According to the authors of very popular series of blogs “What Do Consumers Really Want? Simplicity” published recently on Harvard Business Reviews site:
“Consumers are overwhelmed by the volume of choice and information they’re exposed to, and marketers’ relentless efforts to “engage” with them.”
Simplicity is NOT limitation of choices. In fact, the complexity of offers often tends to mask the fact that multiple offerings are not really different from each other. Marketing noise overloads consumers’ cognitive capabilities and drives them to alternative sources of information to help them make purchasing decisions. That undermines the purpose of marketing communications and diminishes quality of overall Customer Experience. The customer satisfaction scores often reflect that.
We all read news earlier this year of Samsung overtaking Apple as the largest manufacturer of smart phones; however, the latest American Customer Satisfaction Index survey still finds Apple iPhone customers to be much more satisfied than any other smart phone customers. It is interesting to note that our own Customer Intelligence research shows that
” Apple 4S satisfaction has really jumped 12% with retirement of iPhone 4.”
while only one Samsung model out of dozens, marketed at that period (Q1 2012), earned similar accolades from their purchasers. How many of you heard about Infuse?
The question is, why does Samsung (and other companies) make it so complicated for consumers to choose their products? If product specifications differences are so important, why are there thousands of consumers searching the Internet with inquiries like “which smart phone should I get iPhone or XYZ?”?
One may say that these questions are not relevant anymore since Apple’s lock on the smart phone market was broken. I would like to suggest that the number of units sold does not automatically translate into profitability. Customer satisfaction much more closely correlates with higher margins. Samsung has to subsidize carriers to sell their phones, while the same carriers have to subsidize Apple for privilege of selling iPhones.
“It is unrealistic for any company, even Apple, to hold 100% of any market. The iPhone will never have majority share. It does not have to. What matters is profit share, and that is where Apple is winning. Apple earns73% of the cell phone industry’s profits with just 8.8% market share. “
This is just an example of a simple choice vs traditional approach to marketing, and it is not limited to smart headset market. Consumers do not buy technical specifications, feature sets or functions – that is what your engineers sell.
According to Peter Drucker
“The customer rarely buys what the company thinks it is selling him.”
He also famously said
“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself… The aim of marketing is to make selling superfluous.”
It appears that the marketing profession forgot its purpose, and instead of hearing what customers want to buy, they prefer to shout what they should buy, in marketing’s opinion that is.