by Roland T. Rust, Debora Viana Thompson, and Rebecca W. Hamilton

Editor's Note: As anyone who has bought a cell phone over the last couple of years can tell you, manufacturers love to cram as many capabilities into a product as possible—cell phones are now also cameras, music players, and game platforms. Why the rush toward "feature bloat"? Because consumers perceive value in this Swiss-Army-Knife approach and will pay for the added utility. The problem comes when the buyer actually starts to use the product. The increased complexity makes for a very unhappy consumer, who will look to return the product or look for another vendor in the future.

This scenario was supported in a recent study of consumers funded by the Marketing Science Institute. So what is a project manager to do when faced with this paradox? The full results of the survey and implications for companies were detailed in a recent Harvard Business Review article, part of which is excerpted here.

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If you are a manager in a consumer products company, our research presents you with a dilemma. Adding features improves the initial attractiveness of a product but ultimately decreases customers' satisfaction with it. So, what should you do? If you give people what they want, they will suffer for it later, and that has three follow-on effects.

First, many of them will return the product. Recently the Consumer Electronics Association, a U.S. trade association, commissioned a survey on consumers' experiences in a complicated new product realm: home networking. The survey found that 9 percent of consumers had returned a home networking product (for example, a hub, router, bridge, adapter, or modem) within the previous year. Only 15 percent of the returns were the result of broken or defective products; most of the remaining returns were simply because people couldn't get the equipment to work.

Second, consumers who are dissatisfied with a product after using it will take their business elsewhere in the future. Certainly, it's true that you can't satisfy a customer you've never won in the first place. Many companies may believe 'tis better to have sold and lost than never to have sold at all. But that's a dangerous attitude for any company focused on growing customer equity—the lifetime value of their customers. A company looking for repeat business should hesitate to pit its features against its future.

Finally, frustrated product owners . . . will spread the word of their dissatisfaction. This appears to be the case with BMW, whose 7 Series cars feature the complicated iDrive system, which offers about 700 capabilities requiring multifunction displays and multistep operations—even for functions that formerly required the twist of a knob or the flick of a switch. BMW included instruction sheets in the glove compartment because it is almost impossible to give the car to a valet parker without an impromptu lecture. According to industry news reports, sales of the 7 Series in the United States in the first half of 2005 were down about 10 percent relative to the same period in 2004. Past studies have established the power of positive word of mouth and the much greater prevalence of its negative form—and most of those studies were conducted before the Internet gave every dissatisfied party a global sphere of influence.

In light of these long-term consequences, how should companies today be designing products? It's undeniable that, in a store setting, consumers reach for the product that boasts the most features. But how much of a good thing is too much?

Finding the happy medium
To achieve lasting prosperity, companies must find a way to resolve the dilemma we've described. The first step for many companies may simply be to take stock of the complexity they have built into their products and the toll it is taking on their customers. Executives at Mercedes-Benz recently did just that and, as a result, removed more than 600 functions from its cars. In 2004, Stephan Wolfsried, vice president for electrical and electronic systems and chassis unit at DaimlerChrysler's Mercedes Car Group, said that integrating all those functions caused truly important electronic parts to malfunction occasionally and made testing the system more expensive. Moreover, Wolfsried said, the functions were ones that "no one really needed and no one knew how to use." One example he noted was the storage of a driver's personal seat position in the car key. "It was done with good intentions, but if I take my wife's key at some point and can't find my own seat position any more, that tends to be annoying for me instead of comfortable." We suspect that in many companies, simply gaining this kind of heightened awareness of customer impact would help contain feature bloat. Beyond that, we offer five other pieces of advice.

Consider long-term customer equity and not just customers' initial choices. To get the right mix of capability and usability in a product, managers need much more guidance than the general advice that "less is more." On the basis of our results, we developed an analytical model to help managers balance the sales benefits of adding features against the customer equity costs of feature fatigue. The model steers decision makers away from the extremes—too few features to capture initial sales or too many features to ensure ease of use—and toward a middle ground that maximizes the net present value of the typical customer's profit stream. The model also demonstrates that the optimal number of features depends on a company's objectives.

Build simpler products. In general, our results suggest that managers should consider offering a wider assortment of simpler products instead of all-purpose, feature-rich products. Perhaps this is the intent behind electronics giant Koninklijke (Royal) Philips Electronics' new brand promise: sense and simplicity. The concept is that products should be easy to use and should improve the quality of people's lives. The company apparently wants to take this idea beyond sloganeering: It created a Simplicity Advisory Board, a think tank consisting of designers, healthcare specialists, and technology experts, to help translate the message into new products. Meanwhile, we like the salute to simplicity offered by Adam Baker, a Web-based commentator:

I have an electronic garage door opener. It works perfectly: I just push a big, obvious button on a simple, single-function control, and the garage door opens (or closes, depending on whether it was open or closed to begin with). I only needed to use the device once before I understood how it worked. It doesn't do anything else, and it doesn't have any fancy gimmicks.

Particularly in cases where a company has packed one model with many features to address market heterogeneity, consumer satisfaction might be greatly enhanced by tailoring products with limited sets of capabilities for various segments.

Give consumers decision aids. We've just suggested creating and marketing more narrowly targeted products. Admittedly, this makes the decision process more difficult for consumers, forcing them to think carefully about which features they actually need. Moreover, our empirical results suggest that people will be tempted by products that offer greater capability. To help consumers learn which products best suit their needs, managers should consider designing decision aids, such as recommendation agents that "interview" buyers about their requirements, or offering extended product trials—two techniques that can increase the salience of usability in the purchase decision. For example, the companies that sell digital media players RealPlayer and Winamp offer evaluation versions, which give people the opportunity to fiddle with a working model of the product, sometimes with limited functionality and sometimes with full functionality for a limited time. By decreasing the gap between consumers' preferences during choice and use, such strategies may increase customers' satisfaction and their lifetime value.

Design products that do one thing very well. Perhaps the worst outcome of feature creep is the one captured in a New Yorker cartoon that shows a man arriving in a store with a simple question: "Do you have any phones that make phone calls?" Too often, in their eagerness to layer on additional functionality, developers lose sight of the product's basic function—the one thing it must do extremely well. Examples abound of products that have captured their owners' hearts by performing their central task admirably. The phenomenally popular iPod, Apple's personal music player, shows how effectively a company can make sales and satisfy customers with a tightly focused solution. As a new digital product, the iPod could have combined numerous features at extremely low incremental cost. Instead, it aimed to be a single-purpose tool that performed so well and so simply that everyone had to have one.

Use prototypes and product-in-use research. One way or another, managers must correct for the misleading information that many market-research techniques deliver. As noted, our findings call into question the predictive power of attribute-based models for determining the optimal number of features. If companies conduct market research by asking consumers to evaluate products without using them, too much weight will be given to capability, and the result will likely be products with too many features. Instead, designing research that gives consumers an opportunity to use actual products or prototypes may increase the importance of usability so that its relevance in choice approaches its relevance in use.