In a recent North American study on brand trust, we found that when people trust a brand, 78% will give its new products and services a chance.
Why is this statistic important? Because according to Prof. Gerald Zaltman, “approximately 80% of all new products or services fail within six months or fall significantly short of forecasted profits.”
Reducing new product risk
New products and services involve risk. They involve risk for companies who must develop and launch their new product or service, but they also involve risk for customers, who must gamble their salaries and satisfaction on the promise of something new. According to the innovation expert Robert Cooper, success is all about managing this risk, in fact, “if risk is to be managed successfully, the uncertainties of outcomes must be deliberately driven down as the stakes increase.”
This is where brand trust can play a role for companies and customers, because brand trust helps manage risk by reducing uncertainty. For example, the brand trust built by Apple, reduces the risk and uncertainty of buying a new MacBook Air. Similarly, the brand trust built by Google, reduces the risk and uncertainty for customers when they buy a new online advertising service.
Increasing new product success
When it comes to innovation, companies and customers have a lot in common; they both want something new, but neither of them wants to take a risk. This makes brand trust important, because when people trust a brand, 78% will give its new products and services a chance.
So if your company wants to improve its innovation success rate, or help prepare the market for innovation to come, perhaps you should start by building brand trust.
(If you'd like help measuring and building brand trust, give us a call).