Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers

by Geoffrey A. Moore

One of the most important lessons about crossing the chasm is that the task ultimately requires achieving an unusual degree of company unity during the crossing period.

the key to getting beyond the enthusiasts and winning over a visionary is to show that the new technology enables some strategic leap forward, something never before possible, which has an intrinsic value and appeal to the nontechnologist.

Because of these incompatibilities, early adopters do not make good references for the early majority. And because of the early majority’s concern not to disrupt their organizations, good references are critical to their buying decisions. So what we have here is a catch-22. The only suitable reference for an early majority customer, it turns out, is another member of the early majority, but no upstanding member of the early majority will buy without first having consulted with several suitable references.

Actually, in this context, defining marketing is not particularly difficult: It simply means taking actions to create, grow, maintain, or defend markets.

Of course, talking this way about marketing merely throws the burden of definition onto market, which we will define, for the purposes of high tech, as: • a set of actual or potential customers • for a given set of products or services • who have a common set of needs or wants, and • who reference each other when making a buying decision.

If two people buy the same product for the same reason but have no way they could reference each other, they are not part of the same market.

Marketing professionals insist on market segmentation because they know that no meaningful marketing program can be implemented across a set of customers who do not reference each other.

Classically, the first people to adopt any new technology are those who appreciate the technology for its own sake.

First, and most crucially, they want the truth, and without any tricks.

Second, wherever possible, whenever they have a technical problem, they want access to the most technically knowledgeable person to answer it.

Third, they want to be first to get the new stuff.

Finally, they want everything cheap.

In sum, technology enthusiasts are easy to do business with, provided you 1) have the latest and greatest technology, and 2) don’t need to make much money.

Visionaries are that rare breed of people who have the insight to match up an emerging technology to a strategic opportunity, the temperament to translate that insight into a high-visibility, high-risk project, and the charisma to get the rest of their organization to buy into that project.

As a class, visionaries tend to be recent entrants to the executive ranks, highly motivated, and driven by a “dream.”

The core of the dream is a business goal, not a technology goal, and it involves taking a quantum leap forward in how business is conducted in their industry or by their customers.

Visionaries are not looking for an improvement; they are looking for a fundamental breakthrough.

The key point is that, in contrast with the technology enthusiast, a visionary focuses on value not from a system’s technology per se but rather from the strategic leap forward such technology can enable.

Because they see such vast potential for the technology they have in mind, they are the least price-sensitive of any segment of the technology adoption profile.

Finally, beyond fueling the industry with dollars, visionaries are also effective at alerting the business community to pertinent technology advances. Outgoing and ambitious as a group, they are usually more than willing to serve as highly visible references, thereby drawing the attention of the business press and additional customers to small fledgling enterprises.

First, visionaries like a project orientation. They want to start out with a pilot project,

This is followed by more project work, conducted in phases, with milestones, and the like.

While reasonable from the customer’s point of view, this project orientation is usually at odds with the intentions of entrepreneurial vendors who are trying to create a more universally applicable product around which they can build a multi-customer business.

it requires careful account management including frequent contact at the executive level.

The winning strategy is built around the entrepreneur being able to “productize” the deliverables from each phase of the visionary project.

The other key quality of visionaries is that they are in a hurry.

The goal should be to package each of the phases such that each phase: 1. is accomplishable by mere mortals working in earth time 2. provides the vendor with a marketable product 3. provides the customer with a concrete return on investment that can be celebrated as a major step forward.

Getting closure with visionaries is next to impossible.

Because controlling expectations is so crucial, the only practical way to do business with visionaries is through a small, top-level direct sales force.

When pragmatists buy, they care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get. In other words, they are planning on living with this decision personally for a long time to come.

Pragmatists tend to be “vertically” oriented, meaning that they communicate more with others like themselves within their own industry than do technology enthusiasts and early adopters, who are more likely to communicate “horizontally” across industry boundaries

There is no one distribution channel preferred by pragmatists, but they do want to keep the sum total of their distribution relationships to a minimum. This allows them to maximize their buying leverage and maintain a few clear points of control should anything go wrong.

Pragmatists are reasonably price-sensitive. They are willing to pay a modest premium for top quality or special services, but in the absence of any special differentiation, they want the best deal.

Overall, to market to pragmatists, you must be patient. You need to be conversant with the issues that dominate their particular business. You need to show up at the industry-specific conferences and trade shows they attend. You need to be mentioned in articles that run in the newsletters and blogs they read. You need to be installed in other companies in their industry. You need to have developed applications for your product that are specific to their industry. You need to have partnerships and alliances with the other vendors who serve their industry. You need to have earned a reputation for quality and service. In short, you need to make yourself over into the obvious supplier of choice.

Conservatives, in essence, are against discontinuous innovations. They believe far more in tradition than in progress. And when they find something that works for them, they like to stick with it.

The truth is, conservatives often fear high tech a little bit.

There are two keys to success here. The first is to have thoroughly thought through the “whole solution” to a particular target end-user market’s needs, and to have provided for every element of that solution within the package.

Conservatives represent a major opportunity for the high-tech industry in that they greatly extend the market for high-tech offers that are no longer state-of-the-art. The fact that the United States has all but conceded great hunks of this market to the Far East is testimony not so much to the cost advantages of offshore manufacturing as to the failure of onshore product planning and marketing imagination. Many offshore solutions today still bring only one value to the table—low cost. Conservatives are indeed price sensitive, but that is largely because they cannot get full value from their user experience.

So, the conservative market is still something that high tech has more in its future than in its past. The key is to focus on convenience rather than performance, user experience rather than feature sets.

To maintain leadership in a mainstream market, you must at least keep pace with the competition. At this point it is no longer necessary to be the technology leader, nor is it necessary to have the very best product. But the product must be good enough, and should a competitor make a major breakthrough, you have to make at least a catch-up response.

In this regard, if we now look back over the first four profiles in the Technology Adoption Life Cycle, we see an interesting trend. The importance of the product itself, its unique functionality, when compared to the importance of the ancillary services to the customer, is at its highest with the technology enthusiast, and at its lowest with the conservative.

Conservatives, in particular, are extremely service oriented.

Skeptics—the group that makes up the last one-sixth of the Technology Adoption Life Cycle—do not participate in the high-tech marketplace, except to block purchases.

One of the favorite arguments of skeptics is that disruptive innovations of any kind rarely fulfill their promises and almost always come with unintended consequences.

Replicate D-Day, and win entry to the mainstream. Cross the chasm by targeting a very specific niche market where you can dominate from the outset, drive your competitors out of that market niche, and then use it as a base for broader operations. Concentrate an overwhelmingly superior force on a highly focused target.

The key to the Normandy advantage, what allows the fledgling enterprise to win over pragmatist customers in advance of broader market acceptance, is focusing an overabundance of support into a confined market niche. By simplifying the initial challenge, the enterprise can efficiently develop a solid base of references, collateral, and internal procedures and documentation by virtue of a restricted set of market variables. The efficiency of the marketing process, at this point, is a function of the “boundedness” of the market segment being addressed. The more tightly bound it is, the easier it is to create and introduce messages into it, and the faster these messages travel by word of mouth.

Most companies fail to cross the chasm because, confronted with the immensity of opportunity represented by a mainstream market, they lose their focus, chasing every opportunity that presents itself, but finding themselves unable to deliver a salable proposition to any true pragmatist buyer.

To put it simply, the consequences of being sales-driven during the chasm period are fatal.

The sole goal of the company during this stage of market development must be to secure a beachhead in a mainstream market—that is, to create a pragmatist customer base that is referenceable, people who can, in turn, gain us access to other mainstream prospects.

Numerous studies have shown that in the high-tech buying process, word of mouth is the number-one source of information that buyers reference, both at the beginning of the sales cycle,