Consumers will spend more on simple brand experiences
Brands with a simple proposition stand to prosper, according to new research, which reveals 62% of consumers will pay more for a simple experience.
Being classed as ‘simple’ isn’t always seen as a positive but when it comes to brand proposition, being simple is most definitely an advantage.
The majority of consumers (62%) are prepared to pay more for a simple experience, new research finds, while 61% would recommend a brand if it has a clear proposition that saves them time.
Offering a straightforward shopping experience that meets consumers’ weekly shopping needs – without confusing them with complex promotions – is central to Aldi‘s simplicity, according to UK and Ireland corporate buying and marketing director Adam Zavalis.
“We source the very best quality products, understand what size variants the customer wants and then offer the options they really need,” he says. “In this ever-evolving world with the time pressures we’re all under, we don’t believe that customers want to have to choose between multiple varieties of olive oil, for example.”
It is for this reason that Aldi has topped branding firm Siegel+Gale’s 2017 Global Brand Simplicity Index for the fourth year in a row.
Zavalis says the store format is also focused on simplicity, designed to enable customers to do their full weekly shop in less than 30 minutes. He believes the ability to save customers time, as well as money, makes Aldi an attractive brand.
“It’s this relentless pursuit of sourcing the very best and offering it at the lowest prices every day that means our customers can spend the time and money they have saved on their shopping trip by doing something more amazing in their lives with friends and family.”
We don’t believe that customers want to have to choose between multiple varieties.
Adam Zavalis, Aldi
This simplicity is carried through to Aldi’s marketing communications strategy, which Zavalis describes as simple, straightforward and lighthearted.
The 2017 Global Brand Simplicity Index was compiled during July 2016, and is based on the views of 14,000 consumers from the US, the UK, Germany, Sweden, China, India, Saudi Arabia, the UAE and Japan who were asked to rate 857 brands based on their familiarity and the simplicity of their communications.
Aldi’s closest rival Lidl comes in second, followed by Google, Netflix and Ikea. The highest climber in the global top 10 is Amazon, which rises nine places to claim sixth place, while KFC, YouTube , McDonald’s and Subway make up the rest of the top 10.
Siegel+Gale EMEA head of insights Ben Osborne believes Aldi characterises the core principles of brand simplicity – a clear purpose and a commitment to saving customers time.
“Typically, simplicity is the idea of clarity in terms of being concise. If you think about Aldi as a brand, the way it communicates is clear all the way from the logo,” he says.
“The other side of simplicity is a degree of empathy for the customer, so a customer-centric brand has to recognise the fact that life is short and we only have a limited number of hours in the day. Aldi has smaller ranges and that clear discounter commitment to value, so you don’t have to shop in the same way you would at Tesco or Asda. It’s a simple consumer proposition,” adds Osborne.
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The financial case for simplicity is clear. Since 2009, the portfolio of publicly traded simple brands in the Global Brand Simplicity Index top 10 has outperformed the major indexes by 433%.
Looking at the average premium consumers are willing to pay for brands within a given industry, Siegel+Gale estimates that failure to simplify is costing brands $86bn (£68.5bn).
This spells bad news for the brands bringing up the rear in this year’s global index, which comprises 95 brands in total. The lowest placed company is Axa Insurance, followed by Aviva (94), Bupa (93) and LinkedIn (92).
Looking at the UK index, which this year includes 126 brands, it is Axa PPP Healthcare that takes last position, with Npower at 125, BT at 124 and TalkTalk at 123.
Osborne suggests brands in the professional services and insurance space naturally have a degree of friction, owing to the nature of the categories and the way they relate to you.
“[It’s easy to assume] they don’t value the customer’s time or empathise with them because of the degree of research people have to do before they enter the category or the fact that you constantly have to navigate friction points.
“What we see with a lot of brands that invest in expanding their proposition is that giving us more ways to consume things just creates more complexity.”
Big brands like Apple (44), Instagram (55), Twitter (67) and Facebook (82) also score poorly when it comes to simplicity. Osborne believes in Apple’s case Steve Jobs’ mission has slowly been diluted and as a result there has been a loss of consumer understanding.
“When the iPhone first came out, there were lots of new ways of removing friction, but since then all its done is locked in the initial customer base and bug fix, which has added to the complexity,” he explains.
“If you think about Facebook, it is community-led but is trying to do so many different things at once to own all the different dimensions, while platforms like WhatsApp and Snapchat are such clear propositions.”
UK rewards transparency
In the UK, 10% of consumers are willing to pay more for simpler experiences in the fitness and health insurance sector, 10% to 20% more for hotels, booking, electronics and fashion retail experiences, and upwards of 22% more for simplicity in air travel.
This compares to the global index where consumers are willing to pay 30% to 40% more for a simple experience in the electronics sector, 20% to 30% more for simplicity in the travel, telecoms and restaurant sectors, and 10% to 20% more in automotive, utilities and general insurance.
Whereas 45% of UK consumers would pay more for a simple brand experience, this is far lower than consumers in India, 92% of which are willing to pay more, while in China it’s 85% and 84% in the Middle East.
Compared to the global ranking, the UK Brand Simplicity Index shows a different picture. Amazon tops the list in the UK, followed by Google, Lidl, First Direct and John Lewis, with Aldi in sixth. Fast food and fast travel dominate the rest of the UK top 10 with McDonald’s in seventh, followed by Nando’s, Booking.com and Premier Inn.
The consistency of Premier Inn’s proposition is key to its success, says head of brand marketing Beatrice Vears. “We offer great value for money, comfort without compromise and our hotels are in more locations than any other UK hotel chain.
“We have recently brought all these key USPs to life through a new above-the-line campaign, which positions Premier Inn as ‘A great place to start’. The simplicity of this campaign has already shown some fantastic results and the messaging allows us to engage with our core audience by telling honest, personable stories that are completely relatable.”
The company defines brand simplicity as being transparent, from the online booking flow to the room rates and having highly engaged employees. The company takes an integrated multi-channel approach to all its campaign activity, Vears explains, which at its heart is customer centric.
“Without our guests we wouldn’t be where we are, so we know that delivering excellent customer service, introducing customer-centric processes such as check-in kiosks and free Wi-Fi, and continually reviewing customer feedback are all extremely important.”
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Cultivating brand champions
According to Siegel + Gale’s research, 62% of companies which are perceived to be simple have employees who describe themselves as brand champions, compared to 20% of companies perceived to be complex.
Employee engagement is a huge part of the culture at insurer First Direct, which empowers its staff to suggest changes they think will benefit their customers. Head of brand and marketing Zoe Burns-Shore explains that empowering employees all ties into First Direct’s ‘people matter more’ mantra.
“Every decision-making forum, agile sprint, product committee and working group has the customer at its heart. What’s important here is that this isn’t siloed off into a customer experience team who work separately to the business, this is everyone’s role,” she explains.
“We have a physical hub at the heart of the business where anyone can go to learn more about who our customers are, what they like and how they want to manage their finances. We also have a customer collaboration area called ‘fdesign’, where we invite customers to design and test propositions with us.”
The First Direct team has spent the past 12 months stripping back and refining its proposition, introducing features like text alerts to inform customers they have hit their overdraft limit. The company has also made six updates to its mobile app to improve the customer experience, such as adding touch ID, transaction search and the ability to set up direct debits.
First Direct’s focus on customer experience involves removing as many steps as possible, allowing customers to choose what channel they want to bank in and being jargon-free, says Burns-Shore.
“It’s really important to us that our marketing strategy is as much about customer engagement as it is about letting customers know about what products might be right for them,” she adds.
Disruptors with integrity impress
By their very nature global disruptors seek to remove friction, empower consumers and save time, meaning they are attracting serious interest in the Global Brand Simplicity Index.
Dollar Shave Club leads the US top 10, shooting to prominence after its $1bn (£800m) acquisition by Unilever last July. The top 10 also includes big hitters such as Spotify (4), Airbnb (6) and Uber (7), as well as featuring lesser known brands like takeaway ordering platform GrubHub (2) and Jet.com, the ecommerce retailer bought by Walmart for $3.3bn (£2.63bn) in August.
It’s great to be competing with [tech disruptors], but it’s also great to have risen out of our sector to compete with the best.
Adam Rostom, Ovo Energy
In the UK, Ovo Energy is the disruptor with the simplest proposition, followed by Citymapper (2), Shazam (3), GoPro (4) and MyFitnessPal (5). The energy provider beat established disruptive brands like Uber (10), WhatsApp (12) and Airbnb (13) to reach the top spot.
“There is some great competition, but it is also great when you consider that consumers put trust in energy companies below that of banks, meaning our industry as a whole is not trusted or known for transparency,” acknowledges Ovo Energy CMO, Adam Rostom.
“So yes it’s great to be competing with those guys, but it’s also great to have risen out of our sector to compete with the best.”
Ovo Energy is the brainchild of a group friends who wanted to make the process of paying for energy easier. Seven years on it has stayed true to its roots: the focus is on fair pricing, great service, clear information and using technology to make managing energy easier.
“If you think about it, 66% of people haven’t switched their energy supplier, that means that two-thirds of people are either apathetic or intimidated by the process. That goes to show there’s a need for communicating in a clear, simple, open and honest way, making dealing with an energy company as simple and streamlined as possible,” says Rostom, who believes simplicity comes from within.
“I have long believed that marketing is every single touchpoint that consumers have with a brand and it is crucial to make sure every person in the company understands what the company is about and lives that.”
Rostom argues Ovo Energy benefits from the strength of its principles, which it backs up by over-delivering on its commitment to green electricity and by charging a single rate instead of trying to bait consumers with teaser rates. And while the company has been active with its latest TV campaign, the CMO believes Ovo Energy’s success comes from word-of-mouth.
“That is what we really want,” he adds. “When we hear Ovo customers recommending us to their friends, that really is the strongest accolade we could possibly get.”
Hilton incentivises direct customer engagement
After focusing on simplifying the consumer message in 2016, hotel brand Hilton has risen 50 places in the Global Brand Simplicity Index to rank 12.
‘Stop Clicking Around’, the hotel chain’s largest global marketing campaign to date, aimed to cut out the friction in the booking experience, helping visitors find the best rates by booking direct rather than through a third party.
“We looked back at 2015 and learned that 57 billion Hilton Honors points – equivalent to more than 1.6 million free nights – went unearned because guests booked their stay through a third party,” explains Hilton CMO Geraldine Calpin.
“We understand that time is precious, so we encouraged our guests to stop clicking through countless websites, wasting hours of time and book direct for the best price and added benefits. It was a simple message that we repeated across all channels, from TV to mobile. Consistency is key.”
The message worked. Calpin directly attributes 4.5 million bookings worldwide to the success of Stop Clicking Around, with 58% of customers questioned saying the campaign made them more likely to book direct for their next stay.
The Hilton Honors programme also grew by nine million members to reach 60 million, accounting for 55% of Hilton’s total room occupancy.
The team worked on driving traffic through the Hilton Honors app, creating an airline style experience that allows guests to book, check-in the day before their arrival and choose their room location. Customers can also request amenities to be in their room upon arrival, call an Uber from the airport to the hotel and use their smartphone as their room key, all through the app. As a result of these improvements, the app is now downloaded on average once every eight seconds.
“We obsess over making it all through an entirely simple app,” says Calpin. “We provide a consistent and simple customer experience that our guests can rely on. The moment that we have their attention, we provide them with value, which increases brand loyalty and keeps them coming back.”