Change: The Double Edged Sword
“This product is going to change your life.” I sure hope not. Instead of being met with fanfare, companies ushering in new innovations may be met with a freak out. This is because the very change they are excited about may be the very thing that makes consumers apprehensive about adopting their new product. This represents the consumers resistance to behavior change, causing a mismatch where “consumers overvalue the existing benefits of an entrenched product by a factor of three while developers overvalue the new benefits of their innovation by a factor of three.” A divide of 9x? This tension between the positive product changes and negative behavior changes is something companies need to deal with, closing this gap. So, why are consumers so against change?
Loss Aversion
What I found interesting was that, as many causes of conflicts are, this loss aversion is irrational. The article introduced work by Kahneman and Tversky which showed that losses have greater impact than gains, leading to the endowment effect (where people value products they already have over products that they don’t) and status quo bias (where people are averse to change). The question arises as to how companies can respond to this. First, they should be particularly aware of this loss aversion— to know that both imposing new costs and getting rid of benefits will be “viewed as a loss.” The article introduced an example with which I personally identify with— switching from paper books to ebooks, saying that this “has more negative psychological impact than it does gains.” How would the cost/benefit analysis work in this case? The article writes that the benefits include portability. A new cost is the device to read ebooks on (e.g. a Kindle), but most people have some sort of electronic device so what is the true “loss” faced here? The article says “durability.” But I disagree. I feel like it’s more emotional. I think what people lose is the sentimental value; the collection of books on a shelf is just as much a decoration as it is a physical manifestation of me— these are what I’ve read, what I like. It’s a physical experience. There’s a “new book smell.” There is also the tactile feeling of turning the page that holds the memories of someone showing you how to do so. To switch to ebooks would be to lose all of that.
Solutions
Let’s now apply some of the article’s strategies to this ebook problem. One of the most compelling ones was the idea of seeking out the unendowed. In other words, get ’em young! If ebook companies target young children who haven’t been reading on paper books yet, then they can avoid the loss aversion of sentimental experience because this experience hasn’t formed yet. Another solution is finding the believers. With ebooks, this could be targeting everyone from the environmentally conscious (reducing book waste) to the travelers (need to pack light).
