In Business, it's Better to be Mediocre than Great

ByABC News
December 17, 2008, 4:08 PM

— -- Don't try so hard, vendors. Because when it comes to luring customers, "consistently mediocre" tops "inconsistently amazing" most of the time.

That's according to P.J. Lamberson, a visiting professor at MIT's Sloan School of Management, who found that firms that deliver mediocre products do better in the long run than those that are less consistent, even if their products occasionally rise to the level of insanely great.

Mediocre tops amazing because of customer feedback, including reviews and recommendations that appear on just about every retail Website these days, Lamberson notes. Positive feedback, in the form of user reviews and product rankings, drives purchases of new products, particularly when a new technology is involved.

Okay, right now you're thinking, "Tell me something I didn't know?" True, there's a big chunk of obvious in the link between positive customer response and product sales. But the study does offer a fascinating revelation: consistently mediocre wins long-term Hasn't Microsoft built its entire empire on this strategy? Think about it: MS-DOS, Windows, Internet Explorer -- all consistently mediocre. Compare that with Apple's erratic performance over the years. True, it has been on a hot streak the past few years with the iPod, iPhone, and so on, but the company has endured plenty of lean times as well, particularly in the late 90s when its products were less compelling. Apple is truly inconsistently amazing. In the long run, Microsoft's business approach -- intentional or not -- has proven more successful.

In the MIT study, "Better Late than Variable: The Strategic Advantages of Consistent Positive Feedbacks," Lamberson and his coauthor, Scott Page from the University of Michigan, also question conventional marketing wisdom that states that rapid expansion is the best way for a business to gain a competitive advantage. Rather, the study concludes that "the product with the highest feedbacks always wins out."

In other words, people tend to buy products that other people recommend. Now you know.