"Crossing the Chasm" with Mobile Data

OK, so you've got the first release of hot new mobile data product, one that has enormous market potential, and is getting great reviews from everyone you've showed it to so far. All you need to do is polish it up a bit and roll it out, and the world will beat a path to your door, right? In 1991, a technology marketing consultant named Geoffrey Moore wrote a book that would become a business classic, called "Crossing the Chasm". (HarperBusiness) It is considered by many to be a "must-read" for anyone in the business of selling or marketing technology products. The lessons are as timely and relevant as ever to those who now are now attempting to move a mobile data product into the mainstream. In a nutshell, "Crossing the Chasm" disputes the notion that technologies that are well received by early adopters will flow seamlessly into the mainstream. The "Chasm" is, in effect, a graveyard in which lie the remains of many great technical ideas that became business failures. OK, so maybe there's a little more to it than just "build it and they will come ..." ?

Life Cycle of a Successful Product

The typical life cycle of a successful product is often represented by diagrams like the following, with the product moving through the market segments from left to right. The first segment is populated by the "innovators", followed by the "early adopters", the "early majority", then the "late majority", and finally the "laggards" towards the end of the life cycle. The groups are differentiated primarily by the reasons behind their buying decisions.

The conventional wisdom is that a product that is successful with one segment can move fairly quickly into the next segment, with relatively minor adjustments in marketing, and minor lulls in sales, as represented by the small gaps between the segments. A key segment, the "early adopters" are visionaries that get a kick out of experimenting with new things and putting them together to create some competitive advantage for their business. They love experimenting with new things, and enjoy the challenge of assembling them into innovative solutions that provide some competitive advantage for their business. By contrast, the next segment, the "early majority", is populated by pragmatists who aren't particularly enamored of newness for the sake of newness. They are a much larger market segment than the "early adopters", and tend to buy into new things only after the benefits to their business are clear, safe, and established, and they receive solid references from others in their segment.

Technology Products are Different?

The key premise of "Crossing the Chasm" is that for new technology products the above diagram isn't accurate, because there is a much larger gap, the "Chasm", between the early adopters and the early majority.

In fact, this chasm is so wide and treacherous that crossing it should be the central focus of the marketing strategy for any new technology product. The main reason for this is the early adopters aren't considered credible references by the early majority, so in effect a chicken-and-egg situation exists. None of the early majority members will buy into a new technology until they see a solid track record of success by other early majority members.

The Attack

So how does a new technology business improve their odds of successfully traversing the chasm?

Moore coaches marketing professionals to plan in four stages. He calls it the D-Day strategy, in analogy to the attack on Normandy by the Allies in World War II:

1. Target the Attack: the target market should be clearly defined by subsegments, with customer profiles and "must have value propositions" for each one. These subsegments can then be prioritized for the next stage. They key is to identify and focus on a market that is small enough that can be quickly conquered and dominated, and strategically located so that it can then be used as a starting point to penetrate other markets.

If you have been in the mobile data business for a while, you have seen any number of "Swiss army knife" products that were supposed to take the general wireless market by storm. You may even have built or tried to sell some of them. It's more difficult to think of mobile data products that were designed and marketed to a carefully profiled, appropriately sized subsegment, with a clear strategy to migrate to other subsegments after the first was conquered.

2. Assemble the Invasion Force: a "whole product" is assembled around the technology, usually with the help of allies to provide installation, support, and billing services and other supporting products or technologies.

Do we in the mobile data business take enough time to understand the "out of box" experience for new customers? Do we expect mainstream customers to acquire devices, airtime and software from different sources? Can non-techies install these products quickly and easily? How many bills will the customer get? Who will provide various levels of customer and technical support? How will the customer upgrade software on devices in the field? These are the kinds of issues that don't really faze "early adopters", but will kill acceptance of a new product by the "early majority".

3. Define the Battle: Moore believes that the pragmatist is uncomfortable with a product that appears to sit alone in a market that it has defined by itself. The pragmatist is more accepting of a product that has competitors, and is well-positioned among them.

Sometimes we in the mobile data business like to think that our products are "in a class by itself", with no real competition. The "early adopters" love to hear this. However, it looks like we can be more successful with the "early majority" if we recognize alternatives (maybe even non-technical ways of doing things today) and are able to clearly and concisely articulate the relative benefits.

4. Launch the Invasion: the final piece, as the invasion is launched, is to establish distribution and pricing.

There are many options, but there's typically only one chance to get it right. The key is to secure a distribution channel with which the pragmatist customer will be most comfortable, and the pricing and related factors should be set primarily by whatever will best motivate the distribution channel.

The wireless community has many "links in the value chain" including device manufacturers, network carriers, infrastructure providers, system integrators, VARS, software developers, online application distributors, office supply outlets, cellphone stores, and others. Almost any of these can be a distribution channel for a mobile data product. With which of the distribution channels does our target market already have an established, credible relationship? Do we clearly understand what motivates this channel, and have we structured the pricing, packaging, training and sales tools for our product accordingly?

Conclusion

Moore acknowledges that this, like any model, is a bit oversimplified, and that there are many other factors and unknowns that are not represented in a real world that is far more complex and far less clear cut.

Nevertheless, the basic premise and lessons ring as true today as ever - and to no one more than those in the mobile data community that have been working to bring a new product into the mainstream.

Written by:

Kim Spitznagel
President
Outr.Net, Inc.



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