For over fifty years, researchers have used the Technology Adoption Life Cycle model to explain the adoption of new products and technologies. The process of adoption is illustrated by a classic bell curve, divided into four consecutive stages. Each stage is defined by the customers that adopt the technology in the respective stage: early adopter, early majority, late majority and laggard.
Geoffrey Moore, in his book Crossing the Chasm, was the first to identify the chasm between the early adopters and the early majority customers when dealing with discontinuous or disruptive innovations.
The early market is characterized by visionary customers who have a passion for introducing new technologies to seek competitive advantage. These visionaries are willing to accept the risks involved with new technologies and are often willing to devote considerable resources to working with the early product. These early adopters have a clear understanding of the problem that they intend to solve with the new technology and they need little help from vendors in developing the ROI.
In contrast, the early majority customers, or pragmatists, are more risk adverse. They want to be early into the market, but only after the technology has been proven by others. They need to see a clear ROI, and will look to their industry peers, who have experience with the technology for validation. They are more demanding that all components be completed and fully integrated, so as to minimize their own resource investment in implementing the new technology.
So, why is there a chasm? In short, the vendor has not yet created the conditions necessary for adoption by the early majority customers - who remain unconvinced. On the other hand, many of the visionaries have purchased, and there are not enough remaining visionaries to sustain market growth.
It is not uncommon for a new technology to take several years to cross the chasm, and in many cases, the chasm is never breached. Retail bar code scanning is a case in point. From the initial supermarket pilot, it took almost a decade to achieve broad market acceptance. Many factors needed to come together to form the compelling ROI required by retailers, including a UPC (Universal Product Code) standard and governing body to assign UPC codes, product marking by a majority of consumer goods suppliers, point of sale system integration, improvements in scanner throughput, reliability and scanner cost reductions. The improvement in system pricing accuracy and was also a contributor, as this allowed for cost savings from individual item price removal.
Another example is the pen computer industry. Momenta, and a host of other first generation pen computer companies failed to cross the chasm in the early 1990's and ultimately went out of business. These early products were expensive, bulky, and suffered from limited battery life and poor handwriting recognition software. Many years later, more focused products with a pen user interface, such as the Palm Pilot, Palm Treo, and a variety of Microsoft Pocket PC/Windows Mobile powered devices succeeded in crossing the chasm. In addition, full size Tablet PCs are now crossing the chasm, with success in vertical markets such as healthcare, insurance and real estate.
These examples give clues to the strategies needed to cross the chasm. Pragmatists require a complete solution, with minimum reliance on their own limited resources for implementation and little risk that the ROI will be achieved. Therefore, the key requirement to achieve the chasm crossing, is what Moore refers to as the "whole product solution." Building a whole product solution requires that all components are in place and fully integrated for the customer's environment, including hardware and applicable software with all critical features available, system integrations, pre and post sale support and related services. The product/system must be demonstrable with plenty of favorable references for validation.
Strategies that are essential for building the whole product solution and crossing the chasm are:
1. Reduction in Scope (Niche Marketing)
It is better to focus resources on one target market and achieve a whole product solution, rather than work on a number of target markets and have 80% of what is needed in each market to cross the chasm. Focusing on a single niche gives the resource team a realistic opportunity to identify and develop the feature requirements, services and other components required to succeed in the targeted market. The narrow focus also allows initial installations to more easily serve as reference accounts for others in the targeted market and facilitates word of mouth marketing.
2. Quickly Capture the Lead Market Share
Pragmatists want to improve their odds by working with the market leader and choosing the technologies/products that are most likely to become industry standards. In fact, their risk aversion often cause pragmatists to develop a "herd mentality" in support of the market leader or emerging industry standard. It is therefore important to capture the market leadership position during the early market, as this will help to ensure the leading position as the market achieves mainstream volumes.
3. Alliances
The building of a "whole product solution" could require alliances with providers of content, technology, software, or services such as contract manufacturing, installation or repair services. Often outsourcing part of the solution to a partner will be a faster and more cost effective way to get to market, while maintaining ownership over the core or higher value activities. Partnerships may also be used to build or strengthen sales channels.
4. Marketing Support
Marketing materials that will be beneficial in moving the pragmatists/early majority customers forward will be case studies (written and video), solution briefs, ROI examples/business cases, and a list of positive reference accounts. The company should focus on building awareness in the targeted market through trade show exhibiting and frequent marketing communication (newsletters, eBlasts, webinars, etc.) Areas of market leadership and major wins should be highlighted as this should have the desired impact with the early majority customers.
Michael Kapp has 20 years of high tech product marketing and product management experience and is currently VP of Marketing and Product Management for Control Solutions, a leading supplier of Enterprise Mobility Solutions and Automatic Identification equipment. Visit Michael Kapp's blog at http://www.productstrategy.net for more articles on marketing and product management.
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