The reason for the chasm

My previous post was about the different types of customers that can be seen in technological industry. In this post I will be discussing about the so called "chasm" based on the book 'Crossing the Chasm'. 

The first crack

This is the difference between the innovators and the early adopters. The reason for the difference is that early adopters cannot easily relate or understand the benefit of the product. Technology enthusiast loves the product for its architecture, but nobody else can figure out how to start using the product. One product that has fallen from this crack is "desktop video conferencing". There were many versions of the product. However customers didn't really understand the purpose of the product.

The other crack

This is the difference between the early majority and the late majority. The reason for this difference is the differing demands of the end user. By this time the market is already well developed and the product has entered the mainstream market. For people who are not frequent users of the product / system, the protocols of that system was too hard to remember or use. Thus mature markets find it harder to cover up their R&D costs because the end user cannot capture the benefit of the product. 

The chasm

The chasm exists between the early adopters and the early majority. The below table will explain the reason for the existence of the chasm;

Technology adoption lifecycle

The concept of technology adoption life cycle needs to be understood by any technology related organization in order to survive in the industry in the long term. In this post I will be explaining a model for understanding the acceptance of new products.

Innovators
These are the people who pursue new technology aggressively. You can associate people like Steve Jobs and Bill Gates to understand the characteristics of this category. They seek out new technology even before a formal marketing plan is being launched. Technology plays a significant role in their life and they would purchase technology simply for pleasure. However winning innovators for your organization is key because they will reassure other players in the market place that your product actually works.

Early adopters

People who belong to this category are not technologists as innovators. They understand and appreciate the benefits of new technology and relate these benefits to their organizational concerns. Whenever there is a strong match between these two aspects early adopters would base their buying decision upon it. However they do not place significant importance on references, thus base the buying decision on their own vision. Early adopters are the key to opening up the high tech market segment.

Early majority
The early majority shares some enthusiasm to new technology as early adopters, however they are driven by practicality. They require well established references prior to any investment decision. This segment comprise of one-third of the whole adoption life cycle, thus winning this segment is key to any substantial profits.

Late majority

As the book says "shares all the concerns of the early majority, plus one major additional one". This additional concern is because unlike the early adopters, people in this category are not comfortable is using technology. Thus, they wait till until the particular technology becomes an established standard. Also they require a lot of support and prefer to buy only from established companies. This group comprises about one-third of the total buying population in any given segment and winning this segment will be highly profitable for the company

Laggards
This segment simply doesn't want to take part in any technology due to personal and economic reasons. The only time they buy a technological product is when it is buried so deep inside another product. For example a microprocessor is embedded in a breaking system. They will not even know that such a product exists. This segment however is not worth pursuing. 

The new social marketing tool..

I came across this great social media tool which could be used for marketing and for personal use. It's called Pinterest and it's based on images and videos. It is the up and coming social media tool nowadays and businesses could use it to build brand image and awareness. Here are some of the things I found on how businesses can use Pinterest for marketing purposes;


1. Pin pictures of clients and their testimonials
2. Create Boards for your products and Pin pictures related to the product
3. You can turn traditional case studies into visually engaging stories, since images evoke emotion
4. Take pictures of customers engaging with your product or service, then develop an entire pin board dedicated to customers.
5. If you're attending a conference or a trade show, Blog about the event before you go—the who, what, when and why you’re going. Then take pictures at the event, and create a Pinterest board for them.
6. You can also use the tool for lead generation. The Pinterest account can be used to drive traffic to the company website. This could be achieved by creating catalogs of pin boards and pins based on your products.
7. You can encourage your website visitors to pin your content
8. You can also have "pin-to-win" contests in your Pinterest account and this can create a tremendous amount of viral excitement around your Pinterest presence.
9. Create a board that tells the story of your company and communicates your core values.
10. Allow your customers to join in on certain boards and pin ideas and suggestions about how to use your product, or themes that go along with your products and services
11. It can be used to promote the company blog

For all this to be done you need to ensure that all your social media tools are integrated. You should also add a Pin It button to your website to enable visitors to easily Pin your content.





 

Benefits of loyalty programs

These are some of benefits that businesses can get by having their own loyalty program;

Greater customer knowledge

A loyalty program facilitates a company to gain detailed knowledge about its customer base. The information will give useful insights as to the lifestyle of the customers and their preferences. This information could be used in creating targeted promotions or reform services around high-value customers’ needs.

83 percent of hotel guests say that personalized service and attention to their needs provides value while staying at a hotel

Customer retention

A well-defined loyalty program improves customer retention rates by increasing the member’s “switching costs”. These are costs associated with changing from one alternative to another competitor. Loyalty programs that create high switching costs to its members will have high retention rates because these members will be reluctant to move into another competitor due to the costs associated in the transition.

Differentiated Service and Brand Equity

While consumers agree that price is important, they’d choose a slightly higher rate for added service. – Forrester, April 2002

Most companies have identified that competing based on cost brings in no or less results. Rather, providing value beyond customers’ expectations is more rewarding. Even those businesses established upon providing a low-cost service (for example low-cost carriers such as Southwest Airlines and JetBlue Airways) find that focusing beyond factors such as price provides them better results. All of the benefits discussed above lead to improved profitability for the business.A loyalty program provides this detailed information on demographics, transactions and personal preferences required to successfully identify groups of customers and then develop products or services that suits those segmented members’ needs.

Improved profitability 

All of the benefits discussed above lead to improved profitability for the business. Greater profits are a result of;

·         Higher customer retention

·         Higher prices paid for products / services

·         Increased average purchase size

·         Reduced marketing costs

·         Decreased unsold inventory

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Benefits of Cloud computing

These are some of the benefits of businesses using Cloud computing for their operations;

IT decapitalization

Cloud computing eliminates the need for businesses to acquire high-priced servers, software and also the people required to maintain systems. The solutions required by the enterprise can simply be outsourced to a Cloud computing vendor specialized in handling such requirements. With the use of Cloud computing companies can save money because the vendors possess the resources, servers, software, and infrastructure. Firms can sign up with the vendor and outsource the service to a third party.

Integrate part of a disaster recovery solution

Firms can integrate with Cloud computing as a type of storage device that can integrate with their disaster recovery plan and save the data. It can also be used to provide additional safeguard procedures to ensure that customer data will be safe and the organization will continue to operate based on any type of event.

Improve efficiency

Cloud computing allows any organization to buy into the service because the infrastructure is hosted with the vendor. Companies can pay for the Cloud services as the business grows. Better flexibility and cost effectiveness allows businesses to improve their efficiency. 

Eco-friendly

Cloud computing help firms save the environment because they need not acquire any hardware. It is simply outsourcing the infrastructure requirement to a Cloud computing vendor. Companies do not need to have their own data centers; they can have their application hosted with the Cloud computing provider and this enable the firm to save energy.