This week’s post addresses the second of five major benefits housewares manufacturers will enjoy when they adopt consumer insight-driven decision making.

 BENEFIT #2: By changing the way you make decisions, you’ll outperform your competitors.

Businessman“Customer insights are necessary for organizations seeking a competitive advantage. By understanding what customers and prospects are saying and identifying their needs and preferences, business leaders can make decisions that improve the customer experience.” Cynthia Clark, Senior Writer for 1 to 1 Magazine.

Many housewares manufacturers may understand their retail customers but most of them do not understand the people who buy and use their products. Nor do they make improving the “customer experience” a priority when making product development decisions.

Focus should be on the consumer not the competition

All too many housewares manufacturers seek to gain competitive advantage by bringing out products that have more features than the competitive products have. This is known as “KPD”-driven product development decision making, with the “KPD” standing for “Knobs per Dollar”. Companies that use “KPD”-driven decision making base new product development decisions on what their competitors are doing, not on what the end-users of their products need and want.

The problem with “KPD”-driven decision making is that it doesn’t lead to sustainable competitive advantage and profitable growth. If you analyze the most successful and profitable housewares products, you will find that they have one thing in common: They are significant improvements over the products that are currently on the market in the eyes of the consumer.

Your product may be “better” than the competitive product because it has more features but those features may not be important to the consumer. Consumers are not looking for more features. Consumers are looking for products that make their life easier in some way. Often, adding more and more features can actually make the product less appealing to consumers because those features make the product less intuitive and harder to use.

A product with more features isn’t always a better product

The Panasonic NN-SN681S Genius “Prestige” 1.2 cu. ft 1200-Watt Sensor Microwave with Inverter Technology & Blue Readout illustrates how new features can actually make the user experience worse.

Read the product description for the Panasonic NN-SN681S and you’ll find a number of technical sounding features including Inverter Technology, Sensor Cooking, Inverter Turbo Defrost, Inverter Melt-Soften Button, One-Touch Sensor Cook and Reheat, Pop-Out Dial, Keep Warm Feature, Blue LED Display, Clock/Timer and Child-Safety Lock.
Read the product reviews on Amazon and you’ll find out that many consumers don’t want all of these features. Here’s what Michael L. wrote about the feature-rich microwave oven: “This microwave has plenty of bells and whistles. Now that I have them I can attest that I really don’t need a bunch of bells and whistles. I really only want to reheat leftovers, cook frozen food, thaw stuff and heat canned goods. I want to do that fairly quickly. My needs are simple – more than 1000 watts, power level and timer settings. That’s about all I use.”

Michael L. concluded that “[The Panasonic microwave] works well cuz it is powerful but it is way too complicated. If you’re like me and don’t do a whole lot more than reheat leftovers, cook frozen foods, thaw stuff and heat up some canned goods then buy something with equal power and just a few basic controls. This one is overkill.”

In their zeal to add a bunch of cool new features that would really set this microwave apart from the competition, the product designers at Panasonic failed to take consumer habits and practices into consideration. The vast majority of microwave oven users are just like the reviewer; they use their microwave to melt things like butter, heat up water, and reheat leftovers.

One of the new bells and whistles that Panasonic added is the Pop-Out Dial which replaced the standard keypad found on most microwave ovens. Although Panasonic describes this dial as “easy-to-use” in the product description, people who have purchased the microwave would beg to differ.

jimmyfergus wrote this, “Arguably 2* is a bit harsh, but I do actively recommend against buying this. … My big gripe is the design – specifically what it’s like to control – i.e. the user interface. … The control knob seems like it should be great, but setting the duration is not an improved experience. You end up relatively slowly and carefully turning it to narrow in on your desired time. It’s not exactly difficult, but it certainly isn’t as easy as tapping a digit or 3 to set a time directly.”

Michael L. called the microwave “unintuitive”. In his review, he wrote about the first time his family used the microwave, “My wife was the first to use it. She first needed to read the manual before heating up some canned green beans. I tried it next. I first read the manual from cover to cover. I then thawed the hot dogs and had to have the manual in hand to do it. My oldest daughter – age 30 … too needed instruction before she could use it. My youngest daughter – age 23 … needed instruction just to heat a baby bottle up. … This [microwave] requires way too much effort.”

The risk of not understanding the consumer

Right now, this Panasonic unit ranks number one on Amazon’s Best Sellers list for countertop microwave ovens, most likely because it is sharply priced at under $150. But how long will it stay in the number one spot when prospective purchasers read reviews like Michael L.’s? Being so focused on adding more and more “knobs per dollar” without regard to the impact on the user experience has made Panasonic vulnerable to competitive encroachment.

And that encroachment may have already started. Whirlpool recently introduced the Maytag Stainless Steel Counter Top Microwave. At 1.6 cubic feet, the Maytag unit is larger than the Panasonic unit. But it isn’t just the consumer-preferred larger capacity that really sets the Maytag unit apart from the Panasonic unit. It is the feature package. Compared to the Panasonic unit, the new Maytag microwave oven is elegantly simple, with just three features — 1200 watts of cooking power, Sensor Cook, and Recessed Glass Turntable.

Whirlpool is clearly a company that believes, as Cynthia Clark does and as I do, that
“Customer insights are necessary for organizations seeking a competitive advantage.” By understanding what consumers want – and don’t want — in a microwave, Whirlpool was able to come up with a new breed of microwave oven that delivers an improved user experience instead of a bunch of technical sounding bells and whistles. It is too early to tell but I predict that the Maytag Stainless Steel Counter Top Microwave will be a marketplace success, even with a hefty price tag of $279.

What kind of decision making process does your company use?

Is your company more like Panasonic or Whirlpool? Do you pay more attention to what your competitors are doing or to what the end-users of your products need and want? If your focus is on your competitors, you are putting yourself at risk of being outperformed by companies that recognize the value and benefits of consumer-insight driven decision making.

To learn more about consumer-insight driven decision making, download the Data-driven Decision Making: The Key to New Product Success eBook.