Are your customers innovators, early majority or laggards?
In the 1908s it was realized that different people buy into products or services at different times, depending upon how new the offering is and their own psychological traits. Knowledge of how all this works is useful to us as business owners as it helps us with our marketing.
Studies indicated that the adoption of a new product/service was not uniform but followed a bell curve pattern, sub divided into 5 major discernible areas as follows:
A very small percentage of the population (2.5%), these people buy into the new product before most people have even heard of it. These people tend to be specialists in their field and so have little influence in the market.
A slightly larger group (13.5%); these people have more influence and are in some senses the trend setters. They make the rest of the market aware the product exists and through their trendiness start to influence the next group.
34% of the buying population so very influential – and profitable. This is where the product ‘explodes’ on to the scene and suddenly is everywhere, surrounded by a buzz of excitement.
Again, 34% of the buying population. By this stage the product or service is mainstream nearly everyone has one (literally) and so the excitement has largely passed and the offering is almost accepted as a normal part of life. You are more exceptional if you don’t have one.
These are the 16% of the buying population who only buy in at the last moment. By this stage the technology or concept is probably being replaced but only now do these conservative-minded people feel secure in embracing the offering.
That’s great, I hear you say, but so what? How does this help us to sell?
Well, first think about where your product is in the process. Is it something cutting edge or is it something that has been around for a while? That will help you to determine how you advertise your business and the products you sell. Marketing to an early adopter is very different to persuading a Laggard to invest in your offering.
It will also affect your pricing policy. Innovators and Early Adoptors tend not to think about price – they just want the new product – so you can sell at pretty much any price. The chances are that prices will be high anyway to overcome low production run costs (early video recorders and CD players were around $1000; now they are almost given away).
Finally, if you’re running your business properly you will already be thinking abut where your next product/service is coming from. Standing still (especially if you sell technology) is not an option so you need to be constantly on the look out for the next big thing.