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Why won’t anyone buy our newer/better thing?
Understanding how the “Threshold Theory” can help make product launches successful
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Why won’t anyone buy our newer/better thing?Threshold Theory
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So often when a company comes up with a new product/service, or more likely a slightly new spin on an existing product/service, we think it is going to take off like a rocket ship. “Well, now that our thing is better the checks should start rolling in!!!”
Then nothing special happens and we don’t know why.
We overestimate the power of a new feature and a well crafted :30-second spot and we underestimate how real people actually make choices.
Stanford sociologist Mark Granovetter wrote a series of papers that say individuals’ behavior depends on the number of other individuals already engaging in that behavior. In other words, people are influenced by what they think others will do, are doing, and most importantly what they think others will think of them.
Granovetter Threshold Theory (in a nutshell)
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Low Threshold Town - they do what everyone else does
High Threshold Town -each person is more likely to make independent choices
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Granovetter uses the example of two cities in which the conditions for a riot exist. Town A is filled with low threshold people. The guy with a 1 threshold breaks into a store and is surrounded by a bunch of other low threshold people each person influencing the next to join - and a riot starts. Town B is populated with higher threshold people (except that one crazy guy). The guy with a 1 threshold breaks into a store…and someone calls the cops. No riot.
Town A
Town B
Free TV’s!!!
I’m calling the cops!
Cool…..What does this have to do with me, a super-savvy marketing exec (or whatever you call yourself…I don’t judge)?
Because understanding these “thresholds” and the effect they have on behavior gives us insight into why people buy things.
The curious case of the “unknown author”
Threshold Theory
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In 2013 an unknown author published his debut novel. Robert Galbraith’s new novel had pretty good reviews.
“…a complex and compelling sleuth” - Publishers Weekly
“Auspicious Debut” - Daily Mail
Better than most debut novels. It sold a grand total of 1,500 copies.
The curious case of the “unknown author”
Threshold Theory
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Then on July 18, 2013, it was revealed that Robert Galbraith was really J.K. Rowling. Within a week sales of the book had gone from 1,500 copies to 300,000.
This should prove both frustrating and instructive to marketers and product managers.
One - The book did not get any better with the revelation that J.K. Rowling was the writer. The intrinsic goodness of a product does not guarantee its success.
Two- The idea that “the rich get richer” is real. It takes a lot to change what people already do. It is easy, safe, and takes less brain power. “I like J.K. Rowling’s books, so I will by this one.”
Surprise, I’m Robert Galbraith
5 Ways The Threshold Theory Works*
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*There are more (you can read the whole paper), but we will focus on the ones that affect us.
5 Ways The Threshold Theory Works
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Trying something new or novel. “I need to see someone else try it before I do.”
Diffusion of Information
How many times does someone have to hear something before they believe it.
Rumor
People go where people they are familiar with have already gone.
When a high school kid is surrounded by other kids that are going to college they tend to think, “I guess this is something we all do.” If you don’t know anyone that is going to college it feels more much more daunting.
Migration
The cost of one person doing something can be very high. One person cannot strike - they just quit a job.
Groupon and jet.com exploit this idea.
Group Size
Threshold Theory
People tend to vote (use/buy) for what is already popular
Are you going to the restaurant with only two reviews on Yelp? Didn’t think so.
Voting
What Can I, the Humble Marketer, Do With This Valuable Information?
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Internal Truth
Understand that a Threshold is about a cost/benefit ratio
Threshold Theory
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Every buying decision a person makes is based on the perceived benefits vs. the perceived costs. They know about the toothpaste they already buy or the software system they already use. They don’t know about your new thing. It might stink.
People also have different thresholds for public and private behavior. When I am in polite society my threshold for eating Nutella by the spoonful is very high. I like to pretend I have dignity. When I am by myself the spoonful of Nutella threshold is super low.
Like a One.
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Get an Honest Understanding of the Relative Threshold of the People you are Selling to
Threshold Theory
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Are you selling to the riot starters or to conservative high threshold people? Low threshold people are easily influenced by those around them. High threshold people need to see that everyone else is doing something before they join in. Low thresholders will also be early adopters. High threshold people might still be using Explorer as their browser.
Consider factors like age, the strength of a particular community, and how likely people are to share. A great vacation spot is more likely to be shared then a great proctology experience.
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External Change
Touch15
Mind Feeling
Let them “touch” the new thingThreshold Theory
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You are asking people to try something new. If your target is used to doing something a certain way - lower the hurdle doing your new thing by making it as easy as possible by lowering the perceived cost (time,money,emotional, etc).
Disruptors like Warby Parker lets us experience the “new” thing without fear. That the glasses wouldn’t look good on me or that I will feel foolish if the quality is lower then I would have gotten at the local eyeglass store. Pain-free experimentation
How can you allow consumers to “feel” your new thing?
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Give them piece of mind by making it simple
Threshold Theory
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People tend not to change if they feel something is going to be complicated, even if the new thing is “better”. Better is pretty subjective - the perception of difficulty doesn’t seem like it is. I can be pretty annoyed at my bank, but changing banks feels like a huge hassle. So I stay with the same lousy experience that I know.
Newer online focused banks like Ally Bank show potential customers how easy it is to switch with phrases like “This should only take five minutes.” That is a lot shorter than my last customer service call with my bank. In the first three years of its existence, Ally grew from Zero accounts to One Million.
How can you radically simplify how consumers view your new thing?
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Change perception by making them feel something
Threshold Theory
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Threshold is set not only how many people around us are doing something, but by how many people we think are doing something. Change the perception of what group they are or want to be in. Are you a person that lives in a where everyone buys SUV’s (so you do) or are a person that is like others that want to protect the environment (so you buy the first electric car in the neighborhood).
A customer that feels a connection to you or to a shared purpose is more likely to change behavior.
Change the cost-benefit equation from a competing list of bullet points to a shared story. The shared story can be about the product and the consumer, but creating a shared story among like-minded consumers is much more powerful.
What is your shared emotional purpose?
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Bibliography & Credits
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• Marsden, S. (n.d.). The Cuckoo’s Calling: Publishers' embarrassment at turning down JK Rowling detective novel. Retrieved September 06, 2016, from http://www.telegraph.co.uk/culture/books/10178960/The-Cuckoos-Calling-publishers-embarrassment-at-turning-down-JK-Rowling-detective-novel.html
• Law firm admits leaking J.K. Rowling's alter ego. (n.d.). Retrieved September 06, 2016, from http://www.cbsnews.com/news/law-firm-admits-leaking-jk-rowlings-alter-ego/
• “Diffusion” Icon by Jean Yashu, from thenounproject.com. • “Rumor” icon by Chris Dawson, from thenoundproject.com. • “Group Size” icon by Danil Polshin, from thenounproject.com. • “Voting” icon by Iconfactory, from thenounproject.com. • “Migration” icon by Sara JOY, from thenounproject.com.
• Salganik, M. J., & Watts, D. J. (2008). Leading the Herd Astray: An Experimental Study of Self-fulfilling Prophecies in an Artificial Cultural Market. Social Psychology Quarterly, 71(4), 338-355. doi:10.1177/019027250807100404
• Granovetter, M. (1978). Threshold Models of Collective Behavior. American Journal of Sociology, 83(6), 1420-1443. doi:10.1086/226707
• Granovetter, M., & Soong, R. (1983). Threshold models of diffusion and collective behavior. The Journal of Mathematical Sociology, 9(3), 165-179. doi:10.1080/0022250x.1983.9989941
