John T. Gourville’s HBR article, “Eager Sellers and Stony Buyers,” considers why and how a company’s innovations may fail, as well as how a company can better understand the mindset of their customers.
Innovation vs. Buyer Resistance
Gourville proposes that a buyer’s resistance to new products is rational as they place more importance on the potential risky losses of switching away from the status quo as opposed to whatever benefits may be introduced. As such, companies should anticipate slow adoption for larger behavior changes, which, in turn, will place a ceiling on immediate product changes. New products should aim to reduce changing the buyer’s current behavior as much as possible. As a case study, the Dvorak keyboard supposedly allowed for faster typing speeds, but widespread adoption ultimately failed as it imposed a large behavior change on existing keyboard users. Similarly, every time TikTok changes the layouts of its buttons or moves a feature from one menu to another, users complain in droves because the imposed behavioral change poses a more serious detriment than whatever benefits are introduced by these changes.
To effectively manage buyer resistance, one strategy that a company can employ is simply making the benefits significantly outweigh the perceived negative consequences of behavior changes. This means that a newly introduced product must improve a user’s experience greatly (i.e. 10x improvement) to counteract the user’s overweighting of potential losses. Back to the TikTok example, when TikTok does make changes to its layout, it often also introduces new features, such as an 2x video playback toggle, which greatly improves the user experience to the point where even I am not that mad about the layout changing.
Loss Aversion
One concept that innovative companies have to navigate is loss aversion, where an individual weighs losses heavier than an equal-sized win. Here, Gourville introduces the 9x effect, in which users overweight the status quo by 3x and companies overweight their new product by 3x, creating a 9x discrepancy. This is why a successful new product must be significantly better than the status quo to overcome these biases. With my TikTok example, new updates that cause some behavior changes (reorganizing button layout) are accompanied by a stack of beneficial new features (2x video playback, automatically translated captions, photo comments, etc.) to the point where users are eager to update rather than averse to it.
Feature Creep
Although a company may be incentivized to continuously add new features to overcome buyer resistance, Gourville urges against falling into feature creep, where new features can lead to higher learning curves and behavior changes, which actually pushes products into long haul/sure fail territory (obviously not what the company wants). To protect against this, a company can implement guardrails in which features that preserve habits from the status quo as much as possible are prioritized and an upper limit to allowed behavior change is set. This way, when launching a new product, the company can maximize the benefit to behavior change ratio, allowing the product to thrive.
