Adam Morgan’s presentation at IAB Engage 2016 Winning in the age of the unreasonable consumer is well worth 15 minutes of your time. He does a great job of summarising how the consumer mindset has changed. Across categories ‘Uber’s Children’ have been educated that it’s no longer necessary to make trade-offs (e.g. convenience, performance, price) – you can have it all:
“We thought we wanted fine foods would go to fine food shop and paid fine food prices… and then someone comes along and gives us a sustainably farmed lobster for £5.99.
We thought if we wanted a fast a sexy car it would be a gas guzzler… and now you can have the greenest car in the world that when you press the ludicrous button it will do 0-60 in 2.5 seconds.
We thought that if we had to go into a fast food restaurant we shouldn’t really question the ethics of the food or how it got there too much… but now we can go into a fast food restaurant pay a reasonable price and still have a side order of sustainability.
We thought that if we wanted to look as fabulous as Jennifer Lawrence we probably had to have the salary of Jennifer Lawrence… but now actually we can look that fabulous then simply take it back (to the rental store) the following morning.
…All those old trade-offs that were the basis of strategy… they no long held. And the more that we educate the consumer to be unreasonable and to change their expectations the less they are going to hold them, and the more unreasonable we have to become ourselves.”Morgan argues that it is not brands but consumers that have become disruptive – the expectations of ‘Uber’s Children’ are the biggest challenge. The unreasonable challenger who progresses the category has an advantage, developing a niche which starts to deposition you – and so the cycle of competition progresses.
The way to succeed? To be even more unreasonable than they are. He cites the example of One Toyota in California who take just 6 minutes to complete the first service on new cars. This ‘signature moment’ then goes on to change expectations for all other car dealerships.
Morgan’s talk neatly articulates how expectations are shifting: it’s a compelling watch.
What we see in the field
Speaking to consumers on a regular basis I’m rarely confronted with the archetypal ‘unreasonable consumer.’ The trend is more revealed in aggregate. I tend to see:
- Dissatisfaction with the main providers in a category
- People learning there’s an easier way somewhere – and this is the reference point, no matter which category it’s in
- People giving a new competitor a go because it’s easy to sign up for a free trial
Financial services are a case in point. We’ve seen on recent projects how retail banks are facing competition from Fintech entrants who are disrupting sectors such as mobile payments, money transfers and forex. Revolut is a good example – making foreign exchange quicker, cheaper and more flexible.
It’s clear how a fleet of foot tech firm can make quick progress in the traditionally conservative world of retail banking. As McKinsey point out:
- They don’t have to worry about legacy technology;
- They are agile, often focusing on individual segments of the value chain;
- They are only partially subject to the regulatory constraints that apply to conventional banks;
- They can often substantially undercut the fees charged by incumbents.
It’s certain that the discipline of commercial pressure benefits us all. It’s how the market economy works.
When it comes to user experiences online or being easy to do business with, I’m all for it.
But as a strategy being even more unreasonable than the unreasonable consumer can’t get you all the way – especially offline.
Competitively you soon run out of room. Toyota One’s competitors aren’t realistically going to be looking at a 5, 4 or 3 minute service. Mapping the customer experience, exceeding expectations on the most important touchpoints, and setting expectations clearly for remainder seems more feasible.
There is room for confidence, brand leadership & distinctiveness too. Zigging when the world zags. There’s also kudos in integrity. The café where I’m writing this charges diners e3 for every change people make to their breakfast dishes as it puts the chefs off their stride. The customer isn’t always right.More broadly, there are many unintended consequences to giving ‘Uber’s Children’ exactly what they what. Historian Yuval Noah Harari:
“For the capitalist juggernaut, happiness is pleasure. Full stop. With each passing year, our tolerance for unpleasant sensations decreases, whereas our craving for pleasant sensations increases. Both scientific research and economic activity are geared to that end, producing each year better painkillers, new ice-cream flavours, more comfortable mattresses, and more addictive games for our smartphones, so that we will not suffer a single boring moment while waiting for the bus.”
Behavioural science tells us that we adapt to our circumstances. Today’s exceptional is tomorrow’s expected. If all our whims are miraculously catered to, we may never reach nirvana – just ever greater expectations. Harari again puts it far better than I could:
‘If we told our great-great-grandmother how we live, with vaccinations and painkillers and running water and stuffed refrigerators, she would likely have clasped her hands in astonishment and said: “You are living in paradise! You probably wake up every morning with a song in your heart, and pass your days walking on sunshine, full of gratitude and loving-kindness for all.” Well, we don’t. Compared to what most people in history dreamed about, we may be living in paradise. But for some reason, we don’t feel that we are.
…our happiness depends less on objective conditions and more on our own expectations. Expectations, however, tend to adapt to conditions. When things improve, expectations rise, and consequently even dramatic improvements in conditions might leave us as dissatisfied as before. In their pursuit of happiness, people are stuck on the proverbial “hedonic treadmill”, running faster and faster but getting nowhere.”