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A few weeks ago I read an article in the McKinsey Quarterly that used observations from behavioral economics to recommend simple guidelines for marketers. The conclusions were striking in how strongly they resonated with our thinking about how we approach our products and markets.
- Make a product’s cost less painful
- Don’t overwhelm your customer with choice
- Position your preferred option carefully
The first is a basic rule of getting your product accepted. The ultimate cost of the product or service isn’t the amount that is paid; it’s the financial cost plus the time and energy that your customer has to commit to use or integrate your product. And, your customer always has the choice of doing nothing.
In many cases, the easiest way to get a customer to chose or switch a complex product is to do the work required to get the product up and going. We forget this sometimes as we use technology to put tools in the hand of the customer. If working with those tools simply accomplishes the transfer of work from the seller to the buyer, then the tools are ultimately of no value to the customer.
A good, counter-intuitive example is Google‘s customer experience for AdWords. Think of AdWords and you think of a self-serve model that reduces Google’s sales and service costs.
When you use AdWords, however, you discover that the tools enrich your understanding of your market…that, in fact, the automation of the AdWords system reduces that amount of time that a customer needs to spend to create and implement an advertising program on the search engine.
The second guideline speaks to the importance of keeping your product or service as simple as possible. When you adhere to simplicity, you create the opportunity to build strong and lasting relationships with your customers. Think of simplicity as a simple definition of what you do that makes complete sense to your customer. “I create qualified business leads for you.” “I provide easy-to-access business intelligence for you.” “I create great marketing experiences for you.”
The simplicity should be a filter that lets you take away unnecessary choices from your your customer. It’s too easy to keep adding new features, or to build functionality into a service that is unrelated to the core promise.
The final rule admonishes to know what we want to sell. In our business, we should always have a preferred option, a product or service that we offer that we know we can delivery effectively and profitably.
Businesses too often fall into the trap of believing that having a broad menu of options, or a wide array of choices, creates more activity from customers. The McKinsey monograph argues that this complexity runs counter to our ultimate goals.
You can find the article here; the full article is behind a subscription wall.
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