The Customer Adoption Challenge
Companies taking new innovative products and services to market need to understand how customers adopt them, especially where the form and functionality of the product or service is new and different.
This adoption behaviour applies at Product Level, not at a Company level, which can sometimes create challenges for multi-product companies, and it is usually more important than customer typology in determining market take-up.
Over the last fifty years, conventional ‘orthodoxy’ about customer adoption has been driven by the Rogers Model, which defined 5 different categories of adopter. This model was based on a simple theoretical construct based on diffusion-driven growth where the level of innovation remains constant over the product life-cycle. This resulted in the familiar definitions of five categories of adopters based on standard deviations from the mean or average behaviour: innovators, early adopters, early majority, late majority, and laggards.
Sadly, in spite of the widespread use of this approach, it is not supported by any robust empirical data, and has led to spurious decision-making. The data-driven Triple Chasm Approach tells us that there are three distinct customer adopter categories, which reflect what it takes to cross each of the 3 Chasms. These different adopter categories, based on different customer behaviours can be defined as follows:
Proto-customers who test post-Chasm I prototypes and provide interactive feedback on the proposed shape and functionality; they do not typically pay for the product or service but may contribute financially
Charter Customers who verify the shape, functionality and usability of the product or service; they enable pricing elasticity to be explored, leading to the creation of a viable business model – the key step in crossing Chasm II
Mainstream Customers who are the principal revenue generators for any product or service; they kick in only after the product or service functionality, packaging, pricing and business model have been firmly established in crossing Chasm III
The key to successful commercialisation is to understand this adoption behaviour, irrespective of the type of customer being targeted (consumers, businesses, governments or knowledge and affinity-centric workers) - in particular the different behaviour of proto vs charter customers, which is critical early stages of the commercialisation journey.