Simplifying The Brand Experience Said to Pay Dividends

October 18, 2012

Depending on the industry, nearly one-third of American consumers would be willing to pay a premium for simpler brand experiences and interactions, according to [download page] Siegel+Gale’s 3rd annual Global Brand Simplicity Index, released in October 2012. Simplicity is defined as the ease of interactions and communications with a brand (e.g., researching, purchasing, interacting with customer service, etc.). For some industries, US consumers report they are willing to pay premiums upwards of 3.5% for simpler experiences.

US respondents will pay the highest premiums (4.1% or more) to restaurants and grocery stores and chains for simpler expericnes. They will pay 3.6%-4% for simplified experiences and interactions with health insurance providers, social media, fitness facilities and car rental agencies.

Other industries that stand to benefit from simpler experiences include media; general retail; cars; electronics; appliances; hotel stays; apparel; train travel; cable TV; air travel and utilities; all of which consumers say they would spend 3.1%-3.5% more on.

Finally, they will pay up to 3% more for simpler experiences in health and beauty retail; ground shipping; travel booking; cell phone service; general insurance; internet retail; banking/retail (meaning consumer banking); and internet search.

Google Simplest Brand, Google+ One Of The Least

Global respondents ranked Google first for brand simplicity among 94 brands, citing the speed of results and simple user interface. Second ranked McDonalds provides fast results from a very easy-to-understand and consistent menu. Rounding out the five simplest brands are Ikea, C&A and Apple.

By contrast, Google+ ranks among the bottom 10 brands for simplicity. Also among the bottom 10, Groupon, with complaints by consumers about small print, an overload of emails and poor customer service. Joining these brands (among others) are easyJet, RyanAir, EuropCar and Groupon, Bupa (a health insurance and services provider) and German utility company E.ON.

Several Industries Stand To Gain

The researchers estimated how much industries stand to gain from US consumers by simplifying interactions and communications by contrasting consumers’ responses regarding premiums they are willing to pay versus their perceptions of those industries.

US health insurance providers stand to gain the most ($5 billion) by simplifying the consumer experience. Banks stand to gain $3.3 billion (e.g., in higher checking fees, fees for bank cards, ATM fees and interest points). Third are grocery stores and chains, at about $3 billion, followed by restaurants at $2.6 billion. Utilities round out the top five at $2.3 billion.

Other Findings:

  • The premiums Americans are willing to pay are fairly low compared to global consumers overall. Depending on the category, global consumers will pay an average premium of 4.9%-7.2% for simpler communications and interactions.
  • 80% of global consumers report being more likely to recommend a brand that offers a simpler experience.
  • The researchers conclude that simplicity pays dividends for brands, indicated by the fact that a stock index comprised of the 10 brands ranked simplest in the study has increased by 138% since 2009, which is more than double the increase of Standard & Poors and other stock indexes.
  • In the US, UK and Germany combined, brands that increase their simplicity stand to gain nearly $49.9 billion.

About the Data: The Siegel+Gale data is based on interviews with more than 6,000 people across 7 countries.

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