Reselling in Line With the Technology Adoption Curve

Sales and Marketing functions in technology-based product / service companies need to understand their customer base as related to the technology adoption curve and strategically plan their reselling activities around the concept.

You can download PDF version of this whitepaper here.

For every new product that comes out that can be considered ground-breaking or trend-setting, there is a pace at which customers acquire the given product. This concept, called the “technology adoption curve” is defined as the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups.

These adopter groups can generally be classified as follows:

Innovators: Wealthier clientele, seeking out and acquiring products as soon as they come out

Early Adopters: Young, well educated and market-savvy, with strong social networks

Early Majority: More conservative, wait for social acceptance of products before jumping on board

Late Majority: Older, less educated, fairly conservative and less socially active

Laggards: Very conservative, technology-shy, traditional

To put this concept into perspective by using an example, when Nintendo Wii was introduced into the marketplace, there was a major rush to purchase it. Those purchasing it on day one were the Innovators, standing in line to be the first to get their hands on the product. The Early Adopters likely purchased it over the first few months of its introduction, quickly sharing their experiences across their vast social networks. The product is likely now in the late stages of adoption by the Early Majority group, influenced by its social acceptance and spurred on by the satisfied Innovators and Early Adopters. In the coming year, the Late Majority will begin acquiring the product, and eventually, few, if any, laggard will join the frenzy.

For every product, the length of this cycle, as well as the percentage of customers who fall into each adopter group, varies. Some products gain immediate widespread acceptance across the marketplace, others take years to.

The purpose of this article is to bring attention to the relation between this adoption curve and reselling. Companies that are able to identify when exactly each of its specific customers purchased a given product or service in the past along the technology adoption curve can then target the same customers with one-to-one offers at the appropriate time along the next product or services’ technology adoption curve.

To be able to effectively resell along the technology adoption curve, a company needs three specific pieces of information around the product / service they are about to release:

  1. What the adoption curve for the given product / service will look like (based on similar products or services released in the past as well as sales projections, a company can hypothesize around this, and, accordingly, estimate sales over time periods).
  2. Which adoption group its existing customers fall into (again, matching customer purchase timing over the adoption curve of past similar products / services, a company can make assumptions regarding when each of these existing customers may purchase the new product / service).
  3. Customer contact information (critical, as no communication can be made, nor past purchases tracked, without it – loyalty programs, warranties, etc. are methods of obtaining such information for retail-based companies – service-based companies should likely have such information on hand).

With analysis around points 1 and 2 completed, a company would then need to devise a contact strategy around its ex-customers, matching the message and offer to the specific adoption group at the right time. The key point is to ensure that the potential for new sales to existing customers is maximized in as rapid and efficient a manner as possible.

A different tactic needs to be followed with each of the adopter groups. Some suggestions:

  • Customers in the innovator adopter group should be contacted even before the product or service is released, with offers of trial usage (the first to try it out), pre-ordering services, home delivery, etc. Capturing this trend-setting group’s imagination and interest early-on is the key here.
  • With the early adopters group, contact should be made with these customers soon after product / service release. Capturing as large a resell rate as possible to this group is critical – the social networks they influence can greatly impact future sales. To that end, offering discounts, value-added services, and free complementary gifts should be considered.
  • The early majority group is a segment of customers which will wait for general social acceptance of the given product / service, and as such, generally do not need to be contacted immediately. However, as this segment is much larger than the innovator or early adopters groups, their importance on the bottom line is significant. Thus, customized offers should be prepared to capture the interest of this group, focusing on the widespread usage and acceptance of the product / service, coupled with some exclusive benefit.
  • The late majority and laggards groups come into play usually years after a given product / service’s release. As such, the focus of such an effort should be minimal on these customer segments – predicting their purchase timing is extremely difficult, yielding low response rates.

Companies undertaking such efforts should be careful not to “cannibalize” sales – some early adopters and early adopters will make purchases on their own, with no contact / offer from the company required to trigger the sale. Accordingly, it is important to be careful not to contact customers who the company has already resold to.

Some examples of companies /sectors that stand to benefit the most from such an endeavor:

  • Technology Retailers – For example, selling a new version of a given Nokia phone the E71 – to past purchasers of the Nokia E70
  • Telecoms – For example, selling a new maximum capacity ADSL bandwidth speed service to those customers already subscribed to the current maximum capacity bandwidth service.
  • Banks – For example, selling a WAP-based service it is about to release to customers who are using its online banking services.
  • E-service Providers – For example, up-selling to-be released enrollment options offering added value or services to its customers based on their prior enrollment timing and behavior.

Such a concept can be used outside of the technology realm as well, applying to fashion, furniture, airlines, etc. – ultimately, analyzing customer purchase patterns around timing as it relates to any given product or service can greatly help a company in reselling similar new products / services to those same customers.

One final note – the output of such an undertaking should be reflected in the company’s segment-based strategies, in the behavioral dimensions of the customer, alongside his or her value and needs properties. Which segment your customers fall into along the technology adoption curve should be clearly defined, ensuring the information is used on an ongoing basis by segment managers.


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