Offering simplicity in a complex domain is likely to be so appreciated and valued by customers that it ends up being perceived as a luxury. That may surprise some marketers who make the common mistake of thinking that in order to position a brand as a "luxury" alternative, you must provide customers with more features, perks, and options; luxury, in this context, is equated with "excess." But we've found that consumers of luxury goods have even less time and desire than most to wade through choices. One way to carve out a luxury niche is by simplifying - by making it easier for customers to use a product or service without having to waste time thinking about it or sorting through too many options. The key, however, is to make the right high-quality choices for these customers - and then make sure they understand that what you're providing is a simple solution that has considered their needs, made the right choices for them, and eliminated headaches and potential problems.
We learned this lesson early on in one of our first experiences working in the insurance industry. One doesn't often think of insurance as a glamorous, luxurious business. But the creation of a unique insurance policy called Masterpiece, which we helped design for Chubb Insurance, was a simplicity breakthrough within the industry. Chubb already held a prominent place in the commercial insurance market, but in the mid-1980s the company responded to requests from the owners and executives of the businesses it insured by offering personal coverage. These individuals typically were quite affluent and required a mix and match of coverage for valuable articles (such as jewelry and art collections), watercraft (yachts), homes (several), and cars (luxury models).
Masterpiece was also a fully customizable policy. The possible combinations of coverage were numerous, yet a library of modular text read seamlessly when printed as a continuous flow. The beauty of the policy stemmed from the fact that clarity and transparency are the bedrock of the Chubb brand. Chubb takes the approach of telling policyholders what is excluded, and if something is not specifically excluded, it is covered. By sending an appraiser to every home to set the replacement cost value before insuring it and giving the actual replacement cost if they estimate incorrectly, the effect is a "hassle-free" claims experience.The policy was not only simple for the customer to read, but it was also designed to be easier and faster for Chubb tounderwrite and approve. This meant that 95 percent of policies and 97 percent of endorsements could be out the door within seven days, in an industry that typically measures turnaround in weeks. That put more money in Chubb's pocket, because insurance companies that turn around policies faster can nab more customers; it's an early-bird-gets-the-worm business. And at the same time, Chubb could command a higher "luxury" premium on the policy, which people would pay because there was no guesswork about coverage and no hassles when a claim was filed.
Customizing content, as Chubb did with Masterpiece, is a form of simplicity because it involves winnowing information and increasing relevancy. By doing so, a company can save customers time and build their trust. Even the largest company can achieve the illusion that it is speaking to you and only you. Why don't more companies take this approach? Why don't they take the time and effort to customize and simplify their offerings?
One reason is that consumers historically have not been vocal about demanding simplicity, which has caused companies to be complacent about it. Companies haven't invested the time and effort in thinking about simplification, or in reforming entrenched practices that foster complexity. They have underserved their customers in this area, because it seemed they could get away with it.
But that's changing. Today, it's clear that most people- more than 80 percent-are looking for ways to simplify their lives. Some of this is undoubtedly a reaction to a world that's getting more fast-paced, hyperconnected, and overloaded with information, choices, and distractions.
The interesting thing is that this craving for simplicity spans demographic groups.
Reprinted by permission of the publisher. Copyright Random House. All rights reserved.
SIMPLE: CONQUERING THE CRISIS OF COMPLEXITY
AUTHOR: Alan Siegel and Irene Etzkorn
PUBLISHER: Random House
Price: Rs 499
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