Consumers typically overvalue the possessions they have due to loss aversion and value gains much less than losses. This psychological phenomenon plays a significant role in buyer resistance. When introduced to a new product or feature, consumers instinctively weigh the potential losses – in terms of what they might be giving up from their current product – more heavily than the benefits they could receive from innovative products. Essentially, they evaluate new offerings relative to their existing reference points and view any deviation from this standard status quo, even if minor, as a potential loss. This perception is further intensified by the “endowment effect,” where consumers place a higher value on products they already possess, making them less inclined to part with or replace these items.
This buyer resistance mismatches product champions who also overvalue the innovations they are offering. Product managers find themselves in the middle of this conflict. They often grapple with the challenge of fostering innovation while countering buyer resistance, a phenomenon rooted in the tension between product changes and the behavioral adjustments they demand from consumers. Innovations, by their nature, introduce new features; however, the more they innovate, the higher the resistance they’re likely to face due to the status quo comparison from consumers.
To effectively balance innovation and resistance, product managers must first determine where their product falls. The reading presented a nice matrix to visualize this. The matrix categorizes innovations based on the extent of product and behavioral change they introduce. Products can fall into ‘easy sells’ with limited changes on both fronts, ‘sure failures’ that demand drastic behavior changes without significant product innovations, ‘long hauls’ which are transformative in nature but demand equally significant behavioral shifts, or ‘smash hits’ that revolutionize the product space without demanding substantial behavior changes, like Google’s user-friendly search algorithm.
Strategically, several avenues can be pursued. Firstly, accepting resistance (Be patient) is crucial for innovations that inherently demand significant behavioral shifts. This means preparing for slower adoption rates, as illustrated by the comparison between the rapid uptake of TiVo players versus the slower adoption of DVD in the reading. Another strategy could be to aim for a ’10x improvement’. If the benefits of the new product significantly overshadow current options, as MRIs did over X-rays, resistance can be offset. A third strategy could be to remove older, competing products from the market by completely deprecating them. An example of this can be seen in Canada’s shift from paper bills to coins. If these aren’t feasible – which most usually are not – minimizing resistance is key. Designing innovations that align closely with existing behaviors, like Toyota’s Prius which combines traditional and electric driving in hybrid cars, or targeting segments less focussed in current behaviors can lead to smoother adoption. Of course, the target audience can also help influence the magnitude of this resistance. If product managers are able to seek the unendowed or believers in their innovation, they can completely bypass this initial resistance by definition.
