Understanding the underlying forces which motivate us into making a decision is important. When a customer enters your store, or visits your website, the process of deciding whether she will buy your product begun long ago. Tens of subconcious factors which influenced her opinion will hold her back or push to buying it. Even if you product is ten times better than her current one, the pull/push of subconcious is much stronger.
The Frustration Push
For some people, to buy a new product the frustration must be great with its current one. A problem that only annoys might not be enough to trigger a buying intent. Also, the pull of the new product or service has to be strong too to motivate an action.
The new solution has to help customers make progress that will make their lives better. This is where companies tend to focus their efforts, asking about features and benefits, and they think, reasonably, that this is the roadmap for innovation. How do we make our product incredibly attractive to hire? But it’s not always the case.
The force which opposes change
Loss aversion — a subconscious bias which may be responsible for more failed decisions in a persons life than you think. The same force which doesn’t allow people to easily switch to new products, change houses, restaurants with their favorite food, life partners (even if the situation is bad) and many more.
Loss aversion is closely related to habits. Through our lives we gain habits, which are hard to break. Take into account only people who can’t quit smoking. They weigh down our decision-making process — “I am used to doing this for years”. Or people who are frustrated with a product but are used to it — “Yes, I hate it, but I am used to it and can’t change to a new one”. Consumers are often stuck with present habits.
Sometimes, there is anxiety of choosing something new — “What if the new product is not better?”. The thought of switching to something new cripples a great number of people. Sticking with their current product is bad, and they know it, but the effort investment was already done and mentally it is easier to stay with current option.
Same reason some people refuse to upgrade their phones to newer and better versions. Even if it is 10x times better. The idea that they have to throw away an old investment overwhelms them. Or as said by Kahneman and Amos Tversky in their book Thinks Fast and Slow:
Loss aversion — people’s tendency to want to avoid loss — is twice as powerful psychologically as the allure of gains.
The anxieties that come into play are powerful: anxiety about the cost, anxiety of learning something new, and anxiety of the unknown can be overwhelming. That’s why companies such as Apple or Google promote a lot the easiness to transfer your data from one phone to another. Once a device becomes “your life”, you are afraid to lose what’s inside — making the transfer to a new product harder. That’s why being a customer to one company, almost always guarantees that you will buy from it again (only, if the experience was pleasant). And a customer will rarely switch to another company/product.
We hate losing stuff
Understanding loss aversion is important in design. Loss aversion is people’s tendency to prefer avoiding losses to acquiring equal gains.“It is better to not lose $5 than to find $5.”
What distinguishes loss aversion from risk aversion? The utility of a monetary payoff depends on what was before experienced. Or was expected to happen. Some studies have suggested that losses are twice as powerful, psychologically, as gains.
We are, by nature, loss averse. We hate losing stuff — no matter if it is money or simple points.
An interesting experiment of gamification was applied and implemented in Italy for drivers. Once you get your driving license, you receive a certain amount of points (20). And every time you violate a traffic rule, for example ignoring the traffic light, you lose points (in this case 6). This psychological trick decreases the chances that you will do it again. And because of its effectiveness, many countries applied this demerit point system (more info).
Note: Some countries do it vice-versa. They give you points for violating a traffic rule. And giving instead of taking will skyrocket a terrible behaviour. There’s evidence that drivers were boasting between themselves on who had the most points for breaking the law. Giving points for bad behaviour means encouraging it.
Forces of anxiety — what if?
“What if….?” may be the most important question when thinking about the decision making of switching to a new product.
- What if the new device fails?
- What if I don’t like their service?
- What if the new product fails at some point?
- What if I find myself in an unanticipated situation? Who will help me then? Will it cost money? How long will it take? How many times can it happen?
- What if I will want to switch back?
- What if… ?
This can go forever. We choose most products because they can assure us of something. They can guarantee us peace of mind (it varies per person). And if you can deliver that successfully, then you won.
That’s why many companies, such as Adobe, fail in gaining new customers lately. Locking users into annual contracts, with 50% fee if you decide to cancel it midterm, isn’t the best idea (cough, taking into account there are countless better alternatives). It pushes people off when you ask for their credit card in advance, lock them in annual contracts with no flexibility and so on. And yes, you will earn more money, but it reduces their trust.
Innovators all too often focus exclusively on the forces pushing for change — making sure that the new solution for resolving a customer’s struggle is sufficiently alluring to cause them to switch. But they completely ignore the powerful forces blocking that change — Competing Against Luck, C. Christensen
Habits, loss aversion, anxieties, are the actual forces which hold a customer from switching to your better solution. Think of it this way: the job has to have enough size to cause people to change their behavior — “I’m struggling and I want a better solution than I can currently find” — but the pull of the new must be much greater than the sum of the inertia of the old and the anxieties about the new.
Version 1 to version 2
It’s not only switching to a new product or service a problem, but also to a new version for a current product. How many of you seen that your customers don’t want to change to a newer version of your product because of fear of loss? “What if I don’t like the new version?” Even big companies struggle with this, when it comes to motivating people to switch to a newer version of their OS (Apple, Google, Microsoft).
Change — something humans don’t love and are uncomfortable with, and this applies to products too. Especially when we make people use our newly released version of a product when they don’t want or need it.
Let’s say that you are working on the V2 of your product, and are about to release it. What if there are people that don’t want it and are comfortable with using the V1 of your product? Most companies don’t take this into account, because they think: “But V2 is better, why would you not want to switch?”
Here is an example. For project management I am using Basecamp. And when they have been working on redesigning their app, halfway through their process, they asked themselves “What if people don’t want to move to a new version and they are used to their current one?” Because moving from V1 to V2 means migrating the data, converting formats, and presenting an entirely new user interface. And they decided not to force the migration. Things won’t change for current users, and the change was optional. This way the company saved resources, time and kept customers happy.
Sometimes, you have to fight against the obvious. And sometimes you have to recognise that time in doesn’t equal benefits out. Doing nothing can be the hardest choice but the strongest, too — “It Doesn’t Have to Be Crazy at Work”
And it’s not only Basecamp who took this type of approach. Another great example is Freshbooks — all-in-one small business invoicing and accounting solution. In this case, I was on the other end, as a user, and experiencing it myself.
When they improved the product and released a new version of it, they made the transfer optional. So you could switch at any convenient moment to V2. Also, you could switch between versions, by keeping your data intact, and see which one suits your needs better. You could play around and test things out. This way you put less stress on your customers, save them time and keep them happy.
And if you wonder, after playing around with the new version I switched to it in several weeks. But this happened only because I had the time to play around with V2, get used to it, and once I was convinced, I made the switch.
What can you do for your product? Try to review and think about what keeps people away from switching to your product. What unanwesered question they might have. What anxieties do they have when thinking about switching? Can you solve them?
One more thing
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