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product development articles

Is There Customer Uncertainty About Buying Your Products?

product risk framework

As a marketer it is imperative to reduce the uncertainty your customers may feel about your product. Uncertainty can take the form of needing more information, not having enough experience with your product, not enough evidence to assure them that it will perform as desired. Uncertainty contributes to indecision on trying or purchasing your product. There are different avenues that a marketer can take in order to reduce this uncertainty…read on…

One factor that drives uncertainty for the customer is the size of the investment. The bigger the investment, the more risk your customer feels about purchasing your product [1]. For example; purchasing a new vehicle will cause more pause for thought versus purchasing a piece of fruit. This of course, is relative depending on the income/demographics of your targeted group.

There are two types of purchasing uncertainty that your customer’s experience: Behavior- and Use-Related Uncertainty.

Behavior-related uncertainty refers to the way the company treats its customers. Treatment during the acquisition of a product signals how the company will treat the customer after the purchase [2]. To reduce behavior-related uncertainty, treat your customers well in the steps leading up to, during and after the purchase. A great way to overcome this uncertainty is by providing your potential customers with testimonials, test drives and references from past clients.

Use-related uncertainty occurs when the customer is unable to tryout or experience your product prior to the purchase [2]. In the software world, you can provide case studies, free trials or a demo. In the consulting world you can provide case studies or free webinars. In the CPG world, you can provide free samples at the grocery store.

If your customer doesn’t have experience with your product (e.g., entirely new innovation), you will have a new set of uncertainties to address. Is it a product with an entirely new technology? Is it a new product category? New to the company? Or are you going after a new market? This is where the Diffusion of Innovation model fits in…read below.

Diffusion of Innovation

When you are releasing a new product/innovation/technology, you need to think about potential early adopters that can have an impact on the diffusion of your product. Everett Rogers developed an approach based on the innovation decision process [3]. This process lists the five major stages that individuals go through to reduce uncertainty about a product when deciding on whether or not to adopt it.

uncertainty in product development

In the knowledge stage, the person becomes aware of the product, how to use it and how it works as well as its advantage over other products .

During the persuasion stage, the person becomes more actively and psychologically involved with the product, ultimately forming a favorable or an unfavorable attitude toward the product. Because there is uncertainty with a new innovation, at this stage people feel a need for social reinforcement and confirmation that they are aligned with their peers. Personal interactions are important at this point.

Once the person enters the decision stage they engage in activities that lead to adopting or rejecting a product. The ability to try out the product is important in this stage.

If the person decides to use the product they move into the implementation stage where they put the product to use. There is a lot of information-seeking at this stage and the company needs to focus on providing assistance in using this product. This stage ends when the person no longer considers the product new.

Even if the person, has purchased the product, it doesn’t mean they have adopted it. In the last stage, confirmation, the person seeks further reinforcement. It is important that the company provides supporting messages because negative messages may circulate encouraging alternative solutions.

When it is important to reduce uncertainty about your new product, keep the innovation decision process in mind. The key is to make your customer feels certain and confident when they purchase your product, especially if the size of the investment is large.

If you want to learn more about uncertainty with product development, please go to this link: http://www.strategy2market.com/dealing-with-uncertainty-in-product-development/

If you want to learn more about uncertainty and strategy, please go to this link:
http://www.strategy2market.com/strategy-and-uncertainty/

 

[1] Gaubinger, K., Rabl, M., Swan, S. and Werani, T. (2015) “Innovation and Product Management: A Holistinc and Practical Approach to Uncertainty Reduction,” New York: Springer
[2] Backhaus, K., & Voeth, M. (2010). Industriegütermarketing. München: Vahlen
[3] Rogers, E. (1995) “Diffusion of Innovations,” New York: The Free Press

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