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How The Product Adoption Cycle Drives Strategy

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Introduction


The product adoption cycle is simply the sequence of customer types that purchase your product from the time you launch to time you phase out. This is because customer purchasing patterns vary in response to different product categories.

Some customers are always looking to try out something new. Others prefer to wait and watch before getting their feet wet. You’ll even find those who do not budge until they have no other choice.

Deconstructing the theory

business man stepping forward on a product life cycle chart (PLC)

The product adoption cycle and theory roughly reflects the bell-shaped product lifecycle (shown above). The trouble is, the bell-shape product lifecycle is based on the assumption that all products have a limited shelf life. Products go through an introductory phase and if successful passes on into growth and maturity, before witnessing a decline into obsolescence.

The bell-shaped curves makes perfect sense when it comes to products that face a planned discontinuity. Yet, it is simply not true for all other products. When was the last time the banana was phased out to make room for banana version 2.0? Did they ever discontinue chocolate or vanilla ice cream?

Product adoption cycle explained

It must be stated that there are several variables in play that decide how well a product is received and how it progresses through its adoption stages. For instance, elements like reputation, branding, marketing activities, pricing, category-type and supply have a big influence on the adoption cycle that develops.

But, for the most part, studies have generalized adoption cycles. All things being equal, a bell curve is formed and used to reflect the customer types that fall within the allotted stages.

There are 5 types of customers to be aware of

Businessman think about innovation adoption lifecycle concept, blue bokeh background.

1. INNOVATORS

These are the first individuals that adopt an innovation. They tend to be smitten by new ideas or new practices and are willing to accept some level of uncertainty from them.  Innovators are prone to alpha test products that claim superiority or improved efficiency over what is currently established. They are typically aware that the products they adopt may not deliver on promises and may even fail to gain mass appeal. This customer type usually has strong connections with the product category and may even voice their likes, dislikes or reviews.

2. EARLY ADOPTERS

The second quickest customer type to buy into a new product are the early adopters. By proportion they are larger than innovators. They have a high degree of opinion leadership and tend to influence later customer types in their buying decisions. Early adopters practice more diligence than innovators, preferring to secure more information before taking the dive. They generally share their evaluations of the products they adopt and tend to have an impact on the product entering the mainstream market.

3. EARLY MAJORITY

This customer type is reasonably risk averse preferring to be fully convinced that the product is worth adoption or a switch. As result they tend to be slower in the adoption process. They aren’t opinion leaders, but rely on opinion leaders to gain information and insight into the product. The early majority is more diligent with their resources and will not commit to anything without good reason.

4. LATE MAJORITY

Individuals in this class will adopt an innovation much after the average member of society. They are skeptical about new technology, highly risk-averse. They also have very little opinion leadership and have minimal interaction with those that do.

5. LAGGARDS

Laggards bring up the rear of the adoption cycle. They prefer the tried and tested traditional practices. Their risk appetite is virtually nonexistent and are often skeptical of change. This customer set tends not to seek opinions from outside a close social circle and they certainly don’t demonstrate opinion leadership.

Why is the product adoption cycle important?

PRODUCT DEVELOPMENT & TACTICAL MARKETING

This adoption cycle is important when it comes to product research, testing and marketing strategy. During product development it is not uncommon to tap category innovators and early adopters and bring them into the development process.

This leads to better user-centric designs and draws valuable feedback to help deliver the best possible product to the mass market. Also, these adopter types help build word-of-mouth which heightens the impact of marketing activities that follow. That’s why influencer marketing has become so popular in recent times (this also reflects a generational change). Think about YouTube product review channels. Their existence is based on this theory.

Innovators and early adopters may be invited to behind the scene walkthroughs or launch events. Their natural desire to share and review takes over, setting in motion a parallel marketing opportunity for businesses.


STRATEGIC MARTKETING

Ultimately the essence of the adoption curve is to tailor marketing activities to the stage in which the product operates. Since no market is identical, the marketing mix will need to be altered to suit.

Generally speaking, in the beginning marketing activities center around building product awareness. Marketers employ more feature-benefit communications. Should the product enter the growth stage, the next step would be to show customers more evidence. For instance, user testimonials and case studies.

As more of the target market gets covered and we approach a slowdown or decline, the focus may shift to using more pricing efforts to tap into the late majority who are highly skeptical to begin with. As the product phases out, marketing spends tapper off.  This is especially so since laggards don’t require much for reasons discussed above.

Things to keep in mind

If you notice, I deliberately omitted age, social status as well as percentages of any kind that are typically used by most marketers.

In my opinion, it’s better to concentrate on the psychographic and behavioral aspects of the groups instead. As I mentioned in the beginning, purchasing patterns demonstrated vary between product categories.

There are no absolutes when it comes to customer adoption types. However, calculated assumptions may be made on the basis of past data or secondary sources available to you.

In theory, there are general estimations drawn from various studies. Innovators account for 2.5%, early-adopters 13.5%, early majority 34%, late majority 34% and laggards 16%. Studies also indicate that social status, education level and income decline as you proceed through the stages. Again, this is not carved in stone. But, recurring research will help you build your profiles.

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