While pausing in one of this nation’s fine railway stations last week, I found myself fancying a bottle of water. No problem. There was a newsagent, I had legal tender in my pocket and we were all set for a nice bit of free enterprise.
Being a legendarily tight Scotsman, I rumbled that whereas a bottle of water was Â£1.69 (and that is a whole other conversation), if you bought the Torygraph for Â£1 you got the water for free.
I detest the Torygraph so much that I was considering paying the extra. But there’s a recession on, don’t know if you noticed, so I took it. But, being a committed sandal-wearer and muesli-eater ‘as long as it’s deep-fried’ I didn’t take the paper and said to the assistant that she could keep it.
Here’s the bit that really stuck with me. She rolled her eyes a bit, and dropped the paper behind the desk. Onto a pile of about 40 others.
Clearly the idea of the promo is to influence wavering paper-readers (maybe those who can’t choose between the Telegraph, the Daily Mail and Mein Kampf). But there is clearly a sizeable minority who are just getting the product they want cheaper and ditching the lead offer.
(I smile to think of the marketing guys at Telegraph HQ seeing sales and returns up at the same time. Put that in your data model and smoke it.)
Anyway, what’s happened is that this offer has fallen foul of an economic law popularly known as Polson’s Third Precept of Reverse Utility. This states that when the thing you’re giving away for added value is more attractive than the main proposition, the main proposition ceases to have any value at all, particularly when it’s a right-wing rag.
And ‘here we go’ there’s an application for this in the platforms space. You knew it was coming, right?
Many providers spend quality time dancing on the head of a pin, trying to deliver ‘added-value’ services to influence selection and keep giving the sales guys something new to say. The main proposition takes a back seat to the new bell or whistle, and we go off on the merry-go-round of complication that has characterised product development in our industry for years.
So providers ‘especially the big guys’ flip the value model. In our example above, the new bit of functionality becomes the newspaper and the basic usability of the platform becomes the bottle of water. It should be the other way around.
The customer ‘the IFA in this instance’ goes for the cheapest route to find the basic experience he or she wants. The added value offer does nothing to move price sensitivity and little to influence product selection.
So what does it all mean? Providers, don’t be sad if usage of your clever new bit of stuff or your RDR toolkit or your new support material doesn’t move your sales figures. You’ve just been caught by the Third Precept. Sorry about that.
The good news is that if you go back to basics and concentrate on doing the simple things really well, every time, not only will you sell more, you’ll stop wasting money on misguided sales efforts and developments no-one cares about. And some kind of heaven will result.
Anyway, must dash, apparently Simon Heffer has some wise words on the condition of the working class!