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Working Paper

Order in Product Customization Decisions

Jonathan Levav, Mark Heitmann, Andreas Herrmann, and Sheena S. Iyengar, 2008 [08-107]

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How does order of product attributes influence consumers as they make customization decisions? Here, authors Levav, Heitmann, Herrmann, and Iyengar examine that question in several experiments involving major durable products. In each experiment, participants were asked to configure a product (a men’s suit or an automobile) with multiple attributes, each attribute including multiple options to choose from and different attributes having different numbers of options.

Their results suggest that order of attributes changes people’s revealed preferences in customization decisions for major durable goods. When attributes with relatively few options follow attributes with relatively many options, people appear to be mentally depleted and are more likely to accept default options than when the sequence of attributes is reversed.

These findings have implications for the marketing of mass-customized products that involve a sequence of customization decisions. In particular, firms can use the interaction between the sequence of decisions and the pre-selected default alternative in order to promote the choice of certain attribute combinations. Defaults can be a particularly effective marketing instrument at the end of a decision making sequence as opposed to its beginning, provided the earlier attribute decisions were more complex.

Furthermore, starting decision-making sequences with relatively simple decisions (i.e., fewer alternatives) followed by relatively complex decisions (i.e., more alternatives) leads to higher overall satisfaction with the product as well as with the decision-making process. Importantly, satisfaction and price paid in studies were not correlated, which suggests that customer satisfaction is highly dependent on the decision-making process. This finding should be of particular interest for firms who sell mass-customized products whose price does not differ greatly (e.g., fashion items such as running shoes), and may use product attribute sequence to influence customer satisfaction.

About the authors
Jonathan Levav is the Class of 1967 Associate Professor of Business at the Columbia Business School. Mark Heitmann is Professor of Marketing at Christian-Albrechts University in Kiel. Andreas Herrmann is Director of the Center for Business Metrics and the Audi Lab for Market Research at the University of St. Gallen. Sheena S. Iyengar is Professor of Management at the Columbia Business School.

Included in the following collections:
Executive Director's Letter 08-002
MSI Reports 2008

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