The amount of product adoption in the marketplace is regulated by the product’s cost benefit ratio. Which explains why Zoom and many other online services have seen a surge in paying customers and explosive growth during the COVID-19 pandemic. It’s because the perceived value of online services has changed and the benefit of using zoom, which includes avoiding the COVID virus, became massive compared to the cost or pain of using it.
The pandemic has also increased the product adoption of many other new, emerging technologies — blockchain, the internet of things, digital learning platforms, augmented reality, drones, 3D printing and much more. In each case, if you noticed an increase in product adoption, it’s because they protected people from COVID and yet allowed them to achieve some objective. This amplification of the benefit side of the cost-benefit ratio made the supplier’s job much easier.
COVID-19 changed the game for both new and existing products by elevating the benefit side of the equation…making the cost side less noticeable. Avoidance of catastrophic illness tends to be an exceptionally large benefit, so cost is almost irrelevant by comparison.
Pandemics and disasters (both natural and man-made) have always changed the cost-benefit equation. Take, for example, the great horse manure crisis of 1894. By the late 1800s, large cities all around the world were “drowning in horse manure.” For these cities to function, they were dependent on thousands of horses to transport both people and goods. New York City, for example, had a population of 150,000 horses producing around 2.5 million pounds of manure every day.
Horse manure and the remains of dead horses littered the streets and provided a breeding ground for billions of flies. These, in turn, spread diseases, elevating the problem from a nuisance to a public health crisis. The adoption of the automobile was dramatically accelerated (in large cities only!!) by the enormous benefits called “breathable air and walkable streets.” By 1912, cars outnumbered horses on the streets of NYC, and by 1917 the last horsecar was put out of commission.
COVID, and crises of all kinds, have a multiplier effect on the benefit side of the cost-benefit equation, which works to your advantage.
Cost Benefit Imbalance
In normal times, the success of a new or emerging product is often determined by the cost or pain the product imposes on the user. If customers are forced to substantially change their behavior to adopt a new product, then the perceived cost is higher. And when the cost is high, the associated benefits must also be high.
Examples of unbalanced cost-benefit ratios are everywhere. A new survey found that 64% of small businesses that use email marketing, do not employ CRMs like HubSpot or Salesforce or other automation tools. Which means they handle email manually.
Why this refusal to adopt CRM? The primary reason cited by respondents is: integrating a CRM system — and getting the staff acclimated to it — takes up “too many resources,” which means the cost is too high relative to the benefits received. The conclusion of the survey author was that small businesses are “making a mistake” by avoiding CRMs.
This is a classic example of ignoring the cost-benefit ratio of an entire product category. Rather than reduce the cost and/or pain of adoption, companies are focusing on marketing and promotion to try to boost the perception of benefits received. The best course of action would be to make CRM easier to adopt and use.