Have you ever wondered why so many new products/services fail in the market? Why is that most customer don’t see the value in the product that the early adopters are able to see? In the book, crossing the chasm, the author talks in detail about this gap that exists between visionaries/early adopters and the vast majority.
For a product to scale or to be adopted by the vast majority, the customers have to see the value in the product. The value helps the vast majority to rationalise their purchase decision. Scaling quickly is important for certain business models to benefit from economies of scale. However, there are a number of hurdles on the customers’ journey.
Every human knows the value or benefits of going to the gym or going for a jog. But how many of them actually prioritise these activities? Though the road to the gym or park is flat, there are a number of hurdles: packing the workout clothes, packing a towel, wearing your running shoes, the distance between your place and gym. Packing your gym bag the night before or enrolling in a gym that is closest to your place puts you on the path of least resistance.
“The path of least resistance is the pathway that provides the least resistance to forward motion by a given object or entity, among a set of alternative paths.”
Water, electricity and everything including humans take the path of least resistance.
When product managers want to scale their product, they should think about the path of least resistance. Removing obstacles from the customers’ journey could significantly increase the adoption of a product.
Let’s take the example of Amazon. One of the biggest problems that Amazon faces is the abandoned cart problem: where the customer has the intention to buy and has added the products to the cart but has not completed the transaction to complete the sale. The abandoned cart is a serious problem in the retail industry where the margins are razor thin.
Usual stages while purchasing a product on Amazon.
- Go to the card
- Key in your shipping address
- Search for your card information
- Key in your card number, turn the card to find CVV
- Sometimes the card provider sends a verification code
- Find your mobile, get the verification code, key in the verification code
- Finally, complete the purchase
During these stages, most customers are thinking “Do I need this product?” and might fallout if they are not able to rationalize their purchase decision.
There are several ways in which Amazon tries to address this problem by nudging the customers to the path of least resistance.
- One-click buy : Customer are encouraged to save their shipping details, card information so that they complete the transaction with a single click.
2. Pre-load Cash : In markets such as India, Amazon incentivizes the customer to pre-load cash from their bank account to Amazon’s account.
The new path to purchase
- Customer adds products
- Clicks a button to complete the purchase
Another big hurdle on the shopping journey was the shipping cost. Eugene Wei in his article title invisible asymptote wrote
“People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I’m convinced, so critical to much of how we unlocked growth at Amazon over the years.”
Amazon removed this hurdle by using the Amazon Prime service. Amazon decoupled the shipping cost and made the customer prepay for Amazon Prime service. As Eugene Wei wrote,
“It turns out that you can have people pre-pay for shipping through a program like Prime and they’re incredibly happy to make the trade. And yes, on some orders, and for some customers, the financial trade may be a lossy one for the business, but on net, the dramatic shift in the demand curve is stunning and game-changing.”
How does Amazon remove obstacles from purchasing items that you buy regularly such as laundry liquid?
- The answer is the subscription model. Opt-in to the subscription once and the products are delivered to you every month. There is absolutely no resistance in the subscription model.
- Amazon even introduced physical buttons (Amazon Dash) to enable customers to order products without visiting their website.
Amazon has been trying to apply the path of least resistance even to the physical world using its concept stores called Amazon Go. Research has shown that customers buy more goods and spend more money when they are using cards instead of cash. Amazon Go stores remove even the card from the shopping journey. Walk into the store, pick up the goods and leave. As simple as that. Amazon plans to open more 3000 Amazon Go in the United States.
Another service that is rumoured be around the corner is the pre-delivery of goods that you might need based on all the data that Amazon has about its customers. Amazon will predict and deliver the good into your house. You can keep the goods that you need and return the remain goods. Amazon Key, a service that allows customers to grant Amazon access to their house is seen as a step towards this pre-delivery initiative.
These are some of the ways, Amazon nudges a customer to the path of least resistance. So, if you are a product manager, think about the various hurdles on the customer journey. How could you remove the hurdle so that the customer is on the path of least resistance? Or if you are trying to bring a change within your organization or want your employees to get on board with a new initiative, think about the various hurdles on their path to adoption.
Changing people’s behavior should be for their good and for the betterment of our society. Hence, I will leave you Richar Thaler’s quote “Nudge for good.”
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Invisible Asymptotes (Must Read) : http://www.eugenewei.com/blog/2018/5/21/invisible-asymptotes
Amazon Dash buttons