HOW TO CROSS THE CHASM
Ever waited in line all night to get your hands on the latest iPhone or PlayStation? Or are you more of a casual consumer, buying technology products when needs must? Whatever category you fall into, tech brands know you well, and they’ve spent decades figuring out how to reel you in.
In Crossing the Chasm, author and consultant Geoffrey Moore explores how tech companies transition from early adopters to the mainstream market. These key audiences have different wants and needs regarding technology products. Appealing to all stages is anything but a smooth process, and the chasm between them is often where technology brands fail.
Moore believes it’s all in the strategy. In order to cross this giant chasm, companies must target each marketable population with different strategies. They’re not the same, so why treat them as one?
WHAT IS THE CHASM?
There are many names to describe the chasm, but essentially it refers to the point where something has stopped working in your company after initial success. It’s the point where you’re looking for new ideas to take the business to the next level.
Moore uses the “Product Adoption Lifecycle” to explain a company’s target market and the role of the chasm.
Everything we buy has a lifecycle, with its length of use determined by the type of person who owns the product. Innovative technological products take time to catch on with any community. The adoption process tends to happen in stages, one group at a time.
Broadly speaking, Moore breaks down tech consumers into five different categories:
Tech is a central interest in life for this group; they want the latest new tech before everyone else, even if it’s still ridden with bugs.
2) Early Adopters:
Early adopters are interested in the strategic competitive advantage tech can provide rather than the technology itself.
3) Early Majority:
This group makes up one-third of the market and is looking for incremental benefits rather than big changes. The Early Majority are some of the most loyal customers.
4) Late Majority:
The Late Majority is suspicious of high tech and wants simple, high-quality, low-cost products with no hassle involved.
A high-tech resistant group who are typically ignored as a customer segment but can provide valuable feedback on how a product is failing to meet their expectations.
You can condense these five categories into two broad sections: those first in line (Innovators and Early Adopters) and the Casual Consumer (Early and Late Majority, as well as Laggards).
Moore notes that it’s between Early Adopters and the Early Majority where a chasm exists - and products often languish - leading a company to fail because it can’t quite move between the two markets.
LOST IN TRANSITION
In an ideal world, each group of customers would offer a reference point for selling to the next, with tech brands able to learn from each consumer segment. This allows products to sustain momentum, ready for the not-quite-so-eager folks that follow. It is, in essence, the “Technology Adoption Lifecycle” working in full effect.
Moore argues that this model works, curving left to right and focusing first on the Innovators before moving on to the Early Adopters and then the majority. For this reason, the endorsement of Innovators becomes essential for developing a credible pitch for the next customer base.
This is also where the chasm can rear its head. Innovators and Early Adopters share common interests, but there’s a disparity when moving from the Early Adopter stage to the overall majority.
That majority can also be known as Pragmatists. This group is typically only willing to adopt a tech product when another user from the majority recommends it. But because they all wait for each other to go first, brands are left stuck - unable to transition to the broader market.
Jeff Miller took over the reins of Documentum in 1993, after the company had gone three years with flat revenues in the $2 million range. Innovators were using the product – an electronic document management system (EDMS) - but the firm had yet to breach into the mainstream. It was a classic example of a business falling into a chasm.
But then something clicked when Jeff came on board – Documentum’s revenues increased to $8 million, $25m, $45m (and an IPO) and then to $75m.
Jeff and his team crossed the chasm, using the original edition of the very book this article is based on as their market development blueprint.
Documentum followed the core steps of Crossing the Chasm, outlined by Moore:
Choosing a target market
Understanding the whole product concept
Positioning the product for that target market
Building a marketing strategy
Selecting the most appropriate distribution channel
Deciding on proper pricing
Essentially, Documentum secured a ‘beachhead’, which is to say it targeted a specific market niche within the Early Majority group to cross the chasm and become the undisputed leader. From there, it expanded into other segments until it essentially dominated the entire market.
THE FIRST NICHE
Targeting a specific niche is key to crossing the chasm, and it should be the first point of attack, according to Moore.
Entering the mainstream market is an act of aggression against existing players’ territory. Moore argues that you should plan your attack the same way you would a military invasion.
Again, this requires you to secure the ‘beachhead’ by finding the segment in ‘the most pain’. Landing on a segment with a painful problem that Early Adopters want to solve means they won’t spend so much time worrying about incremental benefits. They just want the pain to go away.
From here, the goal is to dominate the specific niche so you can move into other markets with a better understanding, albeit a different strategy.
Choosing the right target niche involves making risky decisions devoid of reliable information. It requires you to develop several scenarios where various customers might use your product. You consider the buyer - the end-user - and how the product would improve the customer’s current situation.
Doing so helps you come up with a variety of potential customers that you can compare to find the customer segment with the most compelling reason to buy your product.
Once a company understands the Technology Adoption Lifecycle, defines its target market and the differences in consumers, provides a whole product and researches its competition, it’s ready to move between markets and safeguard itself from falling into the chasm.
Despite its release more than three decades ago, Moore’s book has stood the test of time. In 2006, the director of the Stanford Technology Ventures Program, said it’s ‘still the bible for entrepreneurial marketing’.
Today, Crossing the Chasm is still regarded as one of the defining marketing books of our time and is helping both B2B and B2C businesses to cross the chasm or - even better - avoid it altogether.