adoption rate strategy



by jenks

late-adopter strategy

like a true teenage product of the 90’s i blame video games.

last week i caught the tail end of an npr bit about the nintendo wii which mentioned that the console was currently outselling both sony’s playstation and microsoft’s xbox combined. the explanation for this seems to be that because of its uniquely simple controller the wii is able to appeal to a much broader audience than the other more complicated consoles. the implications of that on the dynamics of adoption is what’s inspired this recent investigation on the subject.

about a year and a half ago i was busily dashing all over L.A. on a quest for sneakerheads. while scouring undefeated, kicks, sportieLA, kendo, greyone, and generally cruising melrose ave. like a freakin pimp (in the traditional sense of the word), i was actually on a black ops consumer insight mission. i was working with an agency that was preparing to pitch pony, and so we wanted to glean from these kicks connoisseurs info on the current state of shoedom. now, sneakerheads are folks with an average of like, oh…. say 80-180 pairs of sneakers (i don’t know if maybe you do, but i don’t think i own 180 pairs of anything), and i was on a quest to find these experts and offer them the opportunity to get to talk about their #1 favorite subject: shoez.

yet uniquely suited to aiding and abetting the process of marketing research with their undisputed ability to distill meaningful patterns out of that which to the layperson is just chaos, though they may be, these kinds of experts hanging out on the knuckles of the s-curve arm have a very obvious shortcoming. that very same expertise skews their particular perspective. these VERY early adopters, who get up while all the rest of us are still sleeping, typically represent a demographic whose expectations and predispositions are colored by the standards of what kathy sierra calls the “higher resolution experience,” an experience that by its very eliteness does not translate to the majority.

from sierra’s keynote speech at sxsw this year:

“For example, some of you may be going to the music festival [portion of sxsw]. There may be some of you who are going to get laid or for beer. Some of you may actually understand something about the kind of music, and you may have some deep appreciation for some aspects of the music. You’ll hear different notes; you’ll hear more notes; you’ll hear things the rest of us don’t hear. I’m not a music expert, but I have a little bit of experience with mixing boards, so it kinda sucks, because I’ll go to a concert, and I’ll be like, “Oh, if I could just get my hands on those faders”– so it’s a little bit of a higher-resolution experience for me.”

the funny thing is that only an expert would even TALK about the “higher resolution experience.” everyone else doesn’t have any clue that such a concept even exists or what the hell it means. so think about what that implies about the resonance of a campaign (or product) that stringently emphasizes the “higher resolution experience.” there is a whole population of people that aren’t simply “not going to get it,” but rather what they ARE going to get is the message that “this here is not for me.”

which brings us back to the subject of the wii.

before the wii, the video game industry had become mired in a sort of stagnation. newer consoles were coming out, but there was nothing actually new emerging at all (guitar-hero not withstanding for the moment). as each iteration seemed to only up the complexity (i.e “resolution”), of the same sort of staid video game experience, their appeal was becoming more and more narrowed.

from an article in TIME last may on the eve of the wii release:

“The one topic we’ve considered and debated at Nintendo for a very long time is, Why do people who don’t play video games not play them?” [Nintendo president Satoru] Iwata has been asking himself, and his employees, that question for the past five years. And what Iwata has noticed is something that most gamers have long ago forgotten: to nongamers, video games are really hard. Like hard as in homework.

not only were novice users turned off by the intimidating (read: not fun) learning curve, but this wasn’t so good even for the people who could see the hi-res stuff, as many hardcore gamers were getting bored by the substitution of complicatedness for innovativeness.

and then along comes the wii to breathe simple, accessible, fun, new life into the world of the video game console.

Nintendo has grasped [an] important notion that [has] eluded its competitors. Don’t listen to your customers. The hard-core gaming community is extremely vocal–they blog a lot–but if Nintendo kept listening to them, hard-core gamers would be the only audience it ever had. “[Wii] was unimaginable for them,” Iwata says. “And because it was unimaginable, they could not say that they wanted it. If you are simply listening to requests from the customer, you can satisfy their needs, but you can never surprise them.”

and you also can’t necessarily rely on them to show you how to appeal to new KINDS of customers. particularly, customers at a different point on the adoption curve. a year after that time article came out, advertising age reports that the wii’s popularity is “part of a growing phenomenon that’s overhauling the video-gaming industry…. Video gaming is beginning to transcend the solitary boy-in-the-basement stereotype with a new generation of gamers including women, older people and younger children who want to play in a more social atmosphere.” (like, who knew, right?)

by deliberately pursuing a strategy to appeal to the majority, nintendo not only managed to bypass the bottleneck at the left elbow of the gamer bell-curve, but, in fact, to actually expand the very scope of what is a “gamer” identity.

another great example of this is what lexus did in the process of developing the strategy for their certified pre-owned (CPO) car program. CPO cars offer an array of late model, low-mileage vehicles, passing or meeting stringent manufacturer’s inspections, and backed by manufacturers’ warranties.

initially the auto industry lumped CPO customers in with the used car buyers, until a whole lot of research revealed that CPO vehicles actually appeal to their own unique kind of luxury car consumer, a demo that exists in a distinct category between “new” and “used.”

from the book Using Market Research to Create Effective Advertising:
(das what the man said)

The auto industry approach to marketing CPO vehicles was completely discordant with the consumers’ real needs and shopping patterns…..

People interested in a CPO vehicle begin with a consideration of what brands and models are right for them. Status, image, and the more emotional elements of a car purchase are at play. Pricing and budgeting decisions, which drive the used-car buyers’ purchase process from the beginning, do not factor into the CPO car buyers’ process until much later.

These findings were critical in leading Lexus and Team-One to the conclusion that CPO buyers actually mirror new car buyers’ shopping patterns and behaviors, rather than used car ones.

much like nintendo’s strategy with the wii, by focusing on the particular needs of consumers that exist beyond the early adopters Lexus’s CPO strategy expanded not only their understanding of their own brand’s adoption, but the scope of the entire class of luxury car consumers.

an interesting thing to also mention here is that while the wii has gained huge popularity in the majority, it has likewise engaged the curiosity and the desire for something new and fresh from seasoned gamers. likewise the success of lexus’s CPO campaign is no doubt an added incentive to the new car purchasers’ in the sense of increased security about the car’s resale value.

rather than a strategy developed to appeal to early adopters with the expectation that it will eventually transcend to everyone else, these are two examples that represent an approach that appeals directly to groups situated further along the adoption curve. distinct and viable markets do indeed exist beyond the early adopter, and not every strategy can or needs to be designed to specifically suit that one first group. understanding the differing needs and tastes of consumers along the various stages of the adoption curve, and developing strategies to address these groups’ expectations in targeted, relevant ways is key.

    



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by jenks

on rating adoption

“If you don’t love everybody, you can’t sell anybody!’
– Jerry Maguire’s mentor “Dicky Fox”

ok, enough with the fun and games. heave a sigh of relief to not be breathing playa dust anymore, put away your white clothing, let’s get serious, and talk about marketing.

one of the things that i haven’t given too much attention here yet, but consider hugely significant in the development of any marketing strategy is the dynamics of trend diffusion–that is, the process(es) by which trends, products, and ideas spread, and become adopted by and across cultures/markets. as with everything else i do, my particular perspective on the workings of these processes is colored by the lens of identity. people buy those products and brands that they identify with in some fashion, and this likewise affects the point at which they buy them. my approach to diffusion then, is something akin to the scientific process of pouring the active ingredients of adoption patterns into the identity solution and seeing what poofs out.

various theories have been developed to explain how diffusion works. there’s the dancey sounding two-step flow model developed by paul lazarsfeld and elihu katz, in which mass media information is channeled through “opinion leaders” (step 1) to the “masses” (step 2). whether or not this was ever so simply the case outside of the catholic church deali-o, in the current cyclical context of the age of conversation it certainly is no longer. there’s also the politically reminiscent trickle-down effect which says that as products become more affordable they sell better, the coefficient of diffusion thereby being nothing more complicated than price point. as reaganomically limited in its scope of the overall situation as the theory’s name would imply.

in the 60’s everett rogers broke the adoption bell curve down into different types of adopter personas in his diffusion of innovation theory:

and a bit later on frank bass came along with a lot of terrifying math stuff that looks like this:

frac{f(t)}{1-F(t)} = p + {q}F(t)

Where:

 f(t)  is the rate of change of the installed base fraction
 F(t)  is the installed base fraction

 m  is the ultimate market potential

 p  is the coefficient of innovation

 q  is the coefficient of imitation

Sales \ S(t) is the rate of change of installed base (i.e. adoption) \ f(t) multiplied by the ultimate market potential \ m :

\ S(t)=mf(t) 

 S(t)=m{ frac{(p+q)^2}{p}} frac{e^{-(p+q)t}}{(1+frac{q}{p}e^{-(p+q)t})^2}

The time of peak sales \ t^* : t^*=frac{Ln frac{q}{p}}{(p+q)}
The time of peak sales \ t^* : t^*=frac{Ln frac{q}{p}}{(p+q)}
The time of peak sales \ t^* : t^*=frac{Ln frac{q}{p}}{(p+q)}

but all he was really trying to do was name a subwoofer after himself, i.e. the bass diffusion model, which presents a relatively more nuanced perspective for understanding the adoption process:

image:Bass new adopters.gif

the bass diffusion model at least reflects a deeper insight onto what’s going on in this messy process than what the other fellows had to offer with their minimalist s-curves and bell curves and whatnot, but there is one consistent problem with all these graphs, and it’s exactly what you’d expect the problem WOULD be with the creative output of mathematicians:

the words.

“laggards”? “imitators”? mathematicians can maybe claim social ineptness and get away with labelling people in this kind of tactlessly condescending way, but what excuse do marketers have? the implication in the labels for the different adoption categories is not only the assumption that consumers must be striving to catch up to the left side of the graph at all times, but leaves nothing to the imagination about how much respect the folks relegated to sitting on the “back of the bus” deserve.

these are the people we are counting on to BUY our shit at some point, and this is what we call them? see, it seems like it’d be easier if everyone could just be bulldozed leftwards as soon as possible, (where they will be treated as the cheap dat–wait, no errr– as the first-class citizens we want them to feel they are), but in reality i don’t think that’s true were it even possible. not only would early adopters have no way of distinguishing themselves (bye-bye prized adopter category), but if everyone was huddled over on the left, brands would not have the opportunity to recalibrate their strategy; it would just be a one-shot chance to succeed or, what’s more likely, fail.

since it may appear that we might actually NEED the right side of the curve to even out the stakes a bit, perhaps we ought to consider that there are benefits in being able to understand it better. in fact, instead of just blindly inflating the egos of the prodigal “early adopters,” like parents worrying about our kids’ “self-esteem,” there may be benefits in understanding the nature of what is actually going on along the entire curve in greater detail.

the first step is to acknowledge that we shouldn’t assume the various stages on the adoption bell curve are just phases people are going to grow out of or hoping to level up through. the second is that thinking of the categories as their own self-contained identity segments is useless.

think about someone you met relatively recently asking you what kind of music you like. unless it’s within several days of your birthday or christmas, that question is not actually strictly about sonic preferences. people can easily admit such things as “i like british indie rock” or “i like southern rap” or “i like dirty sexy glitchy breaks,” and because musical taste can often translate to much bigger things about a person’s lifestyle, aesthetic sensibilities, community, perhaps even their values, asking what kind of music someone likes is basically just a much more efficient–not to mention pallatable–way of asking them to explain some fundamental aspects of their fragile identity. music preference easily establishes a common language for particular kinds of consumer identities and therefore is a relatively useful way to define market segments.

thinking of an adoption category as a useful means for defining consumer identity unto itself is about as effective as using latin to communicate in modern-day europe–it might be related, but it will not actually get your message across.

there is such an enormous variety of factors that affect not only why someone (or a certain kind of someone, or certain groups of kinds of someones) would make a particular purchase at a particular point, but also why they’d make different purchase decisions at differing points in the diffusion timeline, that whether someone is an “early adopter” or a (eeuggh) “laggard” in itself, tells you practically NOTHING about their identity or how to communicate with them. a friend of mine got an iphone on the first day but still doesn’t have power windows in his car–does this make him an early adopter, or not?

there’s a lot more to say on this topic and i’m not going to bother shoving it all into one post. this one’s enough to set the scene for where the action’s headed, i think. the main point to take away–in case you got frightened by the scary math stuff, and haven’t bothered to read anything since then up till now–being:

suspending the value judgement from adoption categories, and instead developing a more nuanced understanding of their intricacies and functioning, and the particular needs of the individuals within them, will result in more effective strategy.

    



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