The “Competitive Intel” Episode 19 Transcript – Understanding the Technology Adoption Lifecycle

As a product or technology matures, the profile of a “new customer” changes, from the fast movers always on the bleeding edge, to the mainstream majority, to those that want tried-and-true commodity solutions. The Technology Adoption Lifecycle can be used as a competitive intelligence framework to illuminate how sales strategies should address those groups. In spite of the name, these concepts apply beyond technology. (In fact, they originated in a 1942 article about farm equipment.)

Phase 1: Innovators

The first customers are Innovators that look for products most people haven’t even heard of yet. Innovators can provide valuable feedback and insights about products that you have scarcely begun to offer to the public. At the same time, this group is very small (perhaps 2.5% of the eventual market), generally without much budget to spend. Therefore, too much focus on them is dangerous, and their importance may be largely as a stepping stone that influences the next group—the Early Adopters.

Phase 2: Early Adopters (aka, Visionaries)

A somewhat larger market segment (about 12.5%), Early Adopters demand breakthrough impact, and when they find it, they can lend a product credibility and start to generate revenue. They can be challenging to convince, and moreover, their influence tends to be limited to other Early Adopters. In fact, breaking through from this group to the broader audience of the Early Majority is the daunting divide referred to in the title of the book, Crossing the Chasm.

Phase 3: The Early Majority (aka, Pragmatists)

This group only wants to spend their time on technologies that work. Whereas Innovators and Early Adopters are happy to try an abandon many technologies, Pragmatists want something that they can likely stick with for quite some time. Because they are a large portion of the market (about 35%), succeeding here is critical to the success or failure of many products. These customers tend to respond well to case studies and other references that help show a solid benefit and a limited degree of uncertainty and risk. They also strongly influence each-other, but are skeptical of the views of Early Adopters and Innovators – feeling that these individuals often recommend something simply because it shows promise.

Phase 4: The Late Majority (aka, Conservatives)

Even more risk-averse than the Early Majority, but afraid of being left behind, are the Late Majority. Another large segment of the market (also around 35%), reaching this group can help lock in the success of a product or technology. The Late Majority tends to be quite price-conscious and to respond better to bundled packages of products and services than to point solutions. Volume sales to this group can extend a product’s reach and revenue, as well as firmly establishing it as a mature solution, paving the way for adoption by the last customer phase, the Laggards.

Phase 5: Laggards

After a product has been on the market for some time, the last 15% or so of the potential customer base comes into play
—the Laggards. This group demands well-established, commodity-priced solutions that carry little or no risk and that require no significant support. Laggards are often picking up a product for the very first time, when Innovators and

Visionaries have already moved on to what will become the next big thing. A product that’s selling mainly to Conservatives and Laggards is a product that’s ripe for disruption.

By Sean Campbell
By Scott Swigart