Repeat after me: time is money, time is money, time is …

TakeAway: When it comes to designing products and services, companies would do well to keep in mind the old saying “time is money.”

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Excerpted from WSJ: Beat the Clock – How companies can use time to their competitive advantage, October 26, 2009

History suggests that by helping consumers save time or more fully enjoy the time they spend doing something, companies could gain a competitive advantage that could lead to higher sales and profits. Consider the success of innovations such as fast-food restaurants, automated-teller machines and countless labor-saving appliances.

Consumers are continually searching for new offerings that might allow them to do more in less time, and they are growing  less tolerant of organizations that waste their time—say, by keeping them on hold too long or providing poor service.

 

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There are 3 ways that firms can turn time into a source of competitive advantage.

  1. They can help consumers do things faster by, for example, making a product easier to buy, use or throw away.
  2. They can make the time involved in using a product or service more pleasurable.
  3. Or they can design offerings that empower people to choose the mix of time and value that is right for them.

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Managing Time as a Price Paid

… and get the price down.

  • Doing It for Them. One simple approach is to help people get more than one thing done at a time. The Roomba vacuum from iRobot Corp., for instance, seeks to get the time-cost associated with the use of a vacuum down to zero by working automatically once it has been turned on. Roomba’s promise is that it “cleans routinely so you don’t have to,” freeing up the customer to do something else.
  • Picking Up the Pace. In many cases, consumers just want to get things done faster. The fast-food industry made it possible to purchase a meal in just a few minutes when it pioneered the drive-through window. Other businesses took note: Today, drive-through services exist at banks, coffee shops, pharmacies, liquor stores, and even at certain wedding chapels in Las Vegas.
  • Shrinking the Commitment. The expression “I’d like to do x, but I just don’t have the time” is uttered with great frequency. A solution is to reduce the “size” of the time needed to complete a task. Examples include speed dating and “lunchtime face-lifts” that takes 30 minutes.
  • Ending the Wait. Getting people out of line also allows companies to reduce the price of time in their offerings. Whole Foods Market Inc. instituted a bank-style checkout system at grocery stores in Manhattan, where customers form two to three big lines and move to one of the more than 30 registers per store as they open up. While this process can make the lines that feed into the registers look frighteningly long, it actually gets large crowds through the store more quickly, the company says.

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Managing Time as Product

In our survey of North American consumers,  70% agreed or strongly agreed that they would be “willing to spend more time doing product or service labor” if companies “could figure out how to make the experience more satisfying or engaging.”

The family dinner is an example of something that lends itself well to rethinking time-as-product. Studies have shown that many families wish they could eat more meals together, but they are overwhelmed by the amount of work it takes to get a home-cooked meal on the table.

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Giving Customers the Choice

It can be difficult to determine whether a customer is interested in saving time or enjoying it more at any given moment. So some companies are putting the “time dial” in their customers’ hands, allowing them to switch dynamically from fast to slow, depending on their feeling of time pressure at a particular moment.

The evolution of self-service technologies illustrates some of the simplest examples of this approach. 

Online retailer Blue Nile Inc. employs the “choice” strategy when it comes to selling diamond-engagement rings. In many cases, the time cost involved in buying a diamond ring isn’t in favor of the buyer — often a young man making a once-in-a-lifetime purchase. Whether he shops at a diamond warehouse or a high-end retailer, he is likely to find the process of eyeing even a few product samples through a jeweler’s loupe time-consuming and unfulfilling, and to feel pressure to make a difficult and expensive decision in a hurry.

With Blue Nile, the proverbial shopper in his pajamas can spend as much or as little time as he wants researching the diamonds—by cut, size and many other criteria—online. From there, he can shop for particular settings or rings, pricing out the products with a variety of options. Once he has reviewed his choices, his purchase can be quickly executed. Throughout, the purchaser is in control of his time and the pressure is off to hurry a decision.

While critics originally said this business model was doomed to fail, because people wouldn’t go online to buy a product whose sentiment is supposed to “last forever,” the company says diamond engagement rings now account for 70% of its overall sales, and it estimates it has a 4.5% share of the U.S. engagement-ring market.

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Consumer attitudes about time are a moving target, and companies must constantly reset their sights.

Tasks that were once seen as easy are now often viewed as burdensome, such as renting videos from a brick-and-mortar store when movies are available for purchase digitally at home.

Full article:
http://online.wsj.com/article/SB10001424052970204038304574145390833891688.html?mod=djemMM#printMode

One Response to “Repeat after me: time is money, time is money, time is …”

  1. Trick question: To patients, what’s the price of free healthcare? « The Homa Files Says:

    […] I always assert to my students that people always, always, always under value their time See archive post “Time is Money” […]

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