September 30th, 2003

 

Educated consumers a challenge and opportunity

 

Gene Mage

 

 “An educated consumer is our best customer,” posited clothing mogul and retailing pioneer, Sy Syms.  Today many businesses curse Syms’ name as they do battle with well-informed consumers armed with readily accessible internet knowledge.  As the boundaries between well-informed, misinformed, and over-informed become more blurry, the once pliable consumer is becoming a complex force to be reckoned with.

 

Our sixth column in the series Nine trends that will rock your world looks at the double-edged sword called the information explosion.  On the plus side, the customer can now view user impressions of a product, data on health care provider quality, and detailed specifications without talking to a salesperson.  Used wisely, that information can dramatically speed up the decision process for otherwise complex purchases.  It is also much easier to price-shop for the best deal.  A knowledgeable consumer can grab real bargains through on-line auctions, if he does not get taken by a fraudulent seller.

 

An educated consumer raises stakes for suppliers and retailers.  If a salesman does not know the product inside and out, he will inevitably find himself in the embarrassing situation of getting a lecture on fuel injection from an internet savvy grandmother.  Patients are walking into doctors’ offices with their own ideas about prescription medications, herbal remedies, and alternative therapies before the exam even begins.  Doctors today must be ready to answer questions that were never contemplated in medical school.  That consumer pressure could, on balance, compel higher standards of professionalism among business people.

 

Ah, but there is a dark side.  The following pitfalls can drown us in an ocean of data.

  1. Misinformation.  While I enjoy on-line forums and chat rooms, I take the information that gets posted there with a grain of salt.  I think most people would not think of posting deliberately misleading information, but regardless of the motive, the forums are a real mixed bag.  You can find sources to support or debunk just about anything.  There are websites proclaiming the benefits of Emu oil and colloidal silver, while others explain, in great detail, why these offers are scams.  Who is right?  Who knows?  You still have to exercise your own good judgment.

  2. Wasted time.  You cannot pick up a newspaper today without someone regaling you about how technology miraculously increases productivity.  I would be the first to admit that technology, when thoughtfully applied, has the potential to greatly accelerate our ability to get things done.  But I would also admit that in many instances technology has become an enormous time-waster.  Can I send Bill Gates an invoice for the hours I have spend re-installing Windows and restoring crashed hard drives?  One recent study reported that employees waste about 3 hours a day dealing with internal emails.  Data gathering often degenerates into mindless web surfing.  You would never go to the library to look up something in the Thompson Register and then, while you are there, read the entire magazine rack!  But that is what happens every day.  I fear that few people have the discipline to go on-line just for “work” purposes unless they are being minded by a suspicious employer.

  3. Paralysis by analysis.  Some decisions simply do not require extensive research.  Pareto’s 80/20 rule applies to gathering product information; the first 20% of the data gets you 80% of the information.  I have watched with amusement how forum members spend days hand-wringing about which headlight to purchase, or the cheapest place to buy an exhaust pipe.  When decisions have major personal or financial consequences then by all means go for 90 to 95% certainty before taking the plunge.  But just because you can get the information about a particular purchase decision does not mean you should invest the time to gather it.  It might be cheaper to make a few errors now and then.  Do not allow your fear of being wrong to stop you from getting in motion.

Syndicated columnist Gene C. Mage is author of the book Managing for High Performance.  Visit www.makingitwork.com for the complete column archive.