- How can product managers effectively balance the desire to innovate and introduce new features with the need to address buyer resistance? What strategies can they employ?
Customers when facing a new solution to their current problems make a balance of potential gains and losses to change to a new product. There are a couple of psychological effects in this process and let me address potential solutions that I could implement as a product manager to each of them:
1. First, people evaluate the attractiveness of an alternative based not on its objective, or actual, value but on its subjective, or perceived, value.
Solution: you have to create a strong brand that transmits confidence and trust in the customer. This perceived value can be achieved through the validation of other customers that are well known in your target market, approvals by regulators, backing of large investors, proven track record of success stories, etc.
2. Second, consumers evaluate new products or investments relative to a reference point, usually the products they already own or consume. Third, people view any improvements relative to this reference point as gains and treat all shortcomings as losses.
Solution: you should make a clear and simple comparison of why using your product improves 10X the experience for the customer. This can be simply done by comparison charts.
- What role does the concept of “loss aversion” play in buyer resistance? How can product managers leverage this knowledge to facilitate the adoption of new features?
“Losses have a far greater impact on people than similarly sized gains, a phenomenon that Kahneman and Tversky called loss aversion.” This can also be explained by the endowment effect, which is that people value products that they already possessmore than those they don’t have.
There are three main ways in which a product manager can leverage this knowledge to facilitate the adoption of new features. For instance, at my company EFEX, we are trying to offer Mexican exporters to open a bank account in the US to engage in easy trade with US customers, collect in USD, save in USD, and then pay locally payroll and suppliers in MXN. To make this product easy to start using by customer we have to:
1. Make a behavioral compatible product. This means that the onboarding for a Mexican company to open a bank account in the US should be very easy wether they have a US legal entity or not.
2. Seek out the unendowned. This means that we are going to solve the biggest pain point to those businesses that still don’t have a bank account in the US. They will be willing with a higher degree to start using our product.
3. Find believers. Early adopters can be other startup founders in the export and import space that are close to my network and that would be interested in using our solution for their businesses.
- Discuss the concept of “feature creep” and its potential negative impact on product development. How can product managers avoid falling into this trap while addressing eager sellers’ demands?
A product’s value also comes from its simplicity of use and how deeply it can solve a single problem for a customer. If we have a product with a lot of features, then the focus of the development team will lead to mediocre results in the user experience. At the same time, if we have a lot of benefits and features, it will be really hard for the sales team to simply transmit the product offering and the value that you bring to customers.
