Archives / May 2007

What happens when customers want the wrong thing?

For example, in the current issue of the New Yorker, James Surowiecki writes that most consumer electronics are horribly complicated because, in part, they sell better:

...as numerous studies have shown, people are not, in general, good at predicting what will make them happy in the future. As a result, we will pay more for more features because we systematically overestimate how often we'll use them. We also overestimate our ability to figure out how a complicated product works.

In other words, the more features are packed into a product, the better it may sell, at least in the short term. Customers thus pay to get "the wrong thing" - the device they can't use, the software they'll never figure out - and companies then suffer, too, from unnecessary product returns, support calls, and poor word-of-mouth.

One possible response is to pack yet more features into a product, to sell even more units (in the short term) and help offset the increased costs of tech support and product returns. Taken to an extreme, a company can take this approach to all aspects of its operations: branding, marketing, packaging, as well as product design. Then at least the whole company is consistently following the same strategy.

Take, for instance, this (now well-known) parody of iPod packaging, if it was created by Microsoft:

This can be mistaken for a customer-centered approach. The thinking goes like this: customers tend to buy products with more features, and "the customer is always right," so the customer-centered strategy must be to pack everything with lots of unnecessary features... right?

I don't think so. Apart from the colossal waste of resources (physical, environmental, and financial) it requires, the main problem with this approach is the lack of long-term vision for the company or the customer.

The challenge is for the company to look beyond the short term to what will affect its prospects further on. (A short-term sales spike doesn't mean much, if half the products get returned a few weeks later.) A company's best bet, in the long run, is to deliver what customers really want: and that often isn't an endless list of features, but a genuine benefit - like productivity - or better communications - or some new skill. Delivering on the long-term value might require more disciplined product development, but it pays out in the end.

In other words: a strategic focus on creating a good customer experience - that is, acting in the long-term best interest of the customer - is the most effective investment any team or company can make.

The benefit of a customer experience strategy, by the way, is made stronger by the relative lack of companies that use such an approach. Many companies - most of one's competitors, in other words - still chase after short-term numbers by latching onto buzzwords, trends, and anything shiny. (See my note on the current Windows Mobile ad campaign.) It's an enticing opportunity - building a business by giving customers what they really want, not necessarily what they reach for in the short term.

From this Consumerist post, a new report shows that "the top 20% of the the American Customer Satisfaction Index (ACSI) greatly outperformed the the stock market, generating a 40% return."

Excerpt:

These startling findings help vindicate one of our central claims: investing in customer service and satisfaction is good for your bottom line.

"Cost-cutting" and "profit-enhancing" measures like outsourcing all your tech support to India, creating a byzantine apparatus for warranty repairs, and using rebate systems designed to trip up your customers will only hurt you in the long run.

(thanks, bb)

See also: Customer service is not customer experience

If everyone does it, does it still stand out?

Two thoughts on the matter.

First, the NYTimes reports that the buzzword of "experience" is becoming commoditized in the hotel industry. From Hotel as Lifestyle:

What Starbucks did for coffee and JetBlue did for air travel, a growing number of new hotel brands is trying to do for the overnight stay: create an experience that offers something different from the status quo, then replicate it around the globe. ... most aim to offer guests some type of "experience," the buzzword cited most often. ...

"We're trying to bring boutique to a more mainstream broad audience," [one hotel chain executive] said. "We kind of 'democratize design,' if you will."

Good experience isn't a commodity, at least in aesthetic environments like high-end hotels. Boutiques will move on to something else to stay ahead of the chains.

Next, from the NYTimes, Sex, Drugs, and Updating Your Blog, which profiles popular (online) musician Jonathan Coulton (emphasis mine):

[E]very day, Coulton wakes up, gets coffee, cracks open his PowerBook and hunkers down for up to six hours of nonstop and frequently exhausting communion with his virtual crowd.

Coulton's single biggest spike in traffic to his Web site took place last December, when he appeared on NPR's "Weekend Edition Sunday," a fact that, he notes, proves how powerful old-fashioned media still are. (And "Weekend Edition" is orders of magnitude smaller than major entertainment shows like MTV's "Total Request Live," which can make a new artist in an afternoon.) Perhaps there's no way to use the Internet to vault from the B-list to the A-list and the only bands that sell millions of copies will always do it via a well-financed major-label promotion campaign. "Maybe this is what my career will be," Coulton said: slowly building new fans online, playing live occasionally, making a solid living but never a crazy-rich one.

Coulton gets my respect for growing his community with such hard work online (I hope he's read Bit Literacy to do it efficiently!) ... but it's telling that the traditional media continue to have the most reach, by a large margin.

Let that be a lesson to anyone who thinks the online media have upended everything. It's still a small world online.

Google search results now include graphics. For the first time, as far as I know, the "text ads" on the right side include graphic links to Google Checkout.

For example, a search on fedders (an air-conditioning manufacturer) yields...

Given how zealously the company stuck to its all-text design for so many years, this seems like a significant change.

Delta Air Lines has launched, in their words, a "reinvigorated customer experience." And following the recent example of Dairy Queen, so far the most apparent change is in the logo.

Here's the old logo (or the most recent one, anyway; see the Delta Museum page for all of them).

Here's the new logo.

This change also kicks off a multimillion dollar investment in... advertising, of course! As I wrote in Budgeting for Advertising and the Customer Experience, investing in advertising and visual "branding" often takes away resources from improving the actual customer experience. So far Delta seems to be following the corporate script of "slightly change the logo at huge expense and declare victory."

Still, maybe Delta will surprise us. In the company's own words, from AdWeek:

Delta's new corporate brand identity is a red "Widget" logo that was unveiled April 30.

"Every element of this campaign is focused on how Delta is changing the travel experience for our worldwide customers, with tangible benefits including industry-leading in-flight entertainment, signature cocktails and time-saving self-service technology, among many others," Tim Mapes, vp, marketing at Delta, Atlanta, said in a statement. "The campaign communicates how we have modernized, upgraded and reinvigorated the airline, and we're continuing to change. We're also introducing an innovative, interactive component that will soon invite our customers to provide feedback on their travel experience and share ideas that will allow us to continue to serve them better."

See also: Defining "Branding" (the brand is what you talk about later!)

In almost any sort of experience, context matters a lot. For example, the two black dots at left are the same size - it's the context that makes them look bigger or smaller.

Another result is that container size can affect how much you eat. Your Plate Is Bigger Than Your Stomach - New York Times describes an experiment (and references those black dots):

Some people got merely big buckets, while others received truly enormous ones. Both sizes held more popcorn than a typical person could finish. Yet when the Wansink research team weighed the buckets after the movie, there was a huge difference in the amounts the two groups ate. Those with the bigger buckets inhaled 53 percent more on average...