Wednesday, February 25, 2009

New is not always better

Improved is not always better either. As companies we often try to quickly improve on what we previously sold or serviced. The lure of doing a new product launch, the temptation to ignore the dismal sales of the old product, and hearing our new and improved product excitedly discussed within our company in a sort of messiah tone is a great pat on the back. However, sometimes that new and improved product is the wrong answer. Sometimes what's new doesn't actually matter to the consumer.

There are a lot of reasons why this may be the case - a poor product, high competition, mixed messaging, no market, the crap economy - all the excuses we tell ourselves when something doesn't go as planned.

One of the biggest reasons stuff that is new, improved and offers 'more value' rarely takes off is that there is no scale. What is it better than? Is it better than something I even care about? If it's improved, what does that even mean? Does the improvement relate to me and how I use your product?

Roger Dooley wrote a great article in Neuromarketing about the need for consumers to be able to compare and relate. This is less about choice (which is often debated as a consumer purchase trigger) and more about scale. If I know that x service gives most of what I need and costs me y, and x2 service gives me all of what I need want and costs me y2, then I can make an 'educated' purchase that leaves me happy and comfortable. I've left educated in quotes as Martin Lindsrtom will quickly point out that we rarely make a purchase based on a cognitive decision making process.

Roger uses the case study of the The Economist, which was trying to sell combined print and online subscriptions. Here are the results:

Offer A:

$59 - Internet Only Subscription (68 chose)
$125 - Internet and Print Subscription (32 chose)

Predicted Revenue - $8,012

Offer B:

$59 - Internet Only Subscription (16 chose)
$125 - Print Only Subscription (0 chose)
$125 - Internet and Print Subscription (84 chose)

Predicted Revenue - $11,444

Crazy. No logical difference between offers. The only difference - Offer B gives me more information to judge my decision. Not just that, Offer B actually persuades me to spend more on what I want rather than what I need. Classic decoy marketing. Often misused and overlooked in advertising and product launch marketing.

Lesson Learned:
  1. We focus too much on the story we want to tell and to little on the story the consumer wants to be told.
  2. Consumers aren't logical, so don't market as if they are.
  3. The success of a new product has far less to do with the new benefit, and for more to do with how that benefit relates to your consumers view of your existing benefits.
  4. Usually the last thing on a marketer or product/service managers mind - sometimes targeting the low hanging fruit is just better. This is about raising the floor instead of just focusing on raising the ceiling.
You already know that it is easier to talk to someone you know over a stranger. Apply that to your marketing and you'll end up finding a new standard for value and something that's actually relevant to consumers.