a good thing, right? Yes, but only in moderation. Too much choice quickly becomes overwhelming, even for the most sophisticated buyer.  


    Check out, where you are invited to build your own custom chocolate bars using a bewildering array of, spices, grains, nuts and decorations. There are many, many possible permutations. How about white chocolate topped with cranberries, chilli peppers, walnuts and marzipan balls? Or what about dark chocolate with sour cherries, wasabi peanuts and gummy bears?


    The choice is yours. But will you choose well? The danger is, of course, you end up with a chocolate bar that tastes terrible.  


    business assuranceYou might argue that designing your own chocolate bar is meant to be fun, rather than a culinary experience. But excessive choice is an increasingly widespread phenomenon in the more competitive sectors of the economy.  Some restaurants, particularly in the U.S., offer diners a selection of up to a dozen salad dressings. Shouldn’t restaurants offer you the one or two dressings best suited to the salad you chose? After all, the chef is the expert, not you.


    Suppliers who bend over backwards to give customers choice may actually end up devaluing their proposition – if the customer makes the wrong choice, they aren’t going to enjoy their chocolate bar or their salad.


    Too much trial and error

    Even the leading lights of the digital economy, such as Apple and Google, need to do better in this respect. Try going through the laborious exercise of choosing a fitness app, for example, from the hundreds of options on Google Play or the Apple App Store, and you will see that both these online retailers have yet to perfect the consumer experience.


    In fact, consumers regularly download apps that aren’t what they need or want. Apple App Store has 1.3 millions apps available, of which the average person has 41 installed on their device, but uses only 28 apps in a month. I’d bet the number a person uses in a day is just five.


    As there is almost infinite shelf space available on the Internet, communications and financial service providers could also fall into the trap of offering customers lots of choice and not enough guidance. Some mobile operators already run this risk.  Their handset portfolios typically offer scores of (very similar looking) phones, potentially confounding the average buyer. I would posit that the success of the iPhone is partly down to the fact that Apple cut through all this complexity, by offering just one or two models.


    Less time, more targeting

    You would think that the primary role of mobile operators’ extensive and expensive retail estates would be to help consumers through the decision process. But too often the in-store consumer experience involves queuing, patchy advice and bureaucratic administrative processes. Walk into a typical operator store to buy a handset and you’ll be lucky to leave in less than 45 minutes – that’s valuable time few people have.


    Communication service providers (CSPs) need to become much more adept at using what they know about consumers to make them targeted propositions. For example, a CSP should be able to analyse an existing customer’s usage patterns and then select the three or four handsets that are going to fit their needs. In the case of a new customer, there needs to be a simple in-store tool that can help an individual select the right phone and the right tariff. The sales staff can then cut to the chase.


    At a recent summit hosted by SunTec in Atlanta, a senior executive from a CSP suggested that consumers should be presented with between three and five options, depending on the context. That feels about right to me and you could apply the same rule of thumb in the small business market and, possibly, even the enterprise sector, where big businesses are trying to move faster by spending less time and resources on procurement.


    Banks could also apply their knowledge of individual customers to make tailored propositions. Today, you might get the occasional message from your bank touting a new credit card or savings product, but these missives are rarely personalised or targeted in any way. Rather than trying to sell all customers the same standard gold card package, for example, why not offer individuals a package that suits their lifestyles. People who regularly travel from Europe to the U.S. might like a package that convert euros to dollars at an attractive exchange rate, together with free travel insurance and low fees for stateside transactions, for example?


    In other words, both communications and financial service providers can do more to tailor their propositions to the needs of individual customers, so those customers no longer need to spend time shopping around for the right product. To do that, service providers need to analyse contextual data in real-time and then make customers precise offers, wherever they are, through any channel. A few years ago, conducting this kind of data analytics at scale would have required a huge investment in major transformation programmes, but today’s technology enables mass customization with minimal risk and rapid time to market.


    Now is the time for service providers to cut through the complexity and help customers make the right choice.

    Tony Sceales
    About Tony Sceales Tony Sceales works as Head of Programme Development - 5G Programme at Department of Digital, Culture, Media and Sport - UK Government
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  • Derek Mitchell
    Derek Mitchell Have CSPs finally embraced the micro-segmentation needed to do this? This was a fundamental stumbling block only a few years ago, when even having 32 segments was too much.
    February 5, 2015