The Homa Files

Excerpted from MediaPost.com,”Stubborn Customers Shun The Greatest Product Innovations”,Kalehoff,  Mar 14, 2008

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40% to 90% of all new products fail.  According to Harvard prof John Gourville that’s because consumers are creatures of habit and they irrationally overvalue the benefits offered by products they’re already using. They despise having to change their behavior to use an innovation. Consequently, they often reject products that are objectively superior to the incumbents they’re already using.

Conversely, companies mistakenly mark their own innovation as a frame of reference, and therefore irrationally overvalue the benefits it provides. This deadly combination results in a “mismatch between what innovators think consumers desire – and what consumers really want.”

In response, Gourville suggests anticipating and managing consumer resistance to changes as innovation requires during adoption. Specifically, he recommends:

1. Gauge the Degree of Behavioral Change Required. For example, is your innovation an “Easy Sell,” which provides limited benefit and limited behavioral change? Or is it a “Sure Failure,” offering few benefits and significant behavioral change? Is it a “Long Haul,” providing great benefit but also great behavioral change? Or is it a “Smash Hit,” offering tremendous benefit and little behavioral change?

2. Minimize Consumer Resistance. Not surprisingly, Gourville recommends making products that require little behavioral modification. Uniqueness and features – often marketers’ top selling points – can be detrimental. Second, market to new consumers who aren’t loyal to competing incumbents. Thirdly, market to consumers who “prize” the benefits they’d gain, or don’t value those they’d have to give up.

3. Manage Consumer Resistance. Gourville recommends bracing for slow adoption. Especially with “Long Haul” innovations, be careful to deplete marketing resources too quickly. Furthermore, consumers overvalue existing benefits of incumbent products by a factor of three, on average, while companies overweight the benefits to consumers by a factor of three – resulting in a nine-fold gap. To overcome the “9X Effect,” companies must introduce products with 10 times the benefit.

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=78486&passFuseAction=PublicationsSearch.showSearchReslts&art_searched=gourville&page_number=0 

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This entry was posted on February 4, 2009 at 6:08 am and is filed under Mktg - Consumer Behavior, Mktg - Product & Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.