Latest Isn’t Always Greatest: Why Product Updates Capture Consumers
Well, not necessarily.
When presented with this exact scenario in an experiment, most people did indeed choose the longer stick, whereas only 15 percent initially chose the shorter one. However, when the short version was labeled as “newer,” twice as many, about 31 percent, chose it—even though all of the other product information remained the same. Why? Because consumers gravitate to merchandise labeled as “updated,” even if the items are not necessarily improved, according to the results.
“ONCE SOMETHING SAYS ‘REVISED’ ON IT, IT MAKES YOU SUSPEND CRITICAL JUDGMENT.”
“After showing people a product labeled as revised, they assume that it is necessarily better,” says Ximena Garcia-Rada, a former Harvard Business School doctoral student who is now an assistant professor at Texas A&M University. “We see a significant proportion of participants shift to the objectively inferior product when merely labeled as revised, even though it is described exactly the same way.”
Garcia-Rada is lead author on a new working paper about the study, co-written with Leslie John, the James E. Burke Professor of Business Administration at HBS, and Michael Norton, the Harold M. Brierley Professor of Business Administration at HBS, along with Ed O’Brien, an associate professor at the University of Chicago.
Consumers put on blindfolds
The researchers performed dozens of experiments, using products ranging from gummy candy to dictionaries, and testing out labels such as “newer version,” “updated edition,” and “revised product.” In each case they found the same thing: A significant percentage of customers preferred the revamped product, even if it was identical or worse than an unchanged counterpart.
In one study, the researchers asked participants to sample two gummy candies, and they randomly varied which gummy was labeled as updated. “They’re eating gummies, and they’re like, ‘Oh, it’s the revised gummy, yum yum, it tastes better,’” says John. In another study in which participants played a video game labeled as “version 5,” they even reported enjoying the game more and experiencing fewer bugs than those who played the exact same game labeled as “version 2.”
“Once something says ‘revised’ on it, it makes you suspend critical judgment,” says John. “It’s like you put on a veil or a blindfold, and then just subsequently don’t scrutinize at all. You just accept it must be better.”
The researchers have gathered evidence supporting that idea, showing that the less time they gave people to examine a choice, the more likely they were to go for the newer option. “When you are under time pressure, you are even less likely to scrutinize the options, and particularly likely to take the revised label at face value,” John says.
This happens because consumers are using an imperfect shortcut to make a decision, which makes them more susceptible to inferring that altered products are better, even in situations when this is not true. “It operates in this zone where there is some kind of uncertainty as to whether something is good or not.”
In another study, they found that when people were less familiar with a product category, they were also less likely to scrutinize the reworked version and instead assumed it was better. On the other hand, when they did have more expertise in the product category, they were more likely to override the “revised” label and considered more objective attributes. “In that case, they are more of a connoisseur and understand the nuts and bolts, so they can realize whether something is a substantive change or not,” says John. “They are not blindfolded anymore.”
Updated is not always better
Additional research suggests that marketers are well aware of the power of calling something “revised” as a means of selling products. A survey conducted by the researchers with former working professionals found that nearly half had worked at a company that had released a supposedly upgraded version of a product with no objective improvement.
This research has important implications for marketers; for example, in cases where a product is genuinely changed, it behooves the company to “shout it from the mountain top,” John says. “That label is very powerful, and you should really make it clear to customers.” However, the research team is not suggesting that marketers slap “revised” labels onto products when those products are not in fact substantively different.
On the consumer side, the research suggests that buyers should beware the easy shortcut of purchasing a renewed product—especially if it means paying more money for something that’s just assumed to be better. Rather, they should look for cues that can tell them whether an updated product is objectively better.
“Maybe take a moment instead to carefully evaluate the options,” says Garcia-Rada. “If you are not an expert, get an opinion from someone who is—especially if it’s a consequential purchase.” By following those practices, consumers should be able to tell if when they are buying something “revised” whether it is, in fact, improved.
This Article originally appeared in Harvard Business working Knowledge December 2022 edition.