In Geoffrey Moore’s book, Crossing the Chasm, he describes the strategic marketing jump that tech companies must make to gain traction in mainstream markets. New tech firms with a handful of customers that are innovators or early adopters on the Technology Adoption Lifecycle often find it difficult to break into the early majority and late majority markets – and can get stuck in the “chasm” between the early and mainstream markets.
So why does this chasm exist? Primarily, innovators and early adopters (the “early market”) are tech-savvy risk-takers. They are always looking for opportunities to gain a business edge from early adoption of new technologies – even if they are on the “bleeding edge”. They can be sold on the idea of something because they can easily envision the value. But for mainstream market pragmatists and conservatives, they want to see rock solid proof of a tech firm’s ability to deliver before they’ll commit their dollars. Unlike the innovators, pragmatists and conservatives need to see a solid, proven business case before they jump into a market with both feet. They’re happy to let the early adopters act as guinea pigs, wait until the dust has settled on a new technology category, and sit out of the market until a mature market leader has emerged.
So how can a young tech company push across the chasm? What strategy will get you across the chasm and penetrate into the mainstream market in which two thirds of the customers you want to sell to live? Technology buyers in the mainstream market (early majority/late majority) wait for the case studies that prove the success of what you do as a tech provider. Without social proof of results, they’ll never take the word of your marketing department: they need to hear from customers – ones that are similar in profile to themselves. They don’t care about how many innovative/cutting edge/market-challenging customers that have seen the light and bought your technology. Mainstream market buyers can easily dismiss these guys because of the number of tech vendors that never make it to scale. Mainstream market buyers want to see mainstream market case studies.
So how do you get them? They’re out of reach – on the other side of the chasm. The limited resource pool of a tech start-up ought to force a sense of focus: there just aren’t enough people to try to sell to everybody (nor to support them after the sale). But the “sell, sell, sell” urge often takes over and efforts end up fatally diluted; chasing prospects who are interested in what’s going on, but have no intention of purchase until a clear market leader emerges. The trick is to actively pick a focus, target efforts towards a small segment of the early majority market, and gain a foothold in the mainstream buyers’ camp. Once inside, the acquisition of a few reference customers within one mainstream market niche will help you to spread out into the surrounding segments.
In essence, there are four things you need to do to make the jump:
- Commit to targeting a small segment of the mainstream market in order to focus resources and fight a battle you can actually win.
- Work out how to articulate your value proposition so it will resonate with that niche.
- Leverage reference customers that sit on the left-most cusp of the chasm (as these will be most similar in profile to those in your target niche on the right-hand edge of the chasm).
- Be ready to leverage any new mainstream market customers in advocate marketing programs to gain more momentum and greater penetration into the mainstream market.
Steps 1 and 2 are strategic, and may involve a combination of niche product development and marketing “spin” to increase the appeal of your technology to your chosen mainstream buyer group. Steps 3 and 4 are about putting social proof behind your marketing claims to solidify your foothold on the mainstream market and gain momentum. If you can be quick at bringing new mainstream customers into an advocate marketing/word-of-mouth (WoM) program, you can enlist them to help you sell more effectively to others in the early majority market.
An advocate marketing program, supported by customer engagement tools, helps by giving you the ability to mobilize reference customers in greater numbers, as well as maximizing the Word-of-Mouth “reach” and “volume” you get out of each customer. When you acquire a new customer in the mainstream market – you need to shout about it. But more importantly, you also need them to shout about it. Only then will the rest of the early majority market start to pay attention to your organization as a viable contender.
Once you’ve acquired a “critical mass” of customers in your chosen mainstream niche (which sounds like a contradiction in terms), you will need to continue your piecemeal assault on the mainstream market by tackling another niche – one that is close enough to your first target for your mainstream customer references to be relevant…and the process begins again: commit to the strategy, focus on the target, close sales, drive word-of-mouth enlistment.
It is the ability to quickly segment and activate reference customers – putting the right customer in front of the right prospect – that is the key to crossing the chasm and solidifying a foothold in the mainstream market. Without a strong customer voice and plenty of customer-driven content (case studies in all of their short and long forms) you simply won’t be able to present a compelling case to skeptical pragmatists and ultra-skeptical conservatives.