Make Life Easier for Your Customers!

Are the efforts of marketers making our lives harder or easier? This was one of the key questions asked by a recent comprehensive study of over 7,000 consumers carried out in the UK, US and Australia. In our information rich world, we are increasingly overwhelmed by choice. And too much choice paralyzes us – we simply can’t decide what to buy, so paradoxically, we don’t buy anything. The findings of this Corporate Executive Board study suggests that too often, firms that are spending huge sums trying to engage their customers on and offline are actually turning them away.

Some of the findings of this and other related studies, reported in a recent Harvard Business Review article make for fascinating reading. For example, businesses believe that some of the reasons consumers follow them on social sites are to learn about new products (73%), submit opinion on current products and services (69%), feel connected (64%) and be part of a community (61%). The extent to which these formed part of the consumer’s actual reasons were 51%, 49%, 33% and 22% respectively. So much for all the ‘relationship’ marketing efforts! Their main reason was to get discounts (60%) or to make a purchase (55%). Other interesting findings to note are that 70% of those using a mobile device to search are within hours of a purchase, while 70% of those using a desktop are on average a week away. Similarly, someone searching for ‘luxury cars’ is at an early stage of the buying decision process compared with someone who enters a phrase like ‘BMW vs Audi’.

The main recommendation of the article is that firms need to construct their websites to aid decision simplicity. This involves three elements. First, minimise the number of information sources consumers must touch before confidently moving forward to a purchase. Second, build trust – not in the brand, but in the information being gathered. And finally, make it easy to weigh up the potential options being considered. This involves not only the information provided but also the number of variants actually offered. Is all of this worth doing? Well it would appear so. Brands in the top quarter of the decision simplicity index were 86% more likely to be purchased than those in the bottom quarter, were 9% more likely to be repurchased and were a full 115% more likely to be recommended to friends. In 2012, less is more!

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Choices, choices, choices

In business, as in life, these days one of the biggest challenges that we have is the proliferation of choices available to us. What are the best choices to make in terms of growing your business? Where is the best place in the world to base yourself in terms of sourcing good job opportunities? What are the best blogs to read given your limited time!!! And so on and on and on.  

From both a consumer and business point of view, choice is a very important issue. As Barry Schwartz pointed out in his 2005 book The Paradox of Choice, choice is something that we crave, but when we have it, we do not handle it very well. It turns out that the more choices we have, the less likely we become to actually make a decision. And this has major implications for companies that pile on more options on their websites, add brand extensions to their ranges, increase their number of price points and so on. A simple jam experiment powerfully illustrates the problem Sheena Iyengar . A tasting booth was set up at the entrance to a grocery store that contained either 6 flavours of jam or 24 different flavours. The results were fascinating. When the booth contained the 24 jams, consumers were about 50 per cent more likely to stop and examine the display. However, only three per cent of them bought a jar of jam whereas when there were only 6 varieties on offer this number soared to 30 per cent. It would appear that, on average, we are not well programmed to deal with abundance!

If choice paralyzes us in the shops, can it do the same in the boardroom? A new book entitled Repeatability suggests that it could. As businesses grow, they become more complex and it is this complexity and the resulting inefficiency that is often their silent killer. The authors argue that firms need to engender a cult of simplicity, that is, build a core business model and apply it repeatedly to new opportunities. Witness for example the success of IKEA with its flat pack furniture or Nike with its branding expertise. This perspective rekindles the age old adage of ‘sticking to the knitting’ which can be effective but can also leave firms vulnerable to disruptive innovation. However, one thing it does demonstrate is that strategy is ultimately about making choices, difficult as that is for us humans to do.