Change usually involves some level of risk. Will a new product be better than the old one? Will a new initiative really save money? Research published in the Quarterly Journal of Economics by three University of Chicago researchers in 2006 found that there is an “uncertainty tax.” People in the study were willing to pay $26 for a $50 gift certificate, but when they were asked how much they’d pay for a lottery ticket that would win them either that same $50 gift card or a $100 one, they were only willing to pay $16, a 40% drop. The uncertainty made them undervalue something that was objectively worth more.
To ease uncertainty, lower the barrier to trial. Don’t just tell people that something is better; allow them to experience it themselves. In the mid-2000s, people didn’t understand cloud storage and worried that it would be difficult to use or that they would lose their work. So Dropbox became part of a vanguard of app firms giving away a version of their service for free. The appetizer helped people to resolve their uncertainty and encouraged them to pay to upgrade to a better version. It helped Dropbox to build a billion-dollar business.
Honda Motor Co.’s Acura division took a similar step in 2008. The luxury brand wasn’t as trusted or well-known as its rivals, so Acura partnered with the high-end W Hotel chain to offer guests a free ride anywhere in town in an Acura. Guests might not have known about or liked Acura, but if they needed a ride somewhere, why not get one for free? The rides removed uncertainty and, according to the company, resulted in tens of thousands of new Acura buyers.
Uncertainty can also be reduced by making things reversible. A few years ago, my girlfriend and I were considering getting a dog. A local shelter had an adorable pit mix puppy, but we weren’t sure we were ready. Would we be home enough? Could we give her enough exercise? There were too many unanswered questions. We started to leave, but then a nice volunteer interjected: “In case it helps, we have a two-week trial period.” Today that girlfriend is my wife, and our dog Zoë is an integral part of our family. The trial didn’t reduce the upfront costs of taking Zoë home—food, shots, a crate, etc.—but it did remove the uncertainty.
I quite agree with this and it’s the persuasive technique most likely to work with me, and has.
OTOH it can just as easily make it easier to sell someone a pig in a poke.
I’m still expecting that one day storing everything in the cloud without backups will be the tech equivalent of cutting costs by moving all pharmaceutical production to Asia.
I’ve experienced a lot more network problems than I ever have hard drive failure.