Trust is the X-Factor in new product choice

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TRUST IS THE X-FACTOR IN NEW PRODUCT CHOICE
Family and friends more influential than experts in encouraging trial

The director of Australia’s Product of the Year awards says the independent consumer survey of 5,000 shoppers highlights two universal truths – customers aren’t stupid and trust is the key determinant in trialling a new product.

The households who determined the 2011 Product of the Year winners in 21 categories – incorporating all aspects of the grocery trade from food and beverages through to health, beauty and cleaning products – were also surveyed about their feelings toward product innovation and what influences purchasing decisions.

Product of the Year director Sarah Connelly says the research results were an eye-opener on many levels and she has a new appreciation for the companies who have been successful in gaining customer confidence for newly launched products.

“Regardless of the quality of a product, there are so many impediments to success,” Connelly said.

“One in three people surveyed were confused by the amount of choice available and two out of every three tended to try new products only if they were on promotion or part of a special offer.”

Marketers of new products have several other barriers to overcome, including a lack of trust and track record, whether the newcomer is as good as the incumbent and a perceived risk in trying new things.

“Consumers are keen on innovation – less than three per cent say they’re simply not interested in new things,” Connelly said. “It’s just that the sheer weight of new products can be confusing. We need to be wooed as well as well-informed. Endorsements from people we trust are also important.”

The survey found that the influence of third parties in decision-making is vital, but we place more emphasis on the opinion of a family member (62.2%) or friend (58.2%) than “an expert” (just 20.8%). In fact only 15.8% agreed with the notion that an endorsement from a well-known person results in more faith being put in the product.

“Consumers are becoming more selective and more savvy,” Connelly said. “They’re driven to try an unfamiliar product if it is genuinely new, from a trusted brand, convenient or meets a formerly unmet need. Shiny packaging isn’t the be-all and hype doesn’t cut it, the product has to have substance.

“Some forty-eight per cent said it is important to them that the products they choose are the best of their kind, so quality is vital.”

One of the highest positive responses revolved around product ranking. Some 68 per cent of those surveyed said it would be very helpful to know which new products were considered to be the best.

“New products lack a track record so consumers can’t simply Google for all the relevant info or jump into an online chat room for feedback. But they do want some sort of filter rather than trying everything themselves. That’s where a competition win or some form of quality seal can be hugely beneficial in delivering cut-through.

“Globally, Product of the Year winners have seen sales increases averaging ten to fifteen per cent, with some experiencing far higher increases not only for the winning product, but across their entire range.

“Some of our inaugural 2010 winners in Australia have reported increases of more than twenty per cent in product sales and twelve per cent across their brands as a result of communicating their win to consumers via advertising and on packaging.”

And the reward for making an immediate impression is impressive and easily quantifiable. Nearly 80% of respondents said they would recommend a new product to others if they tried and liked it. And almost 60% said they were prepared to pay more for a new product if they were satisfied with it.

“If you are to succeed in taking a product to market you have to tick all the boxes in terms of innovation, convenience, quality and, to a lesser extent, price. But to plough through the clutter, companies would be advised to get the product in peoples’ hands. Our research suggests they have to initiate a trial via sampling or special offer to prove their worth.

“From there, it’s a case of delivering what is promised and making a connection with the consumer. Brand loyalty counts for a lot. Nearly forty per cent of those surveyed said they prefer to stick with the products they normally buy. If companies can break through into that territory their new product has a better chance of evolving into a long-serving and trusted product.”

Top tips for a successful new product launch

• Inspire your customers – create a genuinely innovative product that delivers something new and useful.
• Initiate trial – via sampling or as part of a special offer.
• Stress trust – “comes to you via a trusted source” and “does what it promises”. Money-back guarantees can also promote a company’s faith in their products delivering on the promise.
• Highlight the product’s true benefits – “it will make your life easier”.
• Reward your fans – create a mechanism that encourages consumers to endorse the product to their friends and family.
• Stand out from the crowd – stress the success of the product in relation to its competitors – “this has been voted the best”.

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