Eager Sellers, Stony Buyers & the Four Progress Making Forces

A great benefit the web provides to curious souls is the ability to lose oneself in ideas, one link after another until you can’t remember where you started anymore. That’s how I came across an HBR article—”Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption“— by John T. Gourville. I’m sure I came across it in my continuing exploration into the jobs-to-be-done framework, but I couldn’t tell you exactly how I came upon it. Nevertheless, it’s a great companion piece to those of you getting into JTBD and, in particular, the Four Progress Making Forces by the fine folks at The Rewired Group.

The article  provides context for the push and pull concepts in the four forces diagram (my version of which sits below and includes some of Clayton Christensen’s innovation lingo).

The Four Progress Making Forces Diagram

The article explains the psychology behind consumer behavior and how sellers can tap into that knowledge to help them increase sales. Some takeaways:

  • The likelihood that someone will buy is based more on perceived value than actual value.
  • Consumers use a reference point—something they already own or use—as a way to compare a potential new purchase.
  • This reference point acts as a way to judge the new option. If the new option is perceived to be better than its reference point, it’ll be viewed as a positive or a gain. If it’s perceived to be relatively inferior, it’ll be seen as a negative or a loss.
  • Losses have greater psychological impact than similarly sized gains and will therefore lead people to value that which they already own or use (the “endowment effect“). Buyers value losses at about three times the rate of gains while sellers value gains by a factor of three over losses. Combined, the gap between buyers and sellers can be 9x.

All of these points and the supporting documentation that Gourville includes speaks directly to the idea behind two of the four forces– the habit of the present and the anxiety of the new. They help you understand why people resist innovations, even ones that will benefit them.

On the flip side are the other two forces—the push of the situation and the magnetism of the new—that entice and encourage the adoption of new products and services. The article explains that anything new is ultimately judged as a series of trade-offs. A consumer will gain something here, but lose something there. If, in aggregate, the gains outweigh the losses, the new thing can win a convert.

One way to view the landscape is to say that sellers “…create value through product change, but they capture that value best by minimizing behavior change. That results in a simple but powerful matrix.”

behavior/product change

As you might guess, sellers want to find themselves in the “smash hits” quadrant. They typically require consumers to change their behavior as little as possible while experiencing great gains in terms of what the new product or service offers. The trick is to reduce behavior changes on the part of consumers and/or increasing the value gained in switching to the new offer. Some advice:

  • Be patient: Adoption will likely be slow, so plan on that being the case. This obviously has implications on how you manage resources since you may need to run lean for longer than you’d like.
  • Strive for improvement: Increase the perceived gains so that they outweigh perceived losses as much as possible. Perhaps this means you need to delay a launch or wait for the status quo to naturally change in your favor.
  • Eliminate rival products or services: This is easier said than done, but you can tip the scales in your favor through regulatory bodies who can use their powers to help your cause.
  • Align behaviors: Build products or services that work with customers’ current behaviors, if at all possible.
  • Target non-consumption: You can avoid the endowment effect by finding customers that don’t already use an existing product or service. That population won’t have ingrained behaviors that could pose a problem.
  • Preach to the choir: Seek out people who are actively willing to adopt your innovation and let them advocate on your behalf.

My First Concert

I headed to my first concert three days before I turned 20 to see PJ as they were breaking big on MTV. Because I designed promos and ads for the events council at CU I was able to get in early and free. I stood right in front of Stone Gossard (he’s the one with the long hair… oh, wait…).

I have two vivid memories of the event. One, the hearing loss from the terrible opening band who set their amps to 11. Second, a recollection of the scene in the room after the show ended. Since I stood in front of the stage all night, I was among the last people to head toward the door after the fun ended. I remember a ton of clothing on the floor (surely lost by the body surfers, right?). T-shirts, bras, shoes, pants (pants? Really?) and other unidentified clothes-like crap.

Good times.

Change and the Habit of the Present

Christina Wodtke gave some needed depth to an old cliché: people don’t like change. Whether or not change is adopted, she argues, is not determined by a simplistic and innate dislike for new things. It’s determined by how well the change is communicated and how smoothly people transition to it. Wodtke writes:

“…when a big change comes, the end user is focused on what they have lost: productivity, comfort, familiarity. And the user weighs that loss as three times more important that any gain that company professes to offer.”

Her thoughts are like those that underly the ‘habit of the present,’ one of the four Progress Making Forces. Understanding why people stick with their present set of products, services and solutions is fundamental for product designers who want to grow their customer base. Two important points are highlighted in Wodtke’s work and we’ll explore them below:

  • Good enough: Two different solutions to the same problem can co-exist, even if one is clearly superior to the other. How? Via Clayton Christensen’s “good enough” concept– some people actively expend extra effort that an inferior solution requires compared to its superior alternative because switching has too many costs in terms of productivity, comfort and familiarity. You’ve probably experienced this phenomenon yourself. Think about a product or service that a friend has recommended you use, but you haven’t. Why haven’t you? It may be because your current solution gets the job done well enough and switching to the new solution will cost you too much in other ways.
  • Active resistance: Better solutions may be actively fought by people and systems that stand to lose in some way if it’s adopted. Lobbyists , for instance, will do all they can to torpedo new laws that threaten the status quo and the mechanisms by which they benefit from them. David Gray has researched change within organizations and has concluded that to affect change necessitates a deep understanding of culture– knowing what is and isn’t possible so that opportunities can be taken advantage of while challenges can be addressed before they cause trouble.

To overcome the good enough mentality will not only require you to sell the advantages of the better solution, but also require a transition plan for those using the existing (i.e. “inferior”) solution. Wodtke gives examples of how some sites have done this, but ultimately failed in their execution. Why? Because not enough effort was expended to acclimate customers to the improvements so that they would feel impelled to adopt it.

Active resistance is often political. It requires good salesmanship toward customers, but also to other stakeholders, direct or indirect, who feel they’ll lose something real or perceived. You may need to haggle, coerce or compromise in order to ease the pathway for these constituents who could otherwise actively work to thwart your efforts.

Of course, all of this is moot unless the new thing is actually an improvement over the old. Your ideas are vetted along the way, right?

Bad Feedback

Screen Shot 2013-10-25 at 10.53.01 AM

I visited Ustream’s website and needed to update my password. The form they offered to do so indicated that what I entered wouldn’t work. The error it gave me said I used an illegal character, but they didn’t indicate what character was the issue. I’m left to guess what character is problematic. Why not tell me? Why set my expectation that I was entering a valid password (“Password strength: high”) next to the form field only to find out that it wouldn’t work?

A better site experience would work like this: as I’m typing, the site tells me an issue exists with provides me helpful text showing me what the problem is and how to solve it.

The best site experience would work like this: let me use whatever characters I want as part of my password sidestepping any problems at all.