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.

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