I buy from only a few places.
While my loyalty is great for these companies, it's not great for companies introducing new products.
A brand creates trust through the quality of its products. Once that trust is created it's hard to break. Our brains prefer simple. Once we find something we like, our brains stick with it. We don't want to re-think the choice again. When I think ankle socks, I see Uniqlo in my head. They've checked off all my boxes for what I look for in a good pair of socks. I don't have to think about socks anymore. I think Uniqlo.
Sure we all like to try new things. After all, that's how we found everything we love. But there's a risk with the new.
First, economic. When you change to something new you have to pay money and put time into learning how to use it. When we choose something new, we bet our time and money is going to payoff.
Companies are often aware of the economic costs their potential customers see. It's why companies often make big budgets to educate customers and to make switching easier.
So why is it that 40-90 percent of new products still fail?
What most companies don't consider is the power of the psychological cost of switching.
Our brains irrationally overvalue what we use now
Once we find something we like, we not only stick with it because it's easier but we overvalue it. So much so that even if a better product comes along we likely won't switch.
Researchers have consistently shown that we value what we have to lose more than what we have to gain. One study found that most people won't take a bet if the odds of winning and losing are equal. The chance of winning must outweigh the chance of losing by a factor of between two and three before most people find the bet attractive.
People need to see about three times more in value in order to change their behavior.
What makes the success of a new product even more challenging is product makers fall for this trap too. Because makers have a sense of ownership of their work, they tend to value their product's benefits three times more than the competition.
This creates a dilemma. There's a 9x difference between what product makers think customers want and what their customers actually want.
As John T. Gourville a Professor at Harvard Business School with a Ph.D. in marketing and behavior research said,
"It's not enough for a new product simply to be better. Unless the gains far outweigh the losses, consumers will not adopt it."
How to make your new product look like a safe bet
Before you launch your new product, be aware of what people are using instead. If you want to design a new way to get food to people, you're up against grocery stores, Costco, and Amazon Prime. Know what the majority of people are using first. Then, consider how your product will be 9x times better.
While you make a much better product, your aim is to limit behavior change as much as possible. If you're designing an iPhone app, use gestures and elements that people know how to use. If you're building a photography app and your camera works different from Apple's camera or Instagram's, you will be fighting an uphill battle.
You can't just make something a little better to stand out. You need to be so much better it's obvious for people to switch to you. Your product must make people feel 'wow' multiple times. Ideally, nine.
Making a product nine times better right away is hard if not impossible. There's lots of risk building something nine times better right away. So pick features that will have the biggest impact and build those first. Be two times better. Then, three times better. Get to nine eventually.
Focus is key to doing one thing 9x better than anyone. If you make a product 9x better, you will know. People will naturally stick around. They'll tell their friends. You'll get out of the battle of the brands. Human nature will take care of all the sales and marketing you could ever ask for.