Keep it simple, stupid: study reveals how simplicity boosts customer affinity and economic performance
New research from brand consultancy Siegel+Gale has analysed nearly 900 brands to create a ranking of those which succeed due to brand promise simplicity. While the survey found that consumers are more willing to pay a premium for goods and services from companies that boast a simple brand promise, achieving simplicity remains an uphill battle for many brands.
The research is based on a survey of 14,000 consumers across nine countries, with a total of 857 brands rated by respondents. A brand simplicity score was than calculated based on inputs including how they rated on the simplicity/complexity of products, services, interactions and communications in relation to its industry peers, how consistently the brand experience and communications were rated across respondents and how aligned non-user and user perceptions were.
Amongst the key findings of the study were:
- 61% of consumers stated that they were more likely to recommend a brand because it is ‘simple’.
- 64% of consumers are willing to pay more for simpler experiences (in the electronics sector 30-40% of consumers stated that they would be willing to pay more for simpler experiences, with 20-30% willing to spend more on simple products/services in the appliances, health insurance, restaurants, internet retail, fashion, grocery and banking sectors).
- Since 2009, a stock portfolio comprised of the publicly traded simplest brands in the global top ten has outperformed the major indexes (S&P, DAX, Dow and FTSE), boasting a portfolio growth of 433% and outpacing the indexes by 330%.
As to which are the most simple global brands, the top 20 is:
- Burger King
- Pizza Hut
So what makes these brands ‘simple’? Aldi has topped the list for four straight years, with competitor brand Lidl also in the top three. In terms of grocery retail brands then, the key seems to be a clearly communicated focus on affordable goods with the promise that quality or taste is not sacrificed. In addition, Aldi scored points because it mostly carries exclusive products, meaning that customers don’t have to choose between an array of brands and prices. On the tech side it is all about the simplicity of interfaces and the way that their core offering simplifies everyday activities for customers. For instance, YouTube’s navigation offering, the use of a ‘two click’ system and Amazon Dash buttons by Amazon and the alternative to channel surfing that Netflix’s service represents were key factors in their high ratings. Meanwhile, Google was praised for offering a user experience that is “intuitive and easy to understand”, with the use of Google Doodles (the daily logo illustrations) showcasing the brand’s personality. While such simplicity should be expected as Google’s search offering arguably has one key function to perform, Yahoo! dropped 37 places, the report noting that “search isn’t always simple”.
At the other end of the scale, the 10 brands identified as the most complex were as follows (with AXA identified as the most complex brand for the second year running):
That financial services and travel brands figure heavily in the most complex brands highlights the difficulty facing some brands as they seek to achieve simplicity. While the key offering/brand proposition – and regular touchpoint with customers to keep that proposition front of mind – of say, Google, Netflix, Aldi and McDonalds is simple to convey, for those organisations that offer a more complex array of products and choices, and have less regular interaction with customers, the challenge is far greater. Clearly not all brands can be truly ‘simple’.
Additionally, it is important to note that simplicity is just one factor that contributes to brand affinity amongst customers and solid economic performance. While a number of top ten ‘simple brands’ have been evidenced to outperform the major indexes, in addition to this simplicity there may well be other traits that these brands have in common that are a bigger contributor to revenues and profitability (and the report doesn’t make a similar analysis of the ten most complex brands to see if their complexity had a negative impact).
Ultimately, the premise that brands that make and deliver on a simple brand promise will be successful is wholly logical and you arguably don’t need a study to tell you that. However, the research does provide another dataset that serves as an endorsement of the work carried out by those tasked with building the legal foundations on which brands are built. The activities undertaken by counsel to secure protection for brands and slogans, clear advertising, monitoring social media brand use and ensuring that competitors and counterfeiters are prevented from damaging reputation are at the heart of creating, maintaining and communicating the brand promise. Therefore the study – alongside data showing that the most valuable brands similarly outperform a range of financial indices – serves to highlight the importance of an effective brand strategy and can be used by counsel to demonstrate the value they bring and support. Until detailed studies are undertaken to ascertain the correlation between the size of trademark and design portfolios and economic performance, such data is a useful tool to have in your toolbox.