opinion

Commentary

It Pays To Be Simple

We know that, overall, consumers are willing to pay more across categories, from health insurance to retail, for simpler experience, products and services. It’s pretty straightforward: simplicity pays. However, willingness to pay more for a brand to get simpler and the perceived simplicity of a brand do not completely correlate.

For example, BlackBerry isn’t exactly considered a simple brand, yet BlackBerry users are willing to pay a high premium if they could only get simpler products and services. Every brand has a unique relationship with simplicity and should address simplifying in a way that makes sense for them.

Brands’ relationships with simplicity can more or less be broken down into four groups, each with different needs and opportunities:

1. Achieving

The brands that are fully achieving the value of simplicity and stand to continue to do that. They are both perceived as simple and their customers’ would pay a significant premium for them to get even simpler. As an example, Netflix is not only perceived as one of the simplest brands, but Netflix users are willing to pay a higher than average premium if they simplify further. This demonstrates a brand whose users have a strong belief that it will keep improving and delivering ever simpler experiences, ones that are worth paying for. These brands have the permission to double down on leveraging simplicity, not only as a differentiator but also as a key business driver, now and in the future. 

advertisement

advertisement

2. Stalling

The brands that are stalling in driving value from simplicity. Consumers see them as simple but are not willing to pay much more if they get simpler. The Gap is an example of a brand in this group: consumers see The Gap as a simple shopping experience but can’t see how The Gap could simplify much further or at least not in a way that would be valuable to them. As a contrast, Old Navy, another Limited brand, is seen as both simpler and deserving of a higher premium if it simplifies further, putting it in the Realizing group. Brands in the Stalling group need to focus on creating fresher simpler experiences: their simplicity has become expected with no value-add in sight. 

3. Slacking

The brands that can drive great value from simplicity but are currently failing to do so, thereby slacking on realizing value. These brands are not currently seen as simple but their customers are willing to pay more if they did manage to simplify.  AT&T is an example here: really failing at being seen as simple yet a strong premium if they succeeded. Brands in this group should feel the greatest urgency to get simpler: the bar is low and the value is high. 

4. Snoozing

The brands that are snoozing: they are not seen as simple and their customers can’t see paying more if they get simpler, likely because their current lack of simplicity feels so ingrained, it is hard for customers to imagine how it could get better, much less in a way that is actually worth paying for. State Farm falls in this group: per most insurance brands, State Farm is not seen as simple and its customers cannot foresee how the brand could provide simpler services and products that would be worth paying more for. The brands in this group are really in a state of ingrained distrust due to their lack of simplicity. These brands have a fundamental complexity problem and they need to fix it before they can unlock further value from customers.

Research has continued to prove the value of simplicity to brands. This value is not a one-time thing but, per this new analysis, also an indicator of the future potential of brands. Sustainable value for brands depends on how well they focus on delivering not only remarkably clear but also unexpectedly fresh experiences to their customers.

Next story loading loading..