Bridging sales chasms
Bridging sales chasms faced during business devlopments.
In the adoption life cycle there are 5 different groups, the innovators, the early adopters, the early majority, the late majority and the laggards. Between each group there are metaphorical crack, which represents a disassociation between any of the groups. With this disassociation is meant that the groups will have difficulty accepting when the new product is presented in the exact same why as done with the groups to its immediate left. When there is a very large crack, it can be considered a chasm. This mostly occurs between the the early adopters and the early majority.
To understand the reasons for the chasm, the behaviours of the especially the early adopters and the early majority need to be identified. The early adopters are driven by a business goal, not a technical one. They want a big step forward in how their business operate with technology. You can also describe them as visionaries and very tech-savvy. The early majority are pragmatists, who care about the quality and the company they are buying from, the infrastructure of the supporting products and system interfaces. This group tend to communicate more with other people like themselves than compared to the early adopters. These pragmatists will therefore not buy you product and brand in established. Additionally, the early majority are more likely to buy products from a brand that has proven to be a market leader, since the products will have third party support systems.
One of the reasons is that the chasm occurs is that the two mentioned customers segments have separate social networks, which has limited flow between the 2 segments. Since the early majority heavily relies on recommendations within their industry and in their segment. When there is insufficient information or recommendations made to the early majority, the chasm will occur. Furthermore, the early adopters can be seen as superconsumers, meaning that they will buy the product for their technical abilities to reach a certain business goal, would like to contribute to the product, not matter the price. When this is done the product sales will take off. The chasm will occur because the early majority has different motives to buy the product, such explained in the previous paragraph. This can be increased when there is no dominant design. The dominant will lead to a market leader, which is a key buying point for the early majority, it will seem less risky. Whereas the early adopter don’t mind when there is no dominant design. Another possibility is that the marketing actions of the company cannot provide the incentives for the early majority to buy the product. For instance, a very high selling price can decrease sales for the early majority, leading to a chasm.
Moreover, the early majority can have an installed base, meaning that they are used to doing things a certain way, and are on the fence on changing this way. Whereas the early adopters will happily change system. Because of the installed base, the early majority will not buy the product in the same amounts as the early adopters, leading to the chasm. This is also the reason that the chasm mostly happens in the High Technology market. The customer can have an ‘a sunk cost’ since they have invested in technology and surrounding knowledge. Since the high technology market has various ‘radical or discontinuous innovation’, the change between the technology can be extremely big, making the installed base harder to overcome.
The marketing department can do multiple things to bridge the chasm. The department can try to understand the customer segments and what there motives are for buying products. They can try understand the networks in the segments and between the segments and find a way to make the 2 segments communicate. They can try to have a totally separate marketing strategy, especially in terms of promotion and pricing. For this, the company can make themselves more visible to the early majority, in combination with a skimming pricing strategy. It is also important that for the early majority the best solution possible is developed and not the best possible solution. Additionally, it is really important that the trade-off between quality and functional performance is communicates in a good way. The last option is to use a migration strategy when there is an installed base, and therefore educate the new possible customers about the product.
For the head-up display the chasm is not a problem anymore, since there is a current dominant design and the early majority has started to adopt the product. Additionally, the product has reached the process innovation stage, decreasing the selling price, and therefore making the trade-off between quality, functional ability and the cost less. Furthermore, the market also has many players, meaning that there is competition, giving the early majority the chance to see proposals and offerings before the decision making itself.