Despite a still challenging economy, UK consumers are willing to pay more for brands that deliver simpler experiences and interactions, according to a new study.
This is a key finding of the first annual Global Brand Simplicity Index, released today by global strategic branding and design agency, Siegel+Gale.
The survey of more than 6,000 consumers across seven countries uncovers the perceived points of complexity and simplicity in people’s lives, as well as the Simplicity Premium, the added value people would place on having a more simplified experience with brands in various industries.
According to the survey, a stock portfolio of the top 10 publicly traded brands in the Global Brand Simplicity Index would have made a 79.9% ROI from January 1, 2009 to December 31, 2010 Invested in the S&P 500 – you would have only made a 35% ROI, Dow 28.1% ROI, DAX 39.0% and FTSE 29.3%!
While many brands have the opportunity to reap financial rewards by providing simpler experiences and interactions, the amount consumers are willing to pay varies by industry. Between 5 and 15 percent of UK consumers are willing to pay more for brands they believe offer the greatest value of simplicity.
This figure similarly reflects the US report (7 to 17 percent), however is not as high as other countries surveyed, e.g. India, China and the Middle East, where between 11 to 34 percent are willing to pay a premium for greater simplicity.
In the UK, Fitness, Travel: air, Restaurants/ Entertainment and Technology/ Electronics industries stand to gain the most, where consumers are willing to pay a premium of at least 4 percent more for brands they believe offer the greatest value of simplicity. The mortgage, credit card and insurance industries are rated as most complex and least clear.
Capturing the Value of Simplicity
To pinpoint the role and value of simplicity in consumers’ lives, the Siegel+Gale survey examined respondents’ answers to the following types of questions:
• How complex or simple do people feel their lives are? Over the years, how has this changed?
• What business sectors contribute most to making people’s lives simpler or more complex?
• What brands are clearest and simplest in their communications and interactions with consumers?
• What value do simple communications and interactions provide to consumers?
Motivated by the power of simplicity to help organisations realise their true potential, Siegel+Gale used the survey results to develop the first ever Global Brand Simplicity Index™ which generates a Simplicity Score™—a rating of each brand and its category on the elements of the simplicity methodology. Siegel+Gale define simplicity as ease of understanding, transparency, caring, innovation and usefulness of communications, as well as how painful typical interactions are in relation to industry peers.
The UK Brand Simplicity Index top 10 brands include:
# Brand – Brand Simplicity Index™
Score®
1 – ASDA – 921
2 – amazon.com – 879
3 – Sainsbury’s – 872
4 – Tesco – 850
5 – McDonald’s – 834
6 – Burger King – 822
7 – BBC – 821
8 – The Sun – 818
9 – Travelodge – 815
10 – Boots – 809
Key survey findings from respondents revealed that the top brands on the Global Brand Simplicity Index™ make people’s lives simpler by:
• Communicating directly, clearly and without jargon
• Reducing stress by providing savings/value
• Saving time by increased convenience and accessibility
• Facilitating ease of use and interactions
• Enabling consumers to get more from life: deeper relationships, easier lifestyles
Further supporting the evidence that simplicity is at a premium one commented regarding McDonald’s, “Food is simple. It does need to be explained using technical jargon.”
“This survey identifies the industries, consumer segments and geographies where it’s possible to differentiate and command a price premium based on simplicity,” said Howard Belk, Siegel+Gale co-CEO and chief creative officer. “If industries like mortgage, credit card and insurance want to regain consumer trust and thrive in this tough environment, they need to take a hard look at the negative repercussions of complexity.”
Key survey findings from respondents revealed that the lowest rated brands on the Global Brand Simplicity Index™ make people’s lives more complex by:
• Communicating in ways that are hard to understand and/or perceived as deceitful
• Being perceived to intentionally overcharge
• Being seen as ‘niche’ or targeted to too select an audience/not accessible
• Being found difficult to interact with, with poor customer service experiences and/or hard to use interfaces
“It’s a fascinating survey,” says Professor Rob Waller, Director, The Simplification Centre. “It shows that in a world of feature-obsessed competitors desperate to differentiate themselves, customers actually value simplicity, and claim they would pay more for it. Some of the rankings are not too surprising – after all, grabbing a burger is always going to be easier than choosing a retirement plan. But credit card brands, a product designed to make life easier, should hang their heads in shame at their consistently low rating. The customer comments illuminate the data, and make you wonder what the world would be like if the simple brands (McDonald’s, Nokia, Amazon) ran the banks.”
Review the full survey results here.
Source: www.siegelgale.com