“Eager Sellers and Stony Buyers” suggests that the reason for many, many failed products is not due to their inherent design of the product. Yes, bad products exist and fail, but so many GREAT products also exist and fail. And this is due to the failure of businesses/product managers to truly consider the psychology of buyers as they evaluate new products, especially to old products that they know and love.
First of all, product managers must be aware of the difference between their perspective as the omniscient designer/businessman of their product, in comparison with the user’s perspective as the customer of a random new products. Many times, the desire to innovate, and belief /closeness in their own product, biases them in the direction of their product. The thorough knowledge that they have gained as the builder of their own product and a researcher of competitors can actually manifest as a curse. Users do not have the same information, or, more importantly, the same motivation to research that information.
To combat this disconnect, product managers must learn the skill of accurately estimating costs on the side of the buyer; the article lists a few such as transaction costs, learning costs, obsolescence costs, and psychological costs. Avoid the innovation-as-status-quo mindset. Frequent returns to user interviews and critical user journeys can remind product leaders of reality and recenter them in the status quo. Practically, product managers should continuously root their decision-making and predictions from REAL user behavior and REAL user interviews. This allows product managers to do the most difficult thing – to capture psychological biases, not just objective advantage of their product compared to competitor products. Awareness of buyer resistance, and why, is the first step.
When evaluating a new product, customers tend to compare with an existing baseline (i.e. a product that they already own). People tend to view any improvement as a gain, and any shortcoming as a loss. This can be difficult to assess objectively because this analysis is highly subjective from customer to customer, especially when considering the abstract value of psychological cost. “Loss aversion” is the phenomenon where losses have a disproportionately higher impact on consumers in comparison to similarly sized gains. Given any product, if someone owns it already, they would demand double the amount of money as they would be willing to pay for it in the first case. This is unfortunate news for product managers trying to ship new features and gain customers.
For product managers, this means they must balance product change with behavior change. The more behavior change required from a customer, the more friction they have to buying a new product. Successful products include “easy sells”, which are new products with minimal behavior change and small increase in quality, but also “smash hits,” where a great amount of benefits are offered while requiring minimal behavior change. These are the products with the fastest adoption. Alternatively, businesses must be patient and accept that slow user adoption is sometimes necessary and expected in the face of innovation.
