The Psychology Behind Switching Software
Companies across the world spend billions of dollars making new products, only to have consumers flatly reject them in the majority of the time. Even innovative products with high-profile backing flop with consumers. Take Tivo for example: a brand new concept with rave reviews from early adopters and industry experts alike. Still, Tivo’s demand trailed and the company amassed $600 million dollars in operating losses by 2005.
Thinking back on my own experience with Tivo, it far outperformed cable companies’ DVRs. Why do I, and my fellow consumers, fail to buy new innovative technology when the improvement over existing technology is so abundantly clear? With each and every innovation, the variable that most heavily influences the opportunity for a new technology to take hold, and the most unknowable variable at that, is human behavior.
To understand why people adopt new products, we must understand the behavioral mechanisms behind the human connection to products and spending. As much as we’d like to believe that we make choices based on rational analysis and logic, at our core, we’re all just a bundle of cells influenced by neurochemical pathways, which work together to create complex emotional drives.
Believe it or not, the emotion we experience watching a romantic comedy is about the same as when buying and using a new product. You would think, especially in B2Bs, professionals would make decisions based on facts, but buyers don’t leave their emotions at home. Even the most mundane industrial products are known to be influenced by emotion, which is reported at 10% or more of purchasing decisions.
Our emotions stem from our drive to fulfill basic human desires. Complex emotions operate on a simple pleasure/reward system. Our brain tells us if an action fulfills a desire by releasing dopamine, which makes us feel good. Any good product will fulfill one or more of those desires, and cause our brains to ‘light up’ with pleasure when we use it.
After an emotional trigger occurs, and results in a positive reward, your brain wants to make sure you repeat rewarding behaviors. For that reason, emotion is closely tied to memory and behavior, and the brain uses that to form habits. Emotion, habit, and reward all play into one another. Habits are a three part process starting with a cue (emotional drive), followed by a routine (use of product), and ending with the reward (dopamine release).
And while the brain is very good at forming habits, it’s not very good at breaking the habit loop — think about people who try to quit smoking, or start a new diet regiment. As soon as behaviors become automatic, the decision making part of your brain goes into sleep mode.
Businesses rarely take into account the difficulties of behavior change, hence copious product failures. There’s a psychological bias that comes from forming a habit, which causes people to value their current advantages of a product they own, against one they do not. The layers of a habit form a bias, and both are difficult to break. The best way to approach changing a habit is to understand the 3 part structure (cue, routine, reward). In getting customers to switch, your tactic needs to change the habit at a vulnerable point, or create a new one.
Remember the story about Target collecting terabytes of information on shoppers to market pregnancy-related products to them, some before their families even knew they were pregnant? New York Times writer, Charles Duhigg says:
“The biggest moment of flexibility in our shopping habits is when we have a child..because all of your old routines go out the window, and suddenly a marketer can come in and sell you new things.”
Sure, that specifically infamous situation got complicated, but the idea is applicable to any business; it’s all about timing. Target found an opportunity to create a new habit, and likely succeeded in many other cases. Apply that to switching software. For example, in B2B, you might look for a time when a company is experiencing rapid growth, launching a new product line, or starting a new program. Even if your customers are using a competitor software, a big change might be the impetus needed to break the habit with an old product.
Remember, habits are a 3 part process, and to change a habit or create a new one, you need to compel people from a place of emotion and desire. Here are a few points that will help your brand sway customers:
- Stand For Something: People invest a lot of emotion into creating a personal value system, and generally want to identify with companies that share those values. Brand message connects people with company values, and prove successful as more and more consumers are beginning to pay attention to how businesses contribute to social and environmental issues.
- Understand Instant Gratification: People crave instant gratification as a neurological response: MRI studies show that the frontal cortex is activated when we think about waiting for something, and our mid-brain lights up when we receive something right away — the latter is what your brain wants to reward with dopamine. In turn, people are highly receptive to the speed of return when they spend hard-earned money. Simply saying ‘instant’ or ‘quick’ turns up mid-brain activity, as we envision our problem being solved right away, and purchasing a product is more enticing when a problem vanishes instantly.
- Belonging: People have a natural desire to belong to a group, we want to be accepted and understood — just think back on your teenage years if you need a refresher. Our brains crave consistency, so much so that even being told we belong to a group makes us more receptive to a message (as long as we associate that message with something positive). For example, labeling a customer as an ‘elite’ will make them more inclined to take action if they believe they are joining an elite group.
- Break Through Action Paralysis: People are much more likely to take action when you ask for the minimum. Research in nonprofits has proved this time and time again. For example: “Would you be willing to help by giving a donation?” vs. “Would you be willing to help by giving a donation? Even a penny helps.”
The second variation is nearly twice as successful. Subtle, yet effective. Offering up a small action is more likely to get people to make a move, breaking through ‘action paralysis’. Making a change to a different software is easiest when the new product requires the least amount of change, especially when it comes to behavior.
- Display High Trade-Off Value: People irrationally favor the status quo, and no matter how innovative a software is, people tend to weigh a switch in terms of gains and losses. Awesome new feature in your software = gain, but letting go of the current product = loss. It’s not enough for a new product to simply be better, the gains must far outweigh the losses in order to persuade people to switch.
Consumers often fail to buy and switch over to products that are objectively better, more innovative, or smarter valued for an individual or business. This has much less to do with economic and utilitarian value and more to do with emotional whims and established behaviors. To attract users and convince users to switch from one software to another, we must understand, anticipate, and respond to the psychological driving forces that consumers and executives bring forth in decision making — understanding that at the heart of every great product is a behavioral pattern it appeals to.