Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customersby Geoffrey A. Moore
Crossing the Chasm is a book that equips readers with the essential knowledge and effective tools required to successfully nail the marketing and sales of high-tech products. It comprehensively explains the different stages of the technology adoption cycle and how to identify the right customers for your products. It also provides a step-by-step guide to creating a winning marketing and sales plan for high-tech products so that mainstream customers will be attracted to them, increasing your chances of success!
The Technology Adoption Life Cycle
The Technology Adoption Life Cycle is a model that explains how new technologies are adopted by different groups within a community. It suggests that the adoption process occurs in stages that align with the psychological and social characteristics of these groups. By understanding this model and identifying which group you belong to, you can effectively plan and navigate the adoption of new technologies.
The model divides the community into five distinct groups:
- Innovators: Innovators are the first group to embrace new technologies. They possess an innate curiosity for the latest advancements and are driven by the sheer desire to explore and experiment with technology. Although they represent a small percentage of the population, their influence is substantial in shaping perceptions and driving early adoption.
- Early Adopters: Early adopters are the ones who jump on the tech bandwagon right after the innovators. They're not necessarily tech experts, but they have a knack for understanding the benefits of new technology. They can see how it fits into their lives and solves their problems. Early adopters trust their gut feelings and don't rely on other people's opinions. They play a crucial role in paving the way for new tech on the market.
- Early majority: The early majority group shares some similarities with the early adopters in terms of their ability to understand technology. However, their decision-making is primarily driven by practicality. They recognize that not all novel inventions stand the test of time, so they prefer to observe and evaluate how others are faring before committing to adoption themselves. They rely on the experiences and recommendations of others who have already adopted the technology. This group comprises about one-third of the total population. So winning them over is important for any tech company's success.
- Late majority: Similar to the early majority, the late majority group also prioritizes practicality, but they're a bit less confident than the early majority when it comes to handling a technology product. They want to see that it's become a standard first before they even consider using it. They need lots of reassurance and support, so they often stick to well-established companies that have a track record. The late majority also makes up around one-third of the population. While profit margins may decrease as the technology becomes more common, the late majority can still be a profitable market to target due to lower selling costs.
- Laggards: Laggards, in contrast to the other groups, exhibit little to no interest in new technology for various reasons. Laggards only adopt technological products when they are seamlessly integrated into other goods or services, often without their awareness. From a business perspective, it's usually not worth chasing after laggards because they're not interested in adopting new technology.
Actions to take
High-Tech Marketing Enlightenment
High-tech marketing enlightenment is a comprehensive approach to marketing that emphasizes understanding the needs of customers and tailoring products to meet those needs. This concept recognizes that the customer should be at the forefront of the marketing process, guiding the development and promotion of products.
To thrive in this economy, it is essential to understand how high-tech markets evolve. The saying "first there is a market, then there is no market, and then there is" encapsulates the dynamic nature of these markets. It highlights the different stages that a market typically goes through as a new technology or product is introduced.
During the initial phase, "first there is a market," early adopters and innovators eagerly adopt new technologies, forming a niche market. However, this is followed by a temporary lull, the "then there is no market" phase, during which growth may appear stagnant due to limited awareness or skepticism from mainstream consumers.
Finally, the "there then is" phase arrives, where the market experiences a resurgence and substantial growth, leading to the emergence of a broader mainstream audience consisting of both the early and late majority. It is within this phase that real opportunities for wealth and expansion arise.
To capitalize on this mainstream market, it is important to focus on the dominant adoption type in the current phase. Get to know the psychographics of that segment and adjust your marketing strategy accordingly.
Actions to take
Crossing the Chasm by Providing a Whole Product
Crossing the chasm refers to the difficult process that companies often encounter when transitioning from an early market to a mainstream market. This transition involves moving from a small customer base to a larger target market segment, which is crucial for long-term success.
To successfully cross the chasm, companies need to allocate significant resources to a specific market niche and use it as a solid foundation for broader operations.
The key to successfully crossing the chasm is providing customers with the "whole product." This means going beyond just selling your product and actually delivering a complete solution that meets the needs of your customers. You don't want to be all about sales and end up disappointing your customers. That's a recipe for disaster and will keep you stuck in the chasm for longer!
It is important to understand that word of mouth plays an essential role in shaping buyers' perceptions and influencing their purchasing decisions. Therefore, companies must ensure that their initial set of customers are so satisfied that they can't stop telling others about their product or service. That positive word of mouth is what will attract more customers and help you cross the chasm successfully.
Actions to take
Targeting Your Niche Market for a Leadership Position
When it comes to making decisions with limited data, such as targeting a specific niche market, market segmentation can be a useful tool.
Market segmentation involves evaluating different segments to determine their attractiveness and narrowing down the options to a few final targets. This process helps gain insights into the market's size, accessibility for distribution, and level of competition. By selecting one target segment, you can concentrate your resources on achieving a dominant leadership position within that segment quickly.
To help you understand your customers better, target customer characterization is the key. This involves creating detailed customer profiles to guide marketing strategies. By developing comprehensive characterizations for each type of customer and their specific product applications, businesses can form vivid depictions of customers and their unique needs. This approach facilitates the development of highly responsive strategies tailored to effectively address those needs.
Actions to take
Dominating the Market
When a disruptive innovation is introduced into the market, the process of marketing it effectively involves a strategic battle that unfolds in different stages.
Initially, the focus is on the generic product, which refers to the actual physical product that is delivered to customers and is covered by the purchasing contract. However, as the market evolves and matures, the marketing battle shifts towards other aspects of the product, represented by the outer circles of the marketing strategy.
The first circle beyond the generic product is the expected product. This refers to the minimum set of features, functionalities, and services that are necessary for the product to have any chance of being successful in the market.
Then, we move on to the augmented product. The augmented product goes beyond the basic expectations of customers and provides additional features, services, or enhancements that increase the chances of success in the market. It aims to deliver an improved and more comprehensive user experience compared to competitors. The augmented product is designed to exceed customer expectations and create a competitive advantage.
Finally, we have the potential product, which represents the future growth and expansion possibilities of the product. It takes into account the development of ancillary products or complementary offerings that can enhance the overall value and utility of the core product. Additionally, the potential product acknowledges the customization and personalization options that can be added to meet specific customer needs and preferences.
Developing a market domination strategy requires comprehensive whole-product planning. Technology enthusiasts enjoy creating a whole product that satisfies their desires, while visionaries and pragmatists prefer products with a complete support system. To overcome the challenges and bridge the gap, one must address the demands of the pragmatists and provide a whole product that ensures target customers can fulfill their compelling reasons to make a purchase.