A response to “Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption” by John T. Gourville, published in the Harvard Business Review.
- How can product managers effectively balance the desire to innovate and introduce new features with the need to address buyer resistance? What strategies can they employ?
- One main strategy that product managers can employ is to create products that have significant changes, with significant benefits that outweigh the incumbents, but that also have limited behavior change for the consumers. Companies can do this by making behaviorally compatible products, reducing the behavior change that the innovations require. This is the strategy Toyota used with the Prius. The Prius was a smash hit as it have significant benefits as a hybrid vehicle but did not require any consumer behavior changes.
Another possible strategy, if the company is big enough is to eliminate incumbent products. A large entertainment company could simply cancel an old show to get their customers to watch a new one they think is better or more profitable.
Companies could also target users that have not yet used incumbent products so they will not have a benchmark to resist the new innovations.
- One main strategy that product managers can employ is to create products that have significant changes, with significant benefits that outweigh the incumbents, but that also have limited behavior change for the consumers. Companies can do this by making behaviorally compatible products, reducing the behavior change that the innovations require. This is the strategy Toyota used with the Prius. The Prius was a smash hit as it have significant benefits as a hybrid vehicle but did not require any consumer behavior changes.
- What role does the concept of “loss aversion” play in buyer resistance? How can product managers leverage this knowledge to facilitate the adoption of new features?
- Consumers evaluate the attractiveness of new products based on subjective value, relative to the reference point of the products or services the already own/use. Losses are viewed relative to this reference point and “loss aversion” means that losses have a 3x effect than similarly sized gains. Similarly to the answer to the prompt above, PMs can leverage the knowledge of consumers viewing losses irrationally bigger by limiting the behavior changes and loss of product features for each new innovation. Instead of always replacing features for innovations, they can simply add on more features. In time, since this might add on too many features and over-complicate the product, they can slowly erase the least used, least important features as consumers start to use the newly added ones. PMs can have the first question the ask themselves and the team when developing new features be “what change am I asking of consumers”. Because the bigger the behavior change, the bigger the likely resistance from consumers, they need to keep the behavior changes a little as possible.
