New is not always better. When it comes to marketing, creating innovative products is not always going to be good for your brand. In fact 40% to 90% of new products fail and buyers will often favor the traditional over the ‘new’.
Take for example Coca-Cola who designed a new product in 1985 and where sure from all of their team that it would be a sensation. They released the drink as “New Coke”, certain of its success. All their market research had assured them that people would love it.
Unfortunately for Coca-Cola it was one of their biggest failures. Buyers didn’t like the new taste and complained about the new formula. They wanted the old coke back and buyers were beginning to stockpile the traditional drink.
It only took Coca-Cola three months to bring back the traditional formula. It was a hard lesson to learn but they finally discovered that “new” doesn’t always mean better.
As I mentioned the majority of new products fail. It’s not only new products but companies that try to be innovative and define new product categories also are at risk of failure.
Why New is Not Always Better
It’s not only the product that matters but the perceived value and losses for the customer. People tend to have a psychological bias that causes them to place greater value on what they already have. This means that even if you create a better product it may be perceived as being worse because your customers will overvalue the benefits they are already receiving.
People also tend to overvalue losses and undervalue gains. This makes them cautious in trying new things if it means giving up the old. There’s also effort required in trying something new. The benefits of the new product need to outweigh the losses and effort required to try it out.
Buyers who are risk-averse will avoid the new in favor of the traditional and will hold to products and solutions that are already well known. Those who are looking for novel solutions will be more willing to accept or try a new product.
This means you need to know who your buyers are and whether they are ready to try something. It’s a matter of understanding the mindset of your buyers and identifying with them. In this way you’ll be able to craft your pitch so that it makes sense and offers value beyond and above the perceived value of what they are already receiving. Giving you a greater chance of success with your “new” service or product.