How Do You Convince Your Customers To Fall In Love With Something New?

Intuit CEO Brad Smith pulls up a chair with Fast Company writer Austin Carr to discuss consumer behavior and the future of wallets. Take a look and then let us know: Do you buy this?

It's a common problem in business: You've got the next great idea, but you don't want to alienate your loyal customer base.

It's also one that Brad Smith, CEO of software company Intuit (think TurboTax, QuickBooks, and Mint) faces every day.

"I have this famous joke that I use," Smith says. "Why was God able to create heaven and earth in seven days and seven nights?"

"Because he didn't have installed customers and legacy technology to worry about."

Joking aside, Smith says, it's one of the most delicate, and fun, parts of developing new products.

"How do you actually move an existing group of customers from what they fell in love with to the next thing that could be great?" he says. "That takes a lot of finesse. For 30 years we've been trying to work our way through that, and every day it's a big challenge but it's a lot of excitement."

One such challenge is the introduction of near field communication technology (NFC) for financial transactions. Why carry a wallet, when you can simply tap your cellphone to make a payment?

It's a good bet that the technology will revolutionize our experiences at the register in years to come, but consumers still need to be persuaded to change their old habits and accept new methods. The difficulty, according to Smith, is that the new technology (say, swiping your phone against a sensor) differs only slightly from the physical movement of using a credit card or forking over some cash.

With so much similarity, consumers may not be prone to adopt the technology immediately. In Smith's mind, the answer is to provide an incentive.

"These new wallets are pretty much asking you to do the same thing, and that's not going to change your behavior," he says. "I think the next step is what you can do with the actual data and information—give me a chance to save more money, let me know when someone has a promotion on something that I typically buy."

Or maybe incentive isn't the answer, and only time will tell the method that persuades consumers to make the shift.

"I think it's the wild wild west right now," Smith says. "There's so many different ways of doing it, and the person who can nail getting the consumer excited about it, is the person who's going to win."

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4 Comments

  • KH

    What's missing is investigation and insight development as to why consumers might discover that it actually a better way to pay. For example, consumers might want to ditch their wallets altogether and just carry their phone. Starbucks is already using this payment technology very well through their loyalty card.

  • L. Mohan Arun

    isn't ANYTHING new and innovative almost always perceived
    to be a bit "out there" when it's first rolled out?  But sooner or
    later if it WORKS, people catch on, right?

    That's most definitely the case most of the time.

  • Anthony Reardon

     
    Right on Miles,
     
    I think Brad is spot on. What I would say to him is- the key is superior market intimacy. If you have a real close relationship with your customers, then you can leverage that into influence.
     
    For instance, if you follow up more directly and stay connected more closely with users of your product line, you can establish a relationship that leads to voluntary cooperation. Installed customers and legacy technology can otherwise be embedded patterns that are hard to break from. However, if you are involved with them to whatever degree your products and services are a solution to their needs in order to make that sale, then stay involved with them as a partner through the lifecycle. You can find out what works and what doesn't, engaging them in the process of improvements, and thus having buy-in for the next series. You also get the excuse to present new opportunities to them.
     
    So NFC is a perfect example. I totally agree with the problem of differentiating that tool from other established forms of transaction. I also agree the solution is to excite customers what they can do with the data and information. This too requires extending superior market intimacy through vendor clients to their own customers.  
     
    Case in point, I was watching an episode of Hell's Kitchen where the chef created an incentive system to get the waitresses to try to sell one of each item on the menu. As they are often asked what they recommend or are in a position to propose at the order point, they can address the problem of imbalanced inventory- making sure that all food stock gets used same day/ eliminating waste. I thought to myself, you can do the same kind of thing via device. In fact, you can pass on some of the improved profitability to incentivize purchasing behavior near real-time. You know- specials on things that need help moving, or group discounts off bulk supply ordering. NFC transactions are right there with device, can improve efficiency in everything from labor to accounting with the POS, and so can be offered as a payment option that discounts final price even lower.
     
    Best, Anthony