Why your product is not selling?

What companies do you usually see failing? A company that introduces a new product or that doesn’t?

Easy guess. The former one.

What is the reason? Is the new innovation by these companies isn’t that good? Wasn’t their product giving any benefits to the people they targeted? Actually none.

Studies show that new products fail at a stunning rate of between 40% and 90%.

But there might be an explanation.

The answer is simple. Customer behavior changes. These behavior changes incur costs. It might be a transactional cost, activation cost, or learning cost. But aren’t these the costs that a company always considers while building a product?

What businesses don’t take into account, however, are the psychological costs associated with behavior change. People irrationally overvalue the benefits they currently possess relative to those they don’t.

For instance, studies show that most people will not accept a bet in which there is a 50% chance of winning $100 and a 50% chance of losing $100. The gains from the wager must outweigh the losses by a factor of between two and three before most people find such a bet attractive.

• Why people won’t buy electric cars? Because they don’t want to lose easy refueling over a clean environment.
• Why people won’t buy an e-book? They don’t want to lose durability over portability.
• Why people didn’t buy a digital video recorder? They don’t want to lose their rented movies over easy recording.

If you see it in a similar way the producers are not aware of this bias comes-

• They overvalue their innovation more than what people are currently using.
• They think if they know the location of the treasure, the others would find it.
• Or if they know the solution to the puzzle, others know to solve it.

It is termed the “curse of knowledge”.

But, again what is the solution?

Firstly, it is simply the balance. The balance between the product and behavior change.

Product and Behaviour matrix

Rather than the explanation — Let’s take the example of each.

• Easy sell — Toothbrushes with angled heads, detergents with improved whiteners, and cookies with organic ingredients.
• Sure Failure — Dvorak keyboard over QWERTY.
• Long haul — Linux system.
• Smash Hits — Google search engine over Yahoo’s engine.

Second, minimizing resistance-

• Strive out the 10x — Make the relative benefits of their innovations so great that they overcome the consumer’s overweighting of potential losses. MRIs offer a 10x improvement over X-rays, and angioplasties offer a 10x improvement over bypass surgeries (but not everyone can make 10x innovative products, so a few other ways are below).
• Making behavior-compatible products — Toyota embraced this tactic with its hybrid electric vehicles. A smash hit. Provided drivers with both the combustion engine and self-charging electric engine. The result is a driving experience that is virtually identical to that of a gasoline-only car. Consumers obtain a significant increase in gas mileage, yet they retain all the benefits of the superior alternative.
• Seek out the unendowed — Find the users where you don’t have to fight the bias of traditional products. Find the people with no products in hand. Tell them the problem and the solution.