The more bells and whistles your product has, the better, right? Not necessarily. A Berkshire Hathaway-owned company recently faced the consequences of an overly complicated product, in what turned out to be a worst-case scenario: legal action.
Applied Underwriters, a workers compensation insurance carrier and payroll company, had crafted a complex form of workers comp coverage it called a “profit-sharing” element.
Essentially, if a client company experienced few or no losses, it would reap savings. Conversely, if that same company saw heavy losses, its costs would soar, to a price ceiling.
The trouble was, all the ins and outs in the company’s policy were buried under dense legal jargon: Terms like “cession point,” “loss development” and “run-off term” befuddled clients, confusing them as to what they were getting into. The eventual result: multiple lawsuits against the company.
The lesson here is that while businesses may see feature-heavy products as comprehensive, in fact overly complex products only confuse customers. The core value of a product gets diluted in the flood of flashy extras. A straightforward product, on the other hand, allows businesses to better connect with customers, making it easier for them to sell the product (as well as upsell and cross-sell it).
Let simplicity reign.
Having too many frills and features doesn’t mean your product will face legal action (after all, Applied Underwriters was involved in shady behavior), but making your product complex certainly doesn’t do your customers any favors. Keep these three tips in mind to ensure your product is as streamlined as it should be:
1. Business, know thyself. In order to simplify (and improve) your products, first identify who you are as a company. A lot of this is getting back to basics. Ask yourself and your team the simple question: “What are we good at?” Your firm’s identity gives roots to each product offering and allows products to grow from a focused, recognizable origin.
For instance, my background is in sales, so when I started PK4 Media, I looked to make a single core platform that could encourage sales in multiple areas. Because clients could manage an entire omnichannel marketing strategy through one platform, they could focus on their strategy and goals — without worrying…