Why Gadget Makers Should Target Late Adopters

 (By: Wired.com)

If you believe the standard theory about how new gadgets like the iPad succeed, it’s all up to the early adopters. These are the die-hard gear hounds like me who buy anything new. Early adopters are only a small slice of the market—an estimated 13.5 percent—but high tech marketers usually target them first. Get the early adopters excited, the thinking goes, and they’ll talk up the gizmo to their friends, eventually persuading the great mass of the market to buy.

In contrast, there are the people on the far end of the adoption curve: the laggards. They’re the 16 percent of the population who wait for years to pick up on a new gadget. Why bother with them? They’re going to sit on their hands, glowering at the new and refusing to buy. Marketers generally ignore them, assuming laggards are irrelevant to the early success of a high tech invention.

But this view might be precisely wrong. If you believe recent work by Jacob Goldenberg, an Israeli marketing academic, laggards might be a crucial high tech demographic.

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How could this be? Goldenberg offers the following thought experiment. Imagine that John is a laggard who buys a Walkman and listens to it while he jogs every day. Eventually, the Discman comes along, but John doesn’t upgrade because he doesn’t see anything wrong with his Walkman and doesn’t want to rebuy his music on CD. Then MiniDisc players come along, but John still holds on to his Walkman. Then, 16 years after he bought his portable tape deck, MP3 players become the hot new thing.

By now, though, John is finally starting to feel self-conscious about his huge, bulky Walkman, and maybe it’s starting to break down. He’s finally ready to buy a new music player, so he becomes—ironically—one of the first people to get an iPod.

This, as Goldenberg and his colleague Shaul Oreg put it, is the “leapfrog effect.” A laggard, merely by behaving like a laggard, can wind up becoming one of the most avant-garde of early adopters.
“We realized that the definition of laggard is wrong,” Goldenberg says. “In the case of multiple generations of products, they can just skip generations. So they can also be first.”

Nice theory, but is it true? To test it, Goldenberg surveyed 105 people in 2003 to find out what sort of portable audio players they owned. Bingo: Fully 10 percent had done exactly what Goldenberg predicted—they’d jumped from a cassette player straight to an MP3 player. Another 23 percent hadn’t bought anything yet to replace their cassette player, so presumably they, too, could leapfrog, possibly even becoming the folks who buy the next new new thing.

Goldenberg argues that the economic impact of leapfrogging laggards is huge. By his calculations, if only 10 percent of laggards leapfrog, their purchases can drive profits from a new gadget 89 percent higher than they would be without leapfrogging. “And that can be the difference between succeeding and not succeeding,” he says.

If Goldenberg is right, marketers have made a colossal error by snubbing laggards. Instead, they ought to be frantically figuring out how to market to them. After all, early adopters don’t need much convincing. But if you can figure out how to tip just 1 percent of laggards into the “buy” category, the upside is huge. What’s more, Goldenberg thinks word-of-mouth recommendations from laggards are supremely persuasive: If John can handle that new gizmo, anyone can, right?

Which brings us to the iPad. Many geeks I know shrugged when Apple finally showed it off. It doesn’t do anything better than their iPhone or laptop, so they can’t figure out why anyone would want one.
Sure, but what if you’re a laggard who never bought an iPhone or even a laptop? Imagine, for example, all the older consumers who’ve never bought a home computer because they’re baffled by mouses and device drivers. (That’s probably 30 percent of older consumers, by the way.) But now their kids are taking digital pictures and videos of the grandkids, and they’d like something that lets them easily see this stuff, something with an intuitive interface that they can carry around with them. They’re ready to leapfrog to something radically new.

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