Authors’ Note: This is Step 2 of the six-step Strategy Logic Chain within the PILA Reasoning Stack (Problem, Insight, Logic, and Assumptions). Step 1, the Value Proposition, defines the value a company intends to create. This article asks whether customers will change their behavior to realize that value.
Every year, companies launch products that are faster, cheaper, or more effective, and many of them still fail. When sales stall, teams usually blame the price, the messaging, or the execution. The cause is often more basic. The product requires customers to change the way they do things, and most customers do not want to change.
We call this the Product Superiority Delusion, the belief that a superior product will be chosen simply because it is superior. A superior product only creates potential value, and that value is realized only when customers adopt it. This is the reason Consumer Behavior (Adoption) comes immediately after Value Proposition in our Strategy Logic Chain:
Value Proposition → Consumer Behavior (Adoption) → Capability → Economic Drivers → Cost → Moat
The Value Proposition answers the question, “Why should the customer want this?” Consumer Behavior answers a second question, “Will the customer actually change to get it?”
The Incumbent Advantage and the 9x Perception Gap
Companies evaluate their offerings by features. Customers compare the benefits of changing with the familiarity and predictability of what they are already using.
In “Eager Sellers and Stony Buyers” (Harvard Business Review, 2006), John Gourville described a 9x effect, in which sellers overvalue their innovations while buyers place heavy weight on what they must give up. The exact ratio is not a universal law. The lesson is that sellers look at what the customer will gain, while buyers look at what they stand to lose. A product that is better but harder to adopt can lose to a product that is merely at par but requires little change in behavior.
Three Barriers That Kill “Better” Products
1. Status-Quo Advantage
Customers already have routines, standards, and investments in place. The Dvorak keyboard was designed to be more ergonomic, yet it never replaced QWERTY because the cost of retraining was greater than the possible gain in typing speed. A superior product has to beat the competitor and also the entire system that has grown around it.
2. Switching Friction
The cost of switching goes beyond price to include retraining, data migration, process redesign, and operational risk. Apple Pay lowered this friction by keeping the familiar tap at the contactless terminal and changing only the mechanism underneath.
3. The B2B Adoption Paradox
In B2B, the person who benefits is often not the person who bears the friction. A platform that promises executives a 30% efficiency gain can still fail if it doubles the data entry of frontline employees. Strategy must take into account who benefits, who decides, who implements, and who has to change.
Design for Adoption
The strategist must persuade customers to buy and also lower the behavioral friction they go through before they experience the value. One of the fastest ways to do this is to attach the new behavior to an existing routine.
When Grab launched Cash-in with Driver in the Philippines, commuters were able to add cash to their GrabPay wallet through their driver during the ride. GCash did something similar when it made payments part of everyday purchases from neighborhood merchants. In both cases, the company kept the existing trigger and reduced the friction.
The Adoption Ladder and the Reality Gate
Before management commits capital to capabilities, scale, or moats, it must first pass through what we call the Adoption Reality Gate, which uses a five-step adoption ladder:
Interest → Trial → Activation → Habit/Embedding → Expansion
- Interest (“I like the idea.”). Awareness and a positive attitude are not adoption.
- Trial (“I tried it.”). Trial shows curiosity, but it does not show commitment.
- Activation (“I experienced the promised value.”). The value the customer perceives is enough to overcome the friction of continuing.
- Habit/Embedding (“The new behavior has become my default.”). In consumer markets, this means repeated use. In B2B, it means that the product has become part of the workflow.
- Expansion (“I use it more broadly.”).Usage extends to other products, occasions, employees, or locations with little additional acquisition spending.
Diagnostic Drop-Off Analysis
The ladder also shows where adoption breaks down.
- When trial is high but activation is low, the problem is in the product or the onboarding.
- When activation is high but habit or embedding is low, the problem is friction or the lack of a trigger.
- When habit or embedding is high but expansion is low, the problem lies in the value or the scope of the offer.
Five Diagnostic Questions for Executive Management
- What specific behavior must change? Define the old behavior and the required new behavior.
- What does the change cost the customer? Calculate the cost in money, time, effort, learning, and organizational disruption.
- Who benefits, and who bears the friction? Map the beneficiary, the decision-maker, the implementer, and the daily user.
- Can the product be attached to an existing habit? Identify a routine, workflow, or trigger that can anchor the new behavior.
- What behavioral evidence proves adoption? Track trial, activation, habit or embedding, and expansion. Do not rely on awareness or stated preference.
Management should proceed when adoption has been demonstrated by actual behavior, redesign when friction blocks activation or embedding, and stop or rethink when customers cannot or will not change. A strong Value Proposition explains why a customer should want the product. Consumer Behavior determines whether the customer will change to get it. Until customers show this through their behavior, the strategy has not passed the Adoption Reality Gate.
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Josiah Go is a business thought leader, best-selling author, award-winning educator, entrepreneur, and independent director.
Chiqui Escareal-Go is an anthropologist, CEO of Mansmith and Fielders, and former chair of the Women Business Council of the Philippines.
Josiah Go will conduct a two-hour Strategy Logic Chain session for C-suite executives on November 11. For details, email info@mansmith.net.
