How to add more value by doing less

I was listening to Rory Sutherland on Ted Talks and he mentioned Professor Ayelet Fishback and her work on the dilution model: How additional goals undermine the perceived instrumentation of a shared path.
Here is a link to the paper: The Dilution Model: How Additional Goals Undermine the Perceived Instrumentality of a Shared Path.

In summary, this model states that if a product or service performs multiple tasks, people have a perception that the ability to perform any one of the tasks well is diminished.  The paper states the example of a coffee shop that serves both coffee and sandwiches.   Sure people may have a need for both coffee and sandwiches and it would save people time if they could buy both at the same place.  The problem comes when you ask people about the quality of the coffee.  Research shows that since the café does not specialize in coffee, people will say the coffee is not as good as specialty coffee shops despite actual quality.

This same pattern is played out in many other multi function areas.  Mr. Sutherland gives the example of the TV with built in DVD player.  No matter what the technical specs say, people will think that the combination unit must have inferior quality to stand alone units and will thus buy the parts independently.  One explanation for this bias is that people may belive that compromises are made in the design that would impact quality.  Mr. Sutherland also uses the example of Google Search.  Instead of adding the weather and news, Google Search does one thing only and this increases people’s perception of the ability to do that.

Of course a discussion like this is not complete without dragging in the leaders of minimalism; Apple.  If you look at the early iPods you will notice that they all had limited functionality but did it very well. In fact, latter versions such as the shuffle actual removed features thereby possibly increasing the perceived quality of music play back.

It is important to note that context for a product should not be ignored.  Ludwig von Mises states that it is impossible to tell the difference between the value created by the food and the value created by sweeping the floor.  In the example of the coffee shop, eliminating sandwiches would increase the perceived quality of the coffee but the ambiance of the café must also be considered.


So how can the concept of goal dilution be applied to improving product value?  The first step is to try not to be all things to all people.  Minimize the product features to the core functionality that reflects the strength of your company.  Next understand the ecosystem within which your product operates and try to fit into that ecosystem as easily as possible.  If you make DVD players understand that you need to connect to a TV to work.  In order to simplify that process, why not accept the fact that not everyone has access to the back of their stereo system and put the connections on the side.  If you are a coffee shop, make sure you are located next to a complimentary product such as bagels.