Forget The Early Adopters: Gadget Companies Should Target The Late Leapfroggers

Innovation

from the skip-a-generation-or-two dept

Clive Thompson shows, once again, why his articles and columns tend to be fascinating must-reads. He’s written up some details of some research suggesting gadget makers rethink their marketing strategy of going after early adopters, and instead, consider targeting late adopters. Now that might sound counterintuitive at first. Getting early adopters helps build buzz and then word of mouth passes down the chain to everyone else under the curve, right? Not quite. What the research shows is that “late adopters” are often so late that they never adopt certain generations of a technology. But, when they do “upgrade” they’ll upgrade to the latest. So they basically “leapfrog.”

[Jacob] Goldenberg offers the following thought experiment. Imagine that John is a laggard who buys a Walkman and listens to it while he jogs every day. Eventually, the Discman comes along, but John doesn’t upgrade because he doesn’t see anything wrong with his Walkman and doesn’t want to re-buy his music on CD. Then MiniDisc players come along, but John still holds on to his Walkman. Then, 16 years after he bought his portable tape deck, MP3 players become the hot new thing.

By now, though, John is finally starting to feel self-conscious about his huge, bulky Walkman, and maybe it’s starting to break down. He’s finally ready to buy a new music player, so he becomes–ironically–one of the first people to get an iPod.

The research shows that this is often the case. The folks normally considered “late adopters” skip multiple generations, but when they upgrade, they upgrade to the latest and greatest, and are often among the first buyers of those devices, often planning to hang onto them for another few generations. Amusingly, as I thought about this, I realized that this actually describes me! For example, I tend to keep mobile phones for four or five years before upgrading, but when I do upgrade, I get something pretty new and snazzy and then use it until I’m almost embarrassed to show it (“wait, you write for a tech blog with that phone?” has been said to me more than once). Same with other gadgets as well. I have an ancient mp3 player and no intention of upgrading. I had the same super bulky and not very good digital camera for seven years before I recently bought a brand new one that puts the old one to shame.

The research then suggests that targeting those “late leapfroggers” rather than the early adopters can actually do quite a bit for the bottom line:

Goldenberg argues that the economic impact of leapfrogging laggards is huge. By his calculations, if only 10 percent of laggards leapfrog, their purchases can drive profits from a new gadget 89 percent higher than they would be without leapfrogging. “And that can be the difference between succeeding and not succeeding,” he says.

If Goldenberg is right, marketers have made a colossal error by snubbing laggards. Instead, they ought to be frantically figuring out how to market to them. After all, early adopters don’t need much convincing. But if you can figure out how to tip just 1 percent of laggards into the “buy” category, the upside is huge. What’s more, Goldenberg thinks word-of-mouth recommendations from laggards are supremely persuasive: If John can handle that new gizmo, anyone can, right?

Thompson then wonders if some of this is driving the early sales success of the iPads. Sure, early adopters are buying it, but for some “laggards” who never bought a smartphone or a laptop, perhaps it’s a reasonable buy? I’m not completely convinced that’s the case, but it’s an interesting theory. Would love to see some actual data on how many iPad buyers didn’t already have a smartphone or a laptop.

That said, this story got me thinking about a concept that I’ve been pondering lately, which often explains why people have so much trouble understanding certain aspects of trends: it’s because people have difficultly conceptualizing dynamic markets as an ongoing connected process, but instead, automatically think of them as an encapsulated unit. If you look at any product totally in isolation, the normal “adoption curve” that Geoffrey Moore built his career on makes sense.

It assumes an orderly progression from beginning to end, with your typical bell curve. But that assumes that each product is a market unto itself, without impact from additional innovations and newer products. That’s not the case at all. Many of the “late adopters” never actually get around to adopting, and when they adopt, they may have jumped up onto another, higher curve, rather than coming down the back end of the adoption bell curve. Recognizing such dynamic market forces isn’t always easy to do, and it’s a huge reason why people sometimes have such difficulty predicting market trends.

Filed Under: early adopters, late adopters, leapfrog, marketing