Knowledge Bank Blog, New Product Launches, Pricing & Promotions

Minimising the Risk of Trial

Are you making it easy for shoppers to trial your product?

Most of us are creatures of habit.  We find a comfort in doing the things that we always do, in the way that we always do them.  How many of you have a favourite restaurant?  And a favourite dish you typically order there?  How many of you order the same coffee every time you go into Starbucks?  By the way, if they are writing your order on the cup before you have started speaking you know you are either a creature of habit, or drinking too much coffee, or both.

Change is uncomfortable.  Whether it is a change of job or a change of baked beans brand, we all experience at least some initial discomfort.  Admittedly, a little less for the latter!

Why is this important?  Well, a lot of category growth models are reliant on change.  Getting shoppers to buy new products, often trading them up to higher value products.  In order to do this we have to offer great products, but crucially, we have to reassure shoppers that buying something different is a good and safe choice to make.

There are 3 potential risks, or costs, associated with any new purchase;

Financial Cost.  The risk of sunk money.  You buy a new product, you are not happy with it, you have wasted some money.

Opportunity Cost.  The product you could have bought instead.  This is particularly important in FMCG categories, where many shoppers have bought the same brand or product for many years.  If they are happy with their current product, change represents a higher opportunity cost.

Emotional Cost.  This is classic paradox of choice territory.  You have got past the first 2 risks and buy the new product.  Then you spend time questioning whether you made the right choice.

For any behaviour change to be successful, we have to help shoppers get past these costs.  Give them the confidence to trial new things.

So, how can we do this…?

Price & Promotion (Financial Cost).  Focus on tactics that minimise the financial outlay the shopper has to make.  This can be an initial price discount.  It could be a smaller, trial size.  It could be sampling, where the financial risk is zero.  The higher the ticket price of your product, the more important this is – £10 is a bigger financial risk than £1.

Proposition (Opportunity Cost).  Why is this product good?  Or better than what the shopper was currently buying?  You will have heard us talk about this a lot because we think it is so important, even more so, when you are trying to get shoppers to buy something new.  The shopper needs to be able to say to themselves ‘I bought this because…’.  If they can’t justify the purchase to themselves (or others) at the point of purchase, why would they buy something different to what they usually buy and trust?

Independent Endorsement (Emotional Cost).  Reassuring the shopper that they are making a good choice.  Often the best form of reassurance is what other people say.  Most of you who shop on Amazon will probably look at the star rating and a couple of reviews before buying something.  If the book got 5 stars, it must be good, right?  Endorsements from independent, credible sources are key.  Other shoppers are credible.  Industry sources like Which? are credible.  A particular magazine may be credible for your category.

We think Aldi have been the masters of utilising this in recent years.  They have made the absolute most of the awards and recommendations they have received.  This has been fundamental to building shopper confidence and trust.

Thousands of new products are launched each year.  Hundreds of categories have growth models that depend on changing shopper behaviour.  They all need shoppers to trial different products and then to buy regularly.  To get shoppers to trial, you need to minimise the actual or perceived risks of doing so.

Are you doing this in your categories, with your brands?

Have a great weekend and speak to you next week.