Navigating Loss Aversion: A Product Revamp Tale
How understanding what your customers view loss will boost your product adoption
Their reluctance to transition to a superior version stemmed from the absence of features they hardly utilized but were accustomed to
Recently, I revisited Daniel Kahneman's classic, "Thinking, Fast and Slow." It got me pondering about loss aversion and its profound impact on our decision-making. This psychological barrier to change impacts our personal lives and the products we build.
This reflection took me back to a time when I led the launch of a revamped version of an existing product with a loyal user base to revitalize our stagnating market share. In planning the MVP for this new version, our primary focus was on the novel value we aimed to offer our customers to build on our existing loyal customers and grow our overall market share.
For months, we engaged with our prospects and current and former customers. We sought to understand their needs, the gaps in existing tools, their aspirations, challenges, and the contexts in which they operated. This extensive research led us to craft detailed personas for each segment and map out user journeys, highlighting the jobs to be done.
After investing additional months in ideation, prototype development, and refining our solution, we finally reached the moment of truth. We previewed the new version to some existing customers, eagerly anticipating their enthusiasm. To our dismay, it went over as well as a lead balloon at a birthday celebration.
While the new features and capabilities were appreciated, our loyal customers were concerned about missing features from the previous version. What surprised us was that these features were seldom used or addressed edge case scenarios that rarely occur.
This feedback was a wake-up call. Their reluctance to transition to a superior version stemmed from the absence of features they hardly utilized but were accustomed to.
With a few sprints remaining before the official launch, we swiftly reintegrated those features. We ensured they met the basic expectations of our existing customers without over-committing resources.
The final product was well-received, with both our existing customers and new prospects embracing it wholeheartedly. However, overlooking their loss aversion almost derailed our efforts. It's a lesson in the importance of understanding user concerns and constraints to adoption, especially when trying to replace a well-entrenched product—even if it's your own previous version. And as we had anticipated, those reintegrated features remained underutilized in the new product. Yet, their mere presence was crucial for user transition.
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