U$ 402bn is on the table for brands that simplify their CX and EX – here’s why
Think about it for a moment. Brands that make their experiences too complicated are missing out on $402 billion in untapped opportunities. This is the message from research at the turn of last year by Siegel+Gale. That’s a bit less than the GDP of Austria.
Our lives have become complicated. We have all lived through the crises of the past 15 years: the financial crash in 2008, Covid, spiralling inflation and rising costs. Stress levels are rising. Beleaguered consumers are craving simplicity. They are seeking out brands that make their lives easier. And it pays for brands that are responding (now, more than ever since the pandemic).
Image source Siegel+Gale
As you can see in the chart above, the world’s simplest brands outperform competitors in all indexes.
Simplicity = happier customers and employees
Simplicity is an essential aspect of customer and employee experience that can greatly impact a company’s success and its ability to innovate.
When an organisation’s offerings are simple and easy to adopt or use, people are prepared to pay a
premium for the simpler experiences. Siegel+Gale put the figure at 57%.
Making customers’ lives easier can lead to greater loyalty, enhanced customer satisfaction, and ultimately, improved business results.
Image source Siegel+Gale
The simplicity premium by industry:
In this article, I will explore the psychological effects of simplicity on customers and employees, as well as the importance of simplicity in B2B companies. We in CX have known for years about the ‘simplicity’ premium. We’ve been working on it and writing about it for the past 8 years.
Mind models, and your perception
But, before I go any further let’s understand more about mind models, which are simplified representations of how the human brain processes information, perceives and adopts or digests the world around us. Each of us perceives, learns, or understands things differently. That is the beauty and the challenge of simplification and simplicity. Mind models are created to help us understand complex mental processes such as perception, memory, attention, and decision-making. What is simple for me may not make any sense for you and vice versa.
Mind models can take many forms, including diagrams, mathematical equations, design, computer models, and other types of visual or conceptual representations. They are used by researchers in cognitive psychology, neuroscience, artificial intelligence, and related fields to better understand how the brain works. They are also used to develop new theories and technologies related to cognition and perception. In our case, this modelling can be applied to enhance experiences and design to generate business growth.
The psychological effects of simplicity & Simplification
Complexity: Insatisfaction, Churn, No Loyalty and No Adoption
Simplicity and Simplification: Happiness, Adoption, Loyalty, and Satisfaction, better CX and EX and Innovative Ideas
The customer views
Customers are often faced with complex decision making processes, which can lead to cognitive overload and decision fatigue. By providing a simple and easy-to-understand solution, companies can reduce the cognitive load and mental effort required of customers. Each of us has different strengths and weaknesses related to perception, ability to learn and mind models.
Moreover, a simple customer experience can also lead to a feeling of accomplishment and satisfaction in the customer. There is an emotional response. When customers can complete a task or achieve a goal without any unnecessary complications, it can boost their confidence and motivate them to continue using the company’s products or services. This positive emotional state can lead to increased loyalty and advocacy, resulting in long-term adoption and business success.
The partner and employee view
Simplicity is equally important to the partner and employee experience as it can impact productivity and satisfaction. Employees who are faced with complex and convoluted processes, rigid hierarchies and procedures can become frustrated and demotivated. This can lead to decreased productivity, a lack of valuable ideas or ability to create new things. The result? A poor employee experience and motivation and high levels of turnover. By providing a simple lean and streamlined work environment, companies can help employees focus on their core tasks and achieve greater job satisfaction. This creates a culture of ideas, productivity, innovation, and collaboration. Independent of whether the company is Agile, and adopted or not design thinking or other methodology, tools or techniques.
Furthermore, simplicity can also lead to a sense of empowerment and control for employees. When employees are provided with clear and straightforward processes, tools, and freedom, they feel more in control of their work and can take ownership of their tasks. This can lead to increased motivation and a greater sense of accomplishment in their work, ultimately leading to improved business results.
Who do you know is delivering with simplicity and simplification? Why they are growing faster than competitors?
Simplicity is important for customer, partners, and employee experience. It is a key differentiator and tool to create value and stand out in competitive markets. Companies that prioritise simplicity can create a more memorable and impactful brand experience, leading to increased customer experience results more loyalty and brand recognition = sustainable growth.
Here are 14 examples of companies in both B2B and B2C that have implemented simplicity in their organisation and offerings:
- Siemens – German-based multinational Siemens has implemented a simplification program to streamline its business processes and reduce complexity. They reduced the number of management levels and streamlined their product portfolio to improve efficiency and customer experience.
- Philips – Dutch multinational Philips simplified its product portfolio to focus on health technology and home appliances. They also implemented a customer-centric strategy to provide more personalised and simplified services to their customers.
- Nestle – Swiss food and beverage giant Nestle has simplified its product portfolio to focus on core brands and divested non-core businesses. They also implemented a simplified organisational structure to improve efficiency and decision making.
- IKEA – Swedish multinational furniture retailer IKEA has implemented a strategy to simplify its product designs and reduce the number of components used in manufacturing. This has reduced production costs and improved efficiency in their supply chain.
- Alibaba Group – Chinese e-commerce giant Alibaba has implemented a ‘Three-One-Three’ strategy to simplify its business operations. This involves three business units, one platform, and three companies. By simplifying its organisational structure, Alibaba has been able to reduce costs and improve efficiency.
- SAS Analytics – Leading provider of analytics software SAS helps organisations make data-driven decisions. One way in which they have succeeded in simplifying their products is through their focus on design and internal processes.. By prioritising ease-of-use and intuitive interfaces, SAS has been able to create products that are more accessible to a wider range of users, regardless of their level of technical expertise. This has resulted in improved adoption rates and increased customer satisfaction.
- Panasonic – Japanese electronics company Panasonic has implemented a simplification program to reduce the number of business units and product lines. This has led to improved efficiency and cost savings.
- SAP – Germany-based multinational software firm SAP implemented a simplification program to reduce complexity in its software products and improve user experience envisioning adoption. They also simplified their internal processes to improve efficiency and collaboration between employees. SAP still have a long way to go but is continually improving, depending the division and who you ask. Ariba SAP for instance did a great job simplifying their complexities.
- Samsung – The South Korean electronics division of Samsung has implemented a simplification program to streamline its product portfolio and reduce the number of smartphone models it produces. This has led to cost savings and improved design, focus and customer experience.
- Tencent – Chinese multinational conglomerate Tencent has implemented a simplification program to reduce complexity in its business operations. This involves simplifying its product portfolio and streamlining its organisational structure.
- Toyota – Japanese automotive company Toyota has implemented a simplification program to reduce the number of car models it produces and focus on core brands. This has led to improved efficiency and cost savings.
- Apple – Apple is a great example of a company that prioritises simplicity and simplification in its products and user experience. Apple’s products are designed to be intuitive and easy to use, with a focus on minimalist design and functionality. This simplicity has contributed to Apple’s success, as it has helped the company establish a strong brand identity and loyal customer base.
- Aldi – the discount supermarket chain has successfully simplified the shopping experience and generated significant revenue growth year after year. Their success can be attributed to their emphasis on simplicity and the uniqueness of their offer. Aldi offers a limited range of products, focusing on the most essential items and private label products. This helps to keep costs low and ensures a streamlined shopping experience for customers.
- Amazon – tech giant Amazon is another company that has prioritised simplicity in its offerings and is setting the standards. The company’s website and mobile app are designed to be easy to navigate and use, with clear calls to action and simple checkout processes. The rest, they say, is history. This simplicity has helped Amazon become a leader in e-commerce and has contributed to its growth and success.
I assume you’re not surprised by any of the brands above (all of which have a large consumer base). There is a warning sign here for companies with a business base.
Why B2B needs to catch up on simplicity and Simplification
The workplace has also become complicated. I think it’s very useful for B2B organisations to review their design approach. It’s one thing to say ‘our organisation’ is customer centric. And it is another to actually design experiences from the customer back and offer customers the simplicity they seek. I am not saying intuitive, since intuitive design is what we all aim for. But many firms, especially in B2B enterprise services and technology, struggle to design around their customers and simplify experiences. Businesses that go the extra mile and work out how to simplify experiences will be rewarded with customer-led growth.
As I just mentioned, brands perceived as simplified and simple around the globe tend to be B2C. In the Siegel+Gale simplicity index B2B brands are scarce. Can we change it?
Image source Siegel+Gale
Or in other regions:
Image source Siegel+Gale
The B2B loyalty challenge
While simplicity is often associated with B2C, it is equally important in B2B. In fact, B2B customers often have more complex needs and requirements than consumers, making simplicity even more critical. By providing simple and easy-to-understand solutions, B2B companies can reduce the cognitive load on their customers, leading to greater satisfaction and loyalty. Making it easier to use our products and services makes business customers’ lives easier. All the while accelerating engagement and delivery and reducing effort and time and increasing the ability to generate revenue, satisfaction and sustainable growth.
As discussed earlier, this can lead to improved business results, driven by increased satisfaction, and higher levels of loyalty and retention – both customer and employee.
Simplicity in action – lessons from Samsung
Here are 11 tips on how to simplify experiences from our work with Samsung.
- C-suite decision-making – the C-suite needs to make a commitment to simplification, and involve all relevant stakeholders to create the strategy and plan to execute it. It can start with process and design to enhance your customer, partner and employee experience as stated on this previous article (Why Your Customer and Design Chiefs (CCO-CDO) Need to Collaborate to Make a Success of Your CX). Then start the line of actions needed to create change, communicate it throughout the organisation, and equip everyone with the right tools, training, and skills they need to deliver the change.
- Create a cross-functional team – form a team of employees from different departments to work together to simplify the organisation’s processes, procedures, and products.
- Conduct a review – conduct a comprehensive review of all processes, procedures, and products to identify areas of complexity.
- Identify key pain points – identify the key pain points for customers and employees and prioritise them for simplification.
- Simplify language – use simple language in all customer-facing materials to make it easy for them to understand what the company offers and how it benefits them.
- Streamline procedures – streamline procedures and eliminate unnecessary steps to simplify the process for employees and customers.
- Invest in technology – invest in technology to automate repetitive tasks, reduce the risk of errors, and improve efficiency. But, do not just invest in technology for technology’s sake.
- Simplify product offerings – simplify product offerings to make it easier for customers to understand and choose what they need.
- Simplify the digital interface design – the design team should focus on creating a simple, intuitive, and easy-to-use tech product. This includes removing unnecessary features, reducing clutter, and using clear language and visual cues to guide users through the product. The goal should be to create a seamless experience that requires minimal user effort to complete their desired task to ensure uptake and usage is high. Additionally, the design team should conduct usability tests and gather feedback from users to continuously improve and ensure it remains simple and easy to use.
- Training and educating – provide training and education to employees to ensure they understand the new processes and procedures and are equipped to provide a simplified customer experience. And sustain the change.
- Continuous improvement – continuously monitor and evaluate the organisation’s processes, procedures, and products to identify new areas for simplification and improvement.
By following these actions, companies can make your employee and customer experiences, products, procedures, and processes simpler and more efficient.
To recap …
In our complex, demanding world, simplicity is an essential aspect of customer and employee experience that can significantly impact a company’s success. Organisations that prioritise it can create a more adoptable and impactful brand experience that customers seek, leading to increased customer loyalty and brand recognition. By simplifying their offerings, messaging, and customer interactions, companies can improve their business results and drive growth. Siegel+Gale found businesses that prioritise simplicity often surpass their rivals in revenue growth. For instance, companies with elevated simplicity ratings witnessed an average revenue growth of 4.5%, while their counterparts with lower ratings had only 0.5% growth. Furthermore, companies with superior simplicity ratings had a greater net promoter score and demonstrated higher levels of customer loyalty and satisfaction.
- How does your business rank for simplicity?
- When was the last time your organisation ran a CX assessment to understand what your customers go through?
- What do your customers and people say about their experiences?
That’s a lot to think about for now.
The European Customer Experience Organization (ECXO) understands the complexities of bringing teams together and is here to help. ECXO is a fast-growing and evolving professional business network, created to bridge the gaps between the different cultures across Europe, the Middle East and Africa to create a new set of standards. We aim to educate practitioners and companies while generating a unified customer experience model with a European regional focus. Find out more here.
Sources of images an part of the data source:
- HBR: The Elements of Value
- Forbes: The Importance of Simplicity in Business
- Siegel & Gale: Simple: Conquering the Crisis of Complexity
- Nikkei Asia – https://asia.nikkei.com/Business/Business-Trends/Companies-turn-to-simplification-to-survive-in-post-COVID-era
- Individual company websites or press releases: Siemens, Philips, Nestle, IKEA, Alibaba Group, SAS Analytics, Panasonic, SAP, Samsung, Tencent, Toyota, Apple, Aldi, Amazon.
- eGlobalis data source and CX Programs with Samsung.
- eGlobalis, Why Your Customer and Design Chiefs (CCO-CDO) Need to Collaborate to Make a Success of Your CX https://www.eglobalis.com/why-your-customer-and-design-chiefs-cco-cdo-need-to-collaborate-to-make-a-success-of-your-cx/