15/07/2016 - 06:12

The move to simpler marketing

15/07/2016 - 06:12

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The belief that the public can consume its way to happiness has been the prevailing doctrine (certainly in the Western world) for more than a century. But does it work?

Aldi has a clear, effective business model.

The belief that the public can consume its way to happiness has been the prevailing doctrine (certainly in the Western world) for more than a century. But does it work?

The short answer is no, it does not. Research shows that buying stuff, beyond meeting our basic needs, fails to make us truly happy.

The evidence is clear; our wellbeing depends on giving to others rather than spending on ourselves, buying experiences rather than things, and buying and producing locally rather than grabbing ever more globally sourced products.

The problem is that these findings are not new, and will likely do little to change our consumption behaviour, and even less in changing firms’ modus operandi.

But there is something business can do – stop confusing us. Start making things simple. Yes, less is more. Consumers do not appreciate clutter or fine print; they appreciate everything transparent, clean and easy.

Nearly a hundred years ago, Albert Einstein exhorted us to make things ‘as simple as possible, but not simpler’, and his directive is even more relevant today in our constantly connected, yet distracted, culture.

Consumer confusion abounds, however. Some of my own research results reveal that just about every known marketing tactic is perceived as lacking in simplicity. A lot has been written about excessive product choice paralysing consumer decision making. But consumers are also confused about marketing tactics like pricing, and wonder why some products are almost always on special (while others never are*), and whether half-price offers mean that we usually pay twice as much as we should.*

Similarly, product claims and packaging are often blamed for increasing consumer confusion. Do you know the difference between ‘Product of Australia’ and ‘Made in Australia’? Also, products claiming to be ‘natural’, ‘real’, or ‘healthy’ are usually hiding behind meaningless terms, undefined in labelling law, merely meant to persuade rather than inform people. The result is even more consumer confusion. So what can brands do?

Ironically, the answer to this question is not simple. It takes an awful lot of work to make things simple. Even a website that you visit once in a while and find easy to navigate may be the result of years of painstaking work, with many difficult decisions made behind the scenes about what should go where, and just as importantly, what should not be included.

More often than not, it is a question of making things appear simple. Ken Segall, author of Insanely Simple, and Steve Jobs’ advertising go-to, illustrates how it can be done with an example of different laptop brands. In a recent interview, Segall said: “HP has 41 models, and Dell has, I think, like 20-something, 24? Apple has three, but in truth Apple has configurability so that you can create 40 models, but they make it appear simple. I think a company like HP or Dell could benefit from that by saying, for starters, we don’t need X number of body styles. We don’t need 120 of them. Let’s cut it down to five and then let people build what they want out of that.”

Marketers need to understand that consumers rarely inherently care about brands. Whether they buy a carton of milk or a new laptop, they often want to invest the least amount of effort and time in making the right decision.

Overloading consumers’ already saturated brains with all kinds of marketing tactics will likely backfire. Consumers tune out, and do not even show much interest in 90 per cent discounted product, as Dick Smith’s closing down sale showed.

Instead, every decision brands make should be guided by a desire to help customers feel confident about their choices.  

Fortunately, there are a few companies that understand the principles of simplicity in driving customer satisfaction. Aldi’s success, for example, is often attributed to its simple business model of providing consistently low and transparent price comparisons for a reduced range of high-quality products. So in response to Aldi’s threat to Coles and Woolies’ comfortable Australian supermarket duopoly, the latter’s bet on a facelift of its Homebrand products is missing the bigger picture.

If firms make things simpler for consumers, it will make us happier (even if true happiness may continue to elude us); we will be less likely to make purchasing decisions we regret, buy less but better. I, for one, would welcome a new temple of consumption in Australia if it succeeds in achieving this goal.

Apple, Aldi, but also Netflix and Uber are only the beginning. We will likely see more and more businesses that provide what customers want, where, how, and when they want it. As simple as that.

Companies that defend complex, established business models will lose in the long run. Watch out Australia, we’ve only seen the beginning. Things are about to get real simple, well, eventually.

*Many products are constantly on special to get consumers through the door, but firms typically still turn a profit, for instance, by only discounting what is overpriced in the first place and/or does not cost a lot to produce, such as high-energy, nutrient-poor junk food.
**Yes, half-price offers are an indication that we usually pay too much for that product, unless so-called loss-leaders are on offer; loss-leaders are meant to lure customers into a store who usually end up buying many additional things and, in so doing, make up for a brand’s unprofitable sale of a loss-leader.

(This article previously appeared in The Conversation)

• Dr Richard Gruner is an assistant professor of marketing at The University of Western Australia Business School. 

 

 

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