“Loss aversion” plays a major role in buyer resistance based on this reading. The concept is based on the idea that buyers are often unwilling to lose what they already have, which can include losing value on items they already own (for example, replacing a gaming system with a new one would render all games for the old system useless, even if they still physically own the games). Product managers can leverage this knowledge to utilize what customers already have instead of trying to replace it. Building on existing concepts or ideas with minimal loss can be a useful way to draw consumers in to a new product. The example the reading provided of a Prius is a perfect one – rather than fully pivoting to the new technology, the Prius is more of a transition from traditional car to electric vehicle, which makes it less intimidating and doesn’t ask consumers to experience the loss of their traditional car experience.
A key question here is whether or not to replace old products with new ones. In the makeup industry, products are constantly cycling, but many consumers get frustrated with the loss of colors or kinds of products they like when the industry comes out with entirely new ones. However, there are tradeoffs – companies may not be able to afford making and maintaining old and new product lines, so they sacrifice their older ones to try and draw new customers and expand their market, though it could(and often does) cost them loyal consumers. Understanding customer loss aversion may not always help in cases like these, but it can provide valuable insight and product managers can still use this knowledge to help minimize the impact on consumers. Keeping shade names consistent and maintaining similar shades in new products can help consumers feel less like they’re losing their favorite makeup product and more like they are upgrading to a new one.
