We show that some customers, whom we call ‘Harbingers’ of failure, systematically purchase new products that flop. Their early adoption of a new product is a strong signal that a product will fail – the more they buy, the less likely the product will succeed. Firms can identify these customers either through past purchases of new products that failed, or through past purchases of existing products that few other customers purchase. We discuss how these insights can be readily incorporated into the new product development process. Our findings challenge the conventional wisdom that positive customer feedback is always a signal of future success.
Friday, July 10, 2015
Harbingers of Corporate Doom, or, Some People Just Have Strange Tastes
The latest from the economic literature: