“You and I are essentially infinite choice-makers. In every moment of our existence, we are in that field of all possibilities where we have access to an infinity of choices.” – Deepak Chopra

One of the main points Dr. Barry Schwartz makes in his book, “The  Paradox of Choice: Why More is Less”, is that when you give people too many choices, you remind them that they can’t have everything in life. In choosing one thing, they must give up everything else. And, as a result, they are less satisfied with the decision they made. This phenomenon is known as “opportunity cost” — looking at the psychological cost of an item from the perspective of what you had to give up to get it.

Using a trip he made to the mall last Christmas to illustrate the problems that unlimited choices are creating for consumers, Schwartz gave this example during an appearance on PBS Nightline:

“I said, ‘I want a pair of jeans, size 32-28,’ and the salesperson said, ‘Well, do you want slim fit, relaxed fit, easy fit? Do you want wide-boot-cut, wide-leg, peg-leg? Do you want acid-washed, stone-washed, regular?’ You know, I realized that I was spending an hour trying to do something that used to take me five minutes.

“I went to a stereo store, and I just counted how many speakers are there and how many tuners, how many amplifiers, and it turned out that in that store you could put together 6.5 million different stereo systems.”

In other words, if you were to buy a stereo system from that store in the mall that Schwartz mentioned, you could spend the rest of your life wondering if there were 6,499,999 other, better ones you should have chosen.

The concept of opportunity cost has been demonstrated in several important studies.

In one, people were asked to guess the price of magazine subscriptions. One group was given only one magazine and asked to guess how much it was worth. Another group was given three or four different ones to evaluate.

The first group — the one that didn’t have a choice — consistently afforded the same magazine a higher value than did the group that had to compare it with other magazines.

Schwartz and his colleagues found that people with a high sensitivity to regret the choices they make are generally less happy, less satisfied with life, less optimistic, and more depressed. Not surprisingly, they tend to be maximizers. Researchers have also found that people regret their choices in proportion to the responsibility they feel for the result and how easily they can imagine alternatives. As Schwartz points out, “When you have no options, what can you do? You will feel disappointment, maybe; regret, no.”

“Does all this mean that we should all be better off if our choices were severely restricted, even eliminated?” Schwartz asks. His answer is “no.” “Being able to choose has enormous important positive effects on us,” he says. “But only up to a point. As the number of choices we face increases, the psychological benefits we derive start to level off.”

Clearly, there’s a whole lot of science to support something that marketers — especially direct-mail marketers — have learned through experience. As Bob Bly explains in his book “The Complete Idiot’s Guide to Direct Marketing”, it’s a bad idea to offer your prospects too many options. “The reason is,” he says, “the more options you offer, the more difficult it is for the prospect to make a decision.”

How many options, then, should you offer your customers? What is not enough? What is “too many”?

There is no single answer — but three is a pretty good number to start with. Thousands of direct mail and e-mail tests have shown that customers buy more and return less when they are given two choices rather than one, and results tend to be even better when they are given three. Though some offers work well with four and five choices, those are the exceptions.