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Human Behavior, However Confounding, Should Drive Product Strategy

Posted on 3.31.2017

In his book, Predictably Irrational, Dan Ariely – James B. Duke Professor of Psychology and Behavioral Economics at Duke University and accomplished author – explains that motivating human behavior is sometimes incredibly difficult and proceeds in an illogical fashion. Extrinsic motivators, such as awards, often not only fall short, but are counterproductive. Even financial incentives are not enough to motivate us to action.

This tendency of humans to confound expectations is a vital issue for product managers, because if they can leverage their knowledge of the human psyche in product strategy, they’ll have a better chance of creating the next must-have gadget, must-use service or must-try experience. If a company can do it first, and drive a mass adoption of a gadget, service, or experience, they’ll be able to ride the tendency of people to procrastinate in order to hold onto our user base (and revenue streams) for a long time. This will give product developers the breathing space – vital in our hypercompetitive era – to create the next generation of products, services and experiences.

Think about it. Why are people still using Yahoo! Mail? How many abandoned profiles do you have on long-gone social networks like MySpace or Vine? How many subscriptions to magazine, movie channels, gyms, services, etc., do you have that you want to cancel – but you just haven’t gotten around to it? You know you need to do it. You just don’t want to do it today.

This tendency to procrastinate is a big factor in why the businesses that are first to mass adoption are very difficult to shake loose. What do Netflix, Facebook and Kleenex have in common? They were all first to mass adoption. They are arguably ubiquitous in their respective spaces. A significant portion of AOL’s revenue STILL comes from dialups. Yahoo! STILL has millions of subscribers. Why? It’s because once you’ve made the effort to sign up, subscribe, or use a product that gets the job done, it takes some effort to move away from it – and you don’t really want to expend that effort. It’s that simple.

So when do we finally make that effort? What kind of motivations work?  A powerful one is the intrinsic motivator of social acceptance. Let’s look at why MySpace died and Facebook took over. A few major reasons come to mind.

  1. Facebook was perceived to be significantly better
  2. It didn’t require much effort to switch
  3. All your friends switched

Reason #3 is very powerful – it is the intrinsic motivator social acceptance. Let’s look at a more recent example: Blackberry. Remember Blackberry? Weren’t they first to mass adoption in the smart phone market? What happened? I’m sure that’s exactly what their leadership wondered about as they saw their revenues plummet and market share collapse. Sure, some folks still use Blackberry devices – mostly because their employers have a requirement to do so. Not many do it willingly, and when they do, it’s likely their other pocket likely has an iPhone in it. Not because the Blackberry cannot make a phone call, but because they would not be caught dead using a Blackberry in public. Social acceptance is powerful.

In summary:

  1. If your product is first to mass adoption by end-users, human nature creates an almost insurmountable barrier for the competition. It requires little energy to keep the momentum going.

  2. People hate change - unless there is a significant PERCEIVED benefit to making that change.

  3. Social acceptance is a huge motivator. Use it carefully in your product strategy – as what got you there could also cause your demise.

This last point requires emphasis. If you fall into this human tendency to procrastinate and don’t use the breathing space the mass adoption you achieved bought you to create the next generation of product, service or experience, your company will likely fail in the long run.

Bringing our new understanding of the human psyche and extrinsic and intrinsic motivations to product strategy should be a part of the product manager’s job. Remember, however, the rate of change continues to accelerate and there are still many mysteries hiding in human behavior. Therefore, a good rule of thumb is to get your product/service/experience to market quickly, collect feedback and try again. In the words of Jon Bon Jovi, “Success is falling 9 times and getting back up 10.”


About the Author

As CTO of 10Pearls, Ghazanfar Ghori bridges the gap between clients and development teams and ensures that software meets quality attributes from the very start. Ghazanfar is an expert on state-of-the-art technology platforms and frameworks, with a focus on big data, cloud and mobility. He has worked for companies like NVR, Virtual Logic, and Spacenet and has a BS in Chemical Engineering and Computer Science from the University of Maryland.

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