Back to basics

17 Feb 2009|Lee Shupp

Consumer spending has accounted for about two thirds of the economy until recently. During the dot com crash, and after 9/11, consumers were encouraged to spend money to help get the economy back on track. We now know, however, that the levels of consumer spending that we’ve come to expect are unsustainable, as consumers have been spending much more than they make. Hence it looks very unlikely that consumer spending will go back to previous levels. What does a world look like where consumer spending remains reluctant?

It’s back to basics. Here are a few worth considering:

Watch replacement cycles get longer, and stay there. The average replacement time for both desktop PCs and laptops has been gradually getting longer, and it will continue to do so. Computer are now a mature technology, with stable operating systems and solid hardware (the occasional crash excepted). New operating systems offer evolution rather than revolution, and design has finally gone mainstream in hardware, although some companies are arguably much better at it than others. There is no compelling reason to replace your computer every 2 years; consumers now expect computers and operating systems to last longer. The software upgrade cycle is slowing down as well, as many software upgrades now offer more complexity than functionality. Quicken used to be one of my favorite software packages, until upgrades added a jumble of complexity that made it much harder to manage my finances. Now I spend more time frustrated than delighted with the product.

Be prepared to show value, and solve burning consumer pain, instead of just offering something new and cool. The “exceptional willingness” that Columbia business professor Amar Bhide has ascribed to American consumers who are willing to try new things before their utility is clear is fast vanishing. While many Americans do like to play with new technology, the willingness to pay for beta versions of half baked products is gone. Products have to show clear and compelling value now, and directly address customer pain. Microsoft’s Vista suffered from this problem; while it offered some OS improvements, especially with desktop search, there was no clear and compelling reason to upgrade, and lots of reasons to think twice.

Simplicity and ease of use are always desirable traits in products and services, but they are even more important now, as increasing consumer stress shortens patience for figuring out new products. In a shrinking economy where people are worried about their jobs, and hustling to make ends meet, there is little interest in anything with a learning curve. Say goodbye to manuals, and let design lead the way in guiding customers through learning new products and services. The Flip video recorder is a great example of a simple, easy to use, low cost product.

Expect strong resistance to buggy products. Consumers have been very forgiving of technology products that are not very good over the past few years, as ready cash and consumer optimism allowed people to forgive buggy products. Those days are rapidly drawing to a close, as money gets tight and consumers have become frustrated with technology not working right. Many companies have emphasized speed to market over product quality, and this has come back to bite them. Vista made a poor first impression in this regard, with compatibility problems that, while eventually overcome, created resistance to adoption. Software is no longer new and cool, the internet is no longer new and cool; can everything just work please?

Customer care becomes more important. With people stressed out by the economy and worried about their jobs, they will be less willing to accept a product handoff with no subsequent support. Beyond troubleshooting problems, people will want to know how to get the most out of the products that they have purchased. Apple is doing an extraordinary job of this, offering the Genius Bar and free classes in their retail stores to help customers better understand and use products. This moves the bar from “customer support” reacting to problems, to “customer care” proactively showing customers how to get the most out of their products. Interestingly, it now appears that Microsoft will follow suit, opening retail stores to promote their products.

None of these precepts are revolutionary; if anything it’s back to basics. These design principles hold true in both good and bad times, and can help deliver great products and services that become “must haves” rather than “nice to haves.”

prev next