When it comes to designing products and services, companies would do well to keep in mind the old saying “time is money.”
History suggests that by helping consumers save time or more fully enjoy the time they spend doing something, companies could gain a competitive advantage that could lead to higher sales and profits. Consider the success of innovations such as fast-food restaurants, automated-teller machines and countless labor-saving appliances.
Not only are consumers continually searching for new offerings that might allow them to do more in less time, but growing pressures brought on by the current recession have made them less tolerant of organizations that waste their time—say, by keeping them on hold too long or providing poor service.
Time and Money
- The Situation:There’s an opportunity to be had in helping consumers spend less time on the activities they don’t value and more time on those they do.
- The Problem: Many organizations have failed to spot it. Consumers point to poorly designed products and less-than-stellar service as indications that all too often companies don’t respect their customers’ time.
- The Solution: By designing products and services that help consumers either save time or enjoy time more, companies can gain a competitive advantage that may help boost their sales and profits.
We found, however, that many organizations seem to be missing out on this opportunity. A recent survey of more than 1,200 consumers in North America revealed that a mere 5% believe that any company they do business with always respects their time.
Part of the problem is that consumers are more time-pressed than ever, so innovations that may have cut it in the past—say, 24-hour photo processing—no longer satisfy them. And while many companies are sensitive about their customers’ time to some degree, few consider the whole picture—that is, the entire time it takes to use their product or service, from the shopping experience through disposal.
In studying the relationship between time and consumer purchases, we observed three ways in which firms can turn time into a source of competitive advantage. They can help consumers do things faster by, for example, making a product easier to buy, use or throw away. They can make the time involved in using a product or service more pleasurable. Or they can design offerings that empower people to choose the mix of time and value that is right for them.
Here
Get Premium Already a Premium Subscriber? Sign In
Purchase
Buy this article
Purchase one or more copies as a PDF
Copyright © Massachusetts Institute of Technology, 1977-2011. All rights reserved.
Customers now value speed and convenience above almost all else. They’ll pay more for it, too, even in our current economy. Thankfully, that gives merchants another avenue to compete in, rather than being reduced to competing only on price.