Understanding Buyer Resistance
There’s a common misconception among companies on the perceived value of their more “cutting-edge” innovations for their buyers, with novelty believed to deliver more value and utility than commonality. However, this belief is challenged by the underlying psychology of buyers and a phenomenon called loss aversion, in which the fear of losses outweigh any desire for achieving the same amount of gains. For buyers, this means loss aversion leads people to overvaluing existing products since there’s a greater pushback to giving up what they already own, leading to buyer resistance in response to innovation.
Implications on Product Development
Major product changes that diverge from what’s familiar inevitably demand higher behavior change from buyers to adopt, in which an important correlation emerges – “the bigger the behavior change, the bigger the [buyer resistance] will be” (Gourville, 6).
This notion should be an important consideration in product development, which, branching off of my own experiences in product, will usually begin with innovation given an initial problem statement and end with user adoption, not the KPI but adoption likelihood in general, as an optional afterthought. The concept of feature creep, in which a product loses value due to becoming too complex or expanding past its initial scope, is a good example of how a PM’s desire for novelty in innovation can manifest as a product development problem. In the end, the chase for innovation can bring the product further away from the customer, yet another problem is that the customer may only know the new cutting-edge product they were hoping for isn’t actually what they want. So what should a PM do? Solidify a product vision as a north star for the initial MVP and lower priority product features, and re-emphasize the vision as a key decision-making framework for additional requests.
Innovation in Face of Resistance
Innovating in the face of resistance will first require an acknowledgement that innovative product changes will require behavior change from customers. This means there’s a tradeoff between innovating for a break-through, valuable change and minimizing customer behavior change.
To navigate this tension, product managers need to understand and build behaviorally compatible products (Gourville, 7) – the above tension isn’t mutually exclusive. There are several prime examples in the EV industry which became a break-through success, with one being Prius’s success in replicating a gasoline-like driving experience for their own EVs. For PMs, the research needed to understand customer behavior is to know the ins and outs of their status quo, creating continuous feedback loops to measure and iterate on their knowledge of their customers’ behaviors. In that sense, understanding when customers experience loss aversion can guide the design of new products, such as how Prius used loss aversion to make new behaviors still feel familiar for their customers, or to ensure legacy features aren’t deprecated in an abrupt manner.
