RORY SUTHERLAND: Why buying a Quooker tap provides a valuable reminder of the continuing value of high cost channels

Rory Sutherland

Vice Chairman

O&M Group

Rory Sutherland is Vice Chairman at Ogilvy, as well as an author and marketing expert.

A few years ago my family decided to have our kitchen redone. I largely saw this exercise as an obligation to spend a lot of money on needless units and drawers, redeemed only by the addition of some interesting new gadgetry.

In the end I was happy with the outcome. We ended up with a dishwasher with an integral detergent dispenser, and a tumble-drier with an inbuilt heat-pump – which, according to my smart meter, saves us a fortune in electricity costs. One further small victory was the installation of a Quooker, a £800 wonder-tap which produces boiling water on demand.

(The Quooker tap, for those interested in such things, has an interesting heritage. Two Unilever scientists in the Netherlands were tasked with creating a powdered soup. Having successfully done so, one returned to the day job, but the other was still unsatisfied, effectively reasoning that no soup was truly “instant” if you had to wait for a kettle to boil first. He left Unilever to go it alone, in much the same way that Thomas Edison had earlier quit P&G, and started work on this related problem. And so the Quooker was born.)

Now in selling-in the Quooker, I faced a bit of a problem. One daughter was easily won over, since she had a friend whose parents had one already, but my wife was something of a hold-out, claiming not unreasonably that a £50 kettle would do much the same job (she once worked in procurement, and consequently adopts a drearily utilitarian approach to life-changing miracle products). My other daughter studies politics and philosophy, so muttered something about “capitalism collapsing under the weight of its own contradictions”, or something along those lines.

Yet, in the end, satisfying these disparate decision-makers – what in B2B marketing would be called “the buying committee” – was bizarrely straightforward. That’s because the nice people at Quooker offered to give us a 20-minute live demonstration from their showroom in Manchester. We didn’t even have to go to Manchester. Instead they have a kind of sophisticated six-camera Zoom set-up with nifty lighting, from which a really knowledgeable brace of salesfolk gave us all a full rundown of the different taps available as we sat around a screen in Kent – all the while answering my wife’s annoyingly practical questions about running costs and how much space it would take up under the sink.

After the 20 minutes were up, we were all sold. In fact we almost upgraded to the “Cube” option that produces filtered, chilled and sparkling water as an extra party-trick, though in the end we left that for later.

Now here’s the thing. A 20 minute live online demo is an expensive way of selling a tap. But it is not expensive if it is disproportionately effective, which this unquestionably was. In fact I doubt there was any other way in which they could have made the sale, short of a face-to-face meeting. Was there a parallel universe in which I would have ordered a Quooker online without some kind of human interaction first? I don’t think so. Offering customers a test-drive is an expensive way to sell a car, true, but often it is the only way to sell a car. Yes there are very rich people who will order three Quookers online sight unseen, but there aren’t very many of them.

Digital marketing has blinded us to something which I think we all knew instinctively 30 years ago, but which has now been dangerously forgotten. Generally the more expensive a medium or sales channel is, the more effective it is at changing behaviour. Roughly speaking, the most expensive channel is face-to-face, followed by the outbound telephone, then expensive direct mail, followed by ordinary mail followed by email, programmatic and so on. But with each fall in cost there is a corresponding fall in the level of conversion you can expect.

Why then are we often obsessing over driving customer interaction to low-cost channels, despite the fact that this may result in a large loss in sales? It is clearly an overweighting of efficiency at the expense of effectiveness. When I started in marketing, you defined who your potential target audience might be, and set out to sell to those people in the most cost effective way you could devise. Now, I notice, we are in danger of unconsciously predefining target audiences as “those people who will interact with us in an inexpensive way using digital channels”. I find it astonishing the extent to which supermarkets have imposed self-check-out tills on their customers without properly measuring and testing the effect that this may have on overall sales and customer retention. Or indeed shoplifting.

There is a simple thing that explains this. Cost savings are immediate and quantifiable. Opportunity costs – in this case the sales you lose through forcing everyone to interact with you in the channels that cost least – are uncertain and slower to emerge. Consequently there are, in any organisation, many more people who care about reducing costs than there are people who worry about lost opportunities. As LBS Professor Jules Goddard remarks, “A balance sheet has seven cost lines and one revenue line. And in any board meeting, the discussion tends to proceed in that same ratio.”

In my view, the newly widespread adoption of videoconferencing should have been seen as a gift to the financial services industry, and to B2B marketers in general. It is inordinately less expensive than face-to-face encounters, and yet can successfully solve those tough behavioural challenges which pixels and paper alone cannot – especially in cases (and this is common in financial services) which involve multiple decision-makers, high value decisions or both. It is interesting to see the extent to which independent financial advisors have adopted it. As one remarked to me “Our clients don’t really want us to intrude into their homes, but they aren’t going to put £500 into a monthly pension simply on the basis of a phone call. It’s the perfect middle-ground”.

I worry that we have become unwitting stooges of the tech industry where we have started to justify our existence more by reducing costs and destroying jobs than by increasing sales. Every single company is currently rushing to devise “an AI strategy”. Yet, Quooker aside, I don’t know a single business with a “Zoom strategy.” Why not?

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