• by Aaron Baar , February 16, 2011

In these complex times, consumers crave -- and are willing to pay a premium for -- simplicity when it comes to brand selection.  

According to a new survey by branding consultant Siegel + Gale, U.S. consumers are willing to pay a 4-6% premium for brands they believe offer a greater degree of simplicity (defined as ease of understanding, transparency, caring, innovation and usefulness of communications, as well as interactions in relation to industry peers) over their competitors. Extrapolated out across all industries and sectors, that could translate into $27 billion more, says Siegel + Gale co-president and CEO David Srere.

According to the survey, health insurance brands could gain the most -- an estimated $6 billion -- by offering greater transparency and simplicity in their products, says Brian Rafferty, global director of consumer insights for Siegel + Gale.

"People were willing to pay significantly more to get simpler communications" from health insurance companies, Rafferty tells Marketing Daily. "It really is about peace of mind. You hear a lot of complaints about health insurance premiums. But what they're really complaining about is paying for things that they're not clear about."

Siegel + Gale's "Simplicity Index" survey asked respondents how simple or complex they felt their lives were, how that complexity changed over time, what business sectors contributed most to making lives simpler or more complex, and what brands were the clearest and simplest in their communications and interactions with consumers. Some of those questions were open-ended, giving respondents the chance to offer greater insight into the value they placed upon simplicity.

The company used those responses to generate a Brand Simplicity Index and a Simplicity Score, which rated each brand and its category on the elements of simplicity. On that index, the top 10 brands are (in order): Netflix, Subway, McDonald's, Dunkin Donuts, Burger King, Walmart, Trader Joe's, Kroger, Starbucks and Old Navy.

Many of those brands have things in common such as communicating without jargon, reducing stress by providing savings or value, increased convenience or accessibility and enabling consumers to live easier lifestyles, Rafferty says.

"They're all about the customer interactions and how the choices were communicated to people," Rafferty says. "Complexity or not being straightforward creates distrust."