Product: It’s a mindset
There are countless products and services in the world, each with its own unique characteristics and development process. In this post, I want to explore the general mindset of marketers when it comes to products and services.
The Foundation: Solving the Customer’s Problem
We’ve already discussed one of the most critical aspects of product development—identifying the customer’s fundamental problem in a given situation. In fact, a common reason for failure is focusing solely on product development while overlooking the customer’s actual needs, which underscores the importance of problem identification.
Why Great Products Still Fail
But even when we successfully identify the customer’s problem and develop a product to solve it, there is still a high probability that the new product will not be adopted. This is due to psychological biases on both sides—companies and customers. Companies tend to overvalue the benefits of their new products, while customers often cling to familiar options because they overvalue the benefits of the products they already use.
Eager Sellers and Stony Buyers
In the influential article “Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption” by John T. Gourville, the author reveals a striking insight: customers tend to overvalue the benefits of existing products by a factor of three, while companies similarly overestimate the appeal of their new offerings. This mismatch often leads to resistance in market adoption.
Strategies to Improve Product Adoption
So how can we respond? The author offers several practical mindsets and strategies to increase the chances of successful product adoption. Let’s explore a few of the most important ones.
1. Balance Innovation with Behavioral Change
First, it’s important to balance product innovation with the amount of behavior change required from customers. New products often demand that customers behavior change. If we can develop a highly innovative product that requires minimal changes in customer behavior, it’s likely to be a major success. On the other hand, a product that introduces only slight improvements but asks customers to change significantly will likely fail.
2. Be Patient with Customer Adoption
Secondly, we need to anticipate and accept customer resistance. Patience is key when it comes to slow adoption. This is important because when companies wrongly assume that customers will adopt new products quickly, they often end up depleting their resources too early in the process.
Think of launching a YouTube channel. At first, you might expect viewers to quickly discover and enjoy your content. You invest a great deal of time and energy into making videos—only to feel discouraged by slow growth and limited feedback. While a few creators may go viral early on, most do not. If you belong to the majority, you need to expect slow adoption from viewers and manage your energy and resources wisely and patiently.
3. Aim for 10x Better Products
Thirdly, this may sound obvious, but it’s a powerful mindset shift: to overcome the psychological biases of both customers and companies, strive to create a product that is not just slightly better—but ten times better than existing alternatives. This level of improvement helps break through resistance and makes the value proposition undeniable.
4. Target Non-Users of Incumbent Products
Lastly, seek out customers who do not yet use incumbent products or place little value on them. For example, Burton Snowboards targeted non-skiers rather than trying to convert existing skiers. Another example is the island of Bermuda, a small place where most drivers travel less than 20 miles. In such a setting, consumers are less reliant on traditional fuel networks like gas stations, making it an ideal environment to introduce alternative energy transportation. In fact, Bermuda has become a leading location for developing and testing fuel cell technologies.