Thursday, March 18, 2010
Strategic Planning Analogy #313: Choosing Frustration
I recently purchased a brand new car. This car is loaded with all sorts of features, more than on any other car I have ever owned.
One of the features on this car is a driver’s seat with seemingly infinite adjustments. I have nearly infinite adjustments:
a) Forward and Backward
b) Up and Down
c) Clockwise or Counterclockwise on the seat bottom
d) Clockwise or Counterclockwise tilting of the seat back
If that weren’t enough, there is a separate adjustment for the pedals, so that I can move them either closer to or further from the seat.
You’d think that with all those adjustments, I’d be overjoyed. Surely with that many choices I should be able to find my perfect setting for the seat.
Unfortunately, just the opposite has occurred. There were so many options that I had no idea which is the best. I sat in that car quite a long time trying a wide variety of seat settings until I became completely confused. Eventually, I just picked a setting I knew wasn’t awful, but didn’t feel perfect.
I will never be completely satisfied, because I have not tried every conceivable combination. There will always be a nagging feeling that if I only spent a few more hours, I could find a slightly better configuration. It will always feel like I am sub-optimizing my seat-comfort potential.
One important strategic decision which typically needs to be made concerns the breadth of assortment you offer. How many choices should I offer? What should those choices be?
In this web 2.0/3.0 world, this is getting even more complex. Consumers can have more say in what you offer and may even help in the design of your offerings. In addition, small batch/flexible manufacturing and digital tweaking of software makes it ever more economical to increase the range of what you can economically offer. The potential offerings can become nearly infinite, just like the adjustments on my car seat.
At first, an infinite number of options sounds great. That way everyone can get exactly what they want—and isn’t that what we’re in business to do?
Unfortunately, the situation often ends up more like my car seat. The more options you give, the more you confuse the customer. The customer actually ends up less satisfied, because there is this nagging feeling that perhaps there are other options in that infinity of choice which might be just a bit better. Perhaps purchases are delayed because it is too difficult to make a choice. Or maybe decisions are put off because potential customers expect current options to become obsolete due to ever more new options. Or maybe the customer goes to a competitor, where the process is less bewildering.
The principle here is that there is a big difference between selection and satisfaction. Often times, they can even work in opposite directions—increased selection can lead to decreased satisfaction.
Too much selection can raise expectations. The reasoning behind this thinking is that with added choice, I should expect to find something more to my particular liking. The odds of “perfection” should go up with near-infinite choice.
With higher expectations, what has happened is that I’ve increased the likelihood that the customer will be disappointed. Why? The higher the customer sets the expectation bar (closer to perfection), the more likely I will fail to exceed the bar, causing disappointment. Instead of under-promising and over-delivering (a method to increase satisfaction), infinite selection over-promises the benefit of choice and frequently does not live up to the hype.
Purchasing is about more than just the product. It is also about the process surrounding the product—the process of making a choice, buying the product, and using it after purchase. If the process is too burdensome, then the customer will be turned off—even for a good product.
Too much selection and flexibility can make the product or service harder to choose, more difficult to purchase, and more confusing to use. The process can destroy the overall value associated with the product.
Solution #1: Impose Limits
About 100 years ago, Sears discovered that the optimal selection for many of the items they sold was 3—one “good” (the low price option), one “better” (the best of both worlds option), and one “best” (the high quality option). Any more than three just added confusion (without adding sales).
Things in this regard haven’t changed all that much over the last century. In the US, Meineke Car Care Centers today give customers a choice of service levels, but limit it to three: Basic, Preferred or Supreme (sounds a lot like the old good, better, best).
Just because you can increase selection does not mean you should. Perhaps you should impose limits to choice.
Solution #2: Don’t Focus on the Product, Focus on the Consumer
When you focus on the product, you can start obsessing on all the things a product can do. The quest for product perfection takes control. Features, choices and flexibility can expand and get out of hand. Multi-function, do-it-all products rarely fare as well as simpler specialty products.
Rather than focusing on the product, you can focus on the consumer. Find out what the customer is trying to do and build a customer solution. This customer focus may lead to even abandoning the old product and going in a new direction.
The Corporate Strategy Board has a white paper about a B-to-B company called Alpha (a pseudonym to protect the customer’s identity). When developing their assortment, Alpha goes out and talks to the potential users of the product. They do not ask product-centered or feature-centered questions. Instead they ask them about their job. What is it they are trying to accomplish? What outcomes would make their job more successful?
Then, instead of offering infinite choice, they engineer a product specifically designed to improve the job of the one who will use the product. The customer is the hero (better at doing job) rather than the product.
Solution #3: Focus on the Process
Another alternative to product focus is process focus. What if you could offer near infinite choice, but eliminate the time, confusion and frustration of the process normally associated with infinite choice?
To illustrate, I will use another seat example—this time a bicycle seat. Once, I was in the market for a new bicycle, so I went to a bicycle shop. They had a wide selection that was a bit intimidating.
The salesman quickly pulled me aside and had me stand on a computerized platform. This computerized platform (with the salesman’s help) measured a number of parts on my body. Then the computer determined the optimal bicycle configuration for my body. The salesman adjusted the (near-infinite potential) seat to this optimal level and had me sit on it and try it out.
This made the process so easy. The computer did all the work. I didn’t have to worry about the infinite bicycle seat options—the computer found “perfection” for me (and the salesman set it up at the perfect position). The process substituted confusion with confidence (after all, the computer had no reason to lie and the salesman implemented what the computer said). It would have been great if they would have done something similar at the car dealership.
Selection is not the same as satisfaction. Increased selection can actually reduce satisfaction. Rather than rushing to pursue more choice in your offering, consider limiting your offering and putting more focus on the consumer or the purchase process.
In the end, the customer doesn’t care how many thousands of products you have to sell. They are only buying one of them. Focus on making them happy with the one they eventually buy.