Let us be perfectly clear

75% of consumers believe “complexity” contributed to the current economic downturn, according to a recent study by Siegel+Gale. The research sampled 1,214 consumers in late December and early January.

Other portions of the report (as quoted by MediaPost) seem to suggest that a majority of these consumers see themselves as partially culpable for letting financial missteps happen: 52% of respondents admitted that they only "sometimes" or "never" read investment materials or insurance policies that they sign, with 50% acknowledging that "it's the final responsibility of the customer to make sure they understand all the risks."

Compared to a year earlier, 37% of consumers said they were less likely to trust their mortgage lender, 36% their broker or financial advisor, and 35% their bank.

Implications: Regardless of the business you’re in, there are beneficial lessons in this research. From credit card terms to mortgage documents, many consumers see life as a set of complex details often printed in a microscopic font. The sheer length and complexity of many contracts effectively defends them from the risk of ever being read. Many time-sensitive consumers began “skimming the details”… or ceased reading the documents entirely. Now, many of those consumers are paying the price.

Going forward, expect people to actually read the fine print involved with your offer… or choose an alternative so simple that no fine print is required. (84% of these survey respondents said they are more likely to trust a company that uses jargon-free communication.)

If you’re a packaged goods company, how does that impact your packaging or coupon redemption? If you’re a manufacturer, how does that impact your warranty? If you’re a retailer, how does it impact your return policy? Many consumers have re-learned: The devil is in the details.

Now… while some of you might read this as a threat, others will see it as an opportunity; I prefer the latter. The Siegel+Gale report also indicated that plain-English explanations and disclosures would give these consumers a 79% increased interest in investing in a financial product, a 73% increased interest in selecting a broker or a financial advisor, and a 63% increased interest in applying for a credit card.

Could your company use some increased consumer interest? Is there some way you could reduce the complexity cost of buying the product or service you sell?

Mike Anderson