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There's Value in the Simple Things
Customers not only appreciate simplicity; they'll pay more for it too.
For the rest of the May 2012 issue of CRM magazine please click here
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In an increasingly complex world, consumers have indicated that the brands that win their loyalty are those that keep things simple.

According to a recent survey by branding consultant Siegel + Gale, consumers are willing to pay an average premium of 5 percent to 6.5 percent for brands they believe offer a greater degree of simplicity (defined as ease of understanding, transparency, innovation, and usefulness of communications) over their competitors. The company's "Global Brand Simplicity Index" polled more than 6,000 people from the United States, the United Kingdom, Germany, Dubai, Saudi Arabia, China, and India.

In the United States alone, companies that do not take the value of simplified solutions seriously are leaving $27 billion on the table, according to Siegel + Gale co-CEO and Chief Creative Officer Howard Belk.

"Obviously it's harder for an insurance brand to ever be as simple as a fast food brand, [but despite that] the brands that do well are the brands that care about the total experience—from the product to customer service," adds Brian Rafferty, global director of consumer insights at Siegel + Gale.

Siegel + Gale's "Simplicity Index" survey asked respondents how simple or complex they felt their lives were, which industries contributed most to making their lives simpler or more complex, which brands appeared to care about their customers, and which brands were the clearest and simplest in their communications and interactions with consumers.

Based on the responses, the company generated a Brand Simplicity Index and a Simplicity Score. The top 10 global brands, in order, are: Google, Amazon, IKEA, McDonald's, Apple, Nokia, Pizza Hut, Marks & Spencer, LG, and Starbucks.

Many of these brands share similar perceived qualities, such as clear communication and ease of use, Belk notes.

"What we find with the winners is that they express very clearly the intent of their product or service, the purpose of it, and how you use it. What people take away from that is feelings of confidence, trust, and satisfaction, which leads to loyalty," Belk maintains.

Although Google claimed the top spot in the survey, the results were tabulated before the company had announced changes to its privacy policy. Google's plan to roll 60 privacy policies into a single one and combine information it collects about its users was quickly slammed by analysts and users as alarming and frustrating.

It still remains to be seen what the impact of the policy change will be; however, Google might not do as well in the next simplicity survey, Rafferty notes. "As things evolve and people start becoming more mindful of the underpinnings of technology, some of these perceptions might change," he says.

As Netflix also learned, transparency plays a major role in consumers' perception of a brand.

Netflix faced a huge backlash last summer in the wake of a price hike and the decision to split its DVD and streaming services. The move, which was criticized as being unclear and poorly communicated, cost the company approximately 1 million subscribers.

"We see that simplicity equals trust," Rafferty says. "When a company is too complex in how they communicate or operate, people don't see it as an accident. They see the company as being too complicated because it is trying to deceive them."


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