Offer an Upgrade

THE OPPORTUNITY

Consumers try to make the most of their purchases. They use protective cases on their iPhones and dry clean their delicate sweaters. One study even found consumers will slow their shampoo usage when the bottle is half empty rather than full.

However, researchers have also found that this cautious behavior is abandoned when an appealing, improved product is available. Customers interested in the upgrade begin to act more carelessly with their current possessions – all to justify that new purchase.

The “upgrade effect” persists across numerous product categories from durable goods to hedonic – toothpastes, coffee mugs, perfumes, shampoos and sunglasses. This particular research also looked at individual iPhones and how often consumers tried to find their lost devices when an upgraded phone was made available.

THE APPLICATION

To start, you must have an enhanced version of the product instead of a mere replacement. A new and improved product formula, such as Colgate toothpaste with better whitening agent, is one approach. Make explicit comparisons about newly upgraded features or styles to simplify the evaluation process with consumers.

Next, help to reduce guilt of early replacements by launching products alongside offers to donate or recycle previous versions. This was studied in the paper with positive results.

Planned obsolescence (degrading performance over time, placing prominent expiration dates) can help consumers but carry risks. It’s easier to highlight ways in which their current product may no longer be sufficient for their needs. In one study, drawing attention to aesthetic damage was enough justification to clear the path for a replacement.

THE SOURCE

Bellezza, Silvia and Ackerman, Joshua and Gino, Francesca, ‘Be Careless with That!’ Availability of Product Upgrades Increases Cavalier Behavior Toward Possessions (April 6, 2015). Harvard Business School NOM Unit Working Paper No. 15-077