Bloghound

Companies overvalue the appeal of their new products to consumers by a factor of three, and consumers overvalue the benefits of existing products over new products by a factor of three.

So explains Harvard Business School associate professor John Gourville in a fascinating and pragmatic article in this month’s Harvard Business Review, “Eager Sellers and Stony Buyers: Understanding the Psychology of New Product Adoption.”

“There’s a fundamental problem for companies that want customers to embrace innovations,” he writes. “While developers are already sold on their products and see them as essential, consumers are reluctant to part with what they have. This conflict results on a mismatch of nine to one between what innovators believe consumers want and what consumers desire.

“Until businesses understand anticipate, and respond to the psychological biases that both consumers and executives bring to decision making, new products will continue to fail.”

How to address the problem?

Gourville provides a behavioral framework that explains why so many products fail and suggests how to manage consumer resistance, including making behaviorally compatible products, seeking out consumers who aren’t yet users of incumbent products, striving for 10X improvement in innovative products.

I’d suggest that there are marketing fundamentals that we need to pay more attention to as well.

Don’t drink the Kool-Aid, accepting the product managers and executives’ passion and conviction about innovations. Our job is to bring the customers’ perspective into the company, not merely “promote” new products from an insider perspective. Grouville says that executives are unaware of their bias toward new products. “Studies show that when anticipating others’ judgment or choices, people find it impossible to ignore what they themselves already know or believe to be true.”

Focus our communications more on what the customer needs to make sense, or make meaning, about new products. The three essential meaning making ingredients: framing the innovation within the customer’s context; pinpointing the few things that are most relevant to the customer (the features and benefits our product managers and executives find relevant to them); and being cognizant of the customer’s emotions about adopting a new product that requires behavioral change, be it fear, frustration, anxiety or anger.

New Product News says 80 percent of new products fail. If we marketers better understand how the mind works in adopting new products, maybe we can shave at least 10 percentage points off that bleak statistic.

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