Lots of small and medium sized businesses make really great products and offer first rate services. In many cases they are better than the established big brands, and yet in their desire to challenge the market leaders, most run in to the same obstacle:
The prospect or potential customer makes a poor decision, sticking with the established supplier even though the product or service isn’t as good.
Many of the challenger brands are striving to become the new leader, the ‘default’ choice in their market.
So why do defaults persist, even in the face of ‘better’ options? Here are four factors that help explain why customers stick with their established choices and don’t make ‘rational’ decisions:
Inertia – sticking with what we know usually requires the least effort on our part as customers. When we are in a hurry, it’s an easy solution.
Lack of expertise – in a situation where we feel unsure of ourselves and our ability to select the right option, the ‘default’ can be seen as representing advice from more knowledgeable customers.
Risk of change – while implicitly accepting that ‘the usual’ may not be the best choice, we know it well and what we might miss if we switch to an alternative. Sometimes the known ‘loss’ can outweigh the potential ‘gain’.
Too difficult – our initial enthusiasm to find a better alternative can evaporate if we discover that comparisons are complex and drive us back to our regular option.
So, armed with this understanding, what can we do?
As a challenger, consider each of these potential barriers and find ways to reduce them or even remove them completely. Can we make switching easier, can we give prospects the ‘expertise’ to make a better decision, can we mitigate the risks?
If we are already the ‘default’, we need to emphasise what our customers get from us, to reduce the risk of complacency, and highlight the risks of switching. Oh, and keep an eye on the challengers too!
Chris.
Why do prospects make ‘bad’ decisions?
