After reading the article, I learned that new products being objectively “better” than their older counterparts fail at a rate of 40%-90% due to the psychological reasons behind behavior change. It is critical for product managers to manage a balance between innovation and buyer resistance.
One strategy is to focus on identifying genuine customer needs before investing in new products or features. I am currently learning in CS147 that proper needfinding and testing experience prototypes are methods to ensure that products can actually address problems experienced by users. It is important to involve users early in the development process to undergo many iterations of prototyping before a product is both useful and desirable. Another strategy is one I learned in CS278, and that is to test a product in an “atomic network” – a small group of users, rather than to a massive population, to see if the product will succeed. If the product gains traction, then the next step is to expand to larger populations. For example, consider an instance of “future creep” – where the addition of excessive features dilute the product’s core value, rendering it either unusable or undesirable. Let’s say a social media company had millions of users worldwide and updated their app several times within a year. The updates contained many new features that the company deems as innovative and helpful. After the updates, people begin to dislike the app, saying it is too “busy” and “disorganized”. They begin to delete the app and the sellers take a loss. Instead, if they released new features only in a smaller country and monitored the impact of their changes closely, they could gauge customer sentiment with a lower risk of product failure and decide to expand from there.
The reading described the concept of loss aversion as: the pain of loss is more intense than the pleasure of gain, people perceive adopting new features as risky, and people value products they already possess aka the “endowment effect”. I think that being aware of loss aversion is the first critical step in mitigating avoidance. With loss aversion in mind, product managers can focus on minimizing the potential losses rather than only highlighting gains. This method could help sway cautious buyers. As an example of loss aversion in my life, I do not update my phone’s iOS out of fear of losing the familiarity with the features I am already used to. However, if I was assured that the features I am used to will stay or hardly change, I may be convinced to update.
