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

by Geoffrey A. Moore

an early market dominated by a few visionary customers to a mainstream market dominated by a large block of customers who are predominantly pragmatists in orientation. The gap between these two markets, all too frequently ignored, is in fact so significant as to warrant being called a chasm,

Early adopters, like innovators, buy into new product concepts very early in their life cycle, but unlike innovators, they are not technologists.

Rather they are people who find it easy to imagine, understand, and appreciate the benefits of a new technology, and to relate these potential benefits to their other concerns. Whenever they find a strong match, early adopters are willing to base their buying decisions upon it. Because early adopters do not rely on well-established references in making these buying decisions, preferring instead to rely on their own intuition and vision, they are core to opening up any high-tech market segment.

The early majority share some of the early adopter’s ability to relate to technology, but ultimately they are driven ...

They want to see well-established references before investing substantially. Because there are so many people in this segment—roughly one-third of the whole adoption life cycle—winning their business is fundamental to any substantial profits and growth.

Whereas people in the early majority are comfortable with their ability to handle a technology product, should they finally decide to purchase it, members of the late majority are not. As a result, they wait until something has become an established standard, and even then they want to see lots of support and tend to buy, therefore, from large, well-established companies.

To be sure, some like Dell and, more dramatically, HP have fallen on hard times, but even then customers often bend over backward to give market share leaders second and third chances, bringing cries of anguish from their competitors who would never be granted such grace. It should come as no surprise that the history of these flagship products conforms to the High-Tech Marketing Model.

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. This benefit is typically symbolized by a single, compelling flagship application, something that showcases the power and value of the new product.

What the early adopter is buying, as we shall see in greater detail in Chapter 2, is some kind of change agent. By being the first to implement this change in their industry, the early adopters expect to get a jump on the competition, whether from lower product costs, faster time to market, more complete customer service, or some other comparable business advantage. They expect a radical discontinuity between the old ways and the new, and they are prepared to champion this cause against entrenched resistance.

Being the first, they also are prepared to bear with the inevitable bugs and glitches that accompany any innovation just coming to market.

By contrast, the early majority want to buy a productivity improvement for existing operations. They are looking to minimize the discontinuity with the old...

They want technology to enhance, not overthrow, the established ways of doing business. And above all, they do not want to debug somebody else’s product. By the time they adopt it, they want it to work properly and to i...

In large part this is because of the high degree of discontinuity implicit in their adoption by organizations, and the inability of the marketing effort, to date, to lower this barrier to the early majority. So the products languish, continuing to feed off the early adopter segment of the market, but unable to really take off and break through to the high-volume opportunities.

In sum, when promoters of high-tech products try to make the transition from a market base made up of visionary early adopters to penetrate the next adoption segment, the pragmatist early majority, they are effectively operating without a reference base and without a support base within a market that is highly reference oriented and highly support oriented.

The company failed because its managers were unable to recognize that there is something fundamentally different between a sale to an early adopter and a sale to the early majority, even when the company name on the check reads the same. Thus, at a time of greatest peril, when the company was just entering the chasm, its leaders held high expectations rather than modest ones, and spent heavily in expansion projects rather than husbanding resources.

All this is the result of high-tech marketing illusion—the belief induced by the High-Tech Marketing Model that new markets unfold in a continuous and smooth way. In order to avoid the perils of the chasm, we need to achieve a new state—high-tech marketing enlightenment—by going deeper into the dynamics of the Technology Adoption Life Cycle

First there is a mountain, Then there is no mountain, Then there is. —Zen proverb

First there is a market . . . Made up of innovators and early adopters, it is an early market, flush with enthusiasm and vision and, often as not, funded by a potful of customer dollars earmarked for accomplishing some grand strategic goal. Then there is no market . . . This is the chasm period, during which the early market is still trying to digest its ambitious projects, and the mainstream market waits to see if anything good will come of them.

Then there is. If all goes well, and the product and your company pass through the chasm period intact, then a mainstream market does emerge, made up of the early and the late majority. With them comes the real opportunity for wealth and growth. To reap the rewards of the mainstream market, your marketing strategy must successfully respond to all three of these stages.

The reason for this is simply leverage. No company can afford to pay for every marketing contact made. Every program must rely on some ongoing chain-reaction effects—what is usually called word of mouth. The more self-referencing the market and the more tightly bounded its communications channels, the greater the opportunity for such effects.

As a buying population, or as key influencers in corporate buying decisions, technology enthusiasts pose fewer requirements than any other group in the adoption profile—but you must not ignore the issues that are important to them. 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. Often this may not be sound from a management point of view, and you will have to deny or restrict such access, but you should never forget that it is wanted. Third, they want to be first to get the new stuff. By working with them under nondisclosure—a commitment to which they typically adhere scrupulously—you can get great feedback early in the design cycle and begin building a supporter who will influence buyers not only in his own company but elsewhere in the marketplace as well. Finally, they want everything cheap.

That said, for the most part, these people are not powerful enough to dictate the buying decisions of others, nor do they represent a significant market in themselves. What they represent instead is a sounding board for initial product or service features and a test bed for introducing modifications to the product or service until it is thoroughly “debugged.”

Enthusiasts are like kindling: They help start the fire. They need to be cherished for that. The way to cherish them is to let them in on the secret, to let them play with the product and give you their feedback, and wherever appropriate, to implement the improvements they suggest and to let them know that you implemented them.

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.

In every case, these people took significant business risks with what at the time was unproven technology and/or an unproven company in order to achieve breakthrough improvements in productivity and customer service. And that is the key point. Visionaries are not looking for an improvement; they are looking for a fundamental breakthrough.

As a buying group, visionaries are easy to sell but very hard to please. This is because they are buying a dream that, to some degree, will always be a dream.

First, visionaries like a project orientation. They want to start out with a pilot project, which makes sense because they are “going where no man has gone before,” and you are going there with them. This is followed by more project work, conducted in phases, with milestones, and the like. The visionaries’ idea is to be able to stay very close to the development train to make sure it is going in the right direction and to be able to get off if they discover it is not going where they thought.

The winning strategy is built around the entrepreneur being able to “productize” the deliverables from each phase of the visionary project. That is, whereas for the visionary the deliverables of phase one are only of marginal interest—proof of concept with some productivity improvement gained, but not “the vision”—these same deliverables, repackaged, can be a whole product to someone with less ambitious goals.

The other key quality of visionaries is that they are in a hurry. They see the future in terms of windows of opportunity, and they see those windows closing. As a result, they tend to exert deadline pressures—the carrot of a big payment or the stick of a penalty clause—to drive the project faster. This plays into the classic weaknesses of entrepreneurs—lust after the big score and overconfidence in their ability to execute within any given time frame. Here again, account management and executive restraint are crucial. 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. The last point is crucial. Getting closure with visionaries is next to impossible.

At the front end of the sales cycle, you need such a group to understand the visionaries’ goals and give them confidence that your company can step up to them. In the middle of the sales cycle, you need to be extremely flexible about commitments as you begin to adapt to the visionaries’ agenda. At the end, you need to be very careful in negotiations, keeping the spark of the vision alive without committing to tasks that are unachievable within the time frame allotted. All this implies a mature and sophisticated representative working on your behalf.

In fact, in terms of communications, typically you don’t find them, they find you. The way they find you, interestingly enough, is by maintaining relationships with technology enthusiasts. That is one of the reasons why it is so important to capture the technology enthusiast segment.

To look more closely into these values, if the goal of visionaries is to take a quantum leap forward, the goal of pragmatists is to make a percentage improvement—incremental, measurable, predictable progress. If they are installing a new product, they want to know how other people have fared with it. The word risk is a negative one in their vocabulary—it does not connote opportunity or excitement but rather the chance to waste money and time.

If pragmatists are hard to win over, they are loyal once won, often enforcing a company standard that requires the purchase of your product, and only your product, for a given requirement. This focus on standardization is, well, pragmatic, in that it simplifies internal service demands. But the secondary effects of this standardization on your growth and profitability—increasing sales volumes and lowering the cost of sales—is dramatic. Hence the importance of pragmatists as a market segment.

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. (By contrast, the visionaries are more likely to be planning on implementing the great new order and then using that as a springboard to their next great career step upward.)

What skeptics are struggling to point out is that new systems, for the most part, don’t deliver on the promises that were made at the time of their purchase. This is not to say they do not end up delivering value, but rather that the value they actually deliver is not often anticipated at the time of purchase. If this is true—and to some degree I believe it is—it means that committing to a new system is a much greater act of faith than normally imagined. It means that the primary value in the act derives more from such notions as supporting a bias toward action than from any quantifiable packet of cost-justified benefits. The idea that the value of the system will be discovered rather than known at the time of installation implies, in turn, that product flexibility and adaptability, as well as ongoing account service, should be critical components of any buyer’s evaluation checklist.

Steamrolling over the skeptics, in other words, may be a great sales tactic, but it is a poor marketing one.

making the marketing and communications transition between any two adoption segments is normally excruciatingly awkward because you must adopt new strategies just at the time you have become most comfortable with the old ones.

So, once again, the reference base has partial value in transitioning between adoption segments.

Visionaries lack respect for the value of colleagues’ experiences. Visionaries are the first people in their industry segment to see the potential of the new technology. Fundamentally, they see themselves as smarter than their opposite numbers in competitive companies—and quite often they are.

Pragmatists, on the other hand, deeply value the experience of their colleagues in other companies. When they buy, they expect extensive references, and they want a good number to come from companies in their own industry segment.

Visionaries take a greater interest in technology than in their industry. Visionaries are defining the future. You meet them at technology conferences and other futurist forums where people gather to forecast trends and seek out new market opportunities. They are easy to strike up a conversation with, and they understand and appreciate what high-tech companies and high-tech products are trying to do. They want to talk ideas with bright people. They are bored with the mundane details of their own industries. They like to talk and think high tech.

Pragmatists expect all these things. When they see visionaries forging their own paths with little or no thought of connecting with the mainstream practices in their industry, they shudder. Pragmatists have based their careers on such connections. Once again, it is painfully obvious that visionaries, as a group, make a very poor reference base for pragmatists.

Pragmatists, on the other hand, tend to be committed long term to their profession and the company at which they work. They are very cautious about grandiose schemes because they know they will have to live with the results. All in all, it is easy to see why pragmatists are not anxious to reference visionaries in their buying decisions. Hence the chasm. This situation can be further complicated if the high-tech company, fresh from its marketing successes with visionaries, neglects to change its sales pitch.

may be trumpeting its recent success at early test sites when what the pragmatist really wants to hear about are up-and-running production installations. Or the company may be saying “state-of-the-art” when the pragmatist wants to hear “industry standard.”

Indeed, a truly predatory type of investor—sometimes referred to as a vulture capitalist—looks to use the chasm period of struggle and failure as a means to discredit the current management, thereby driving down the equity value in the company, so that in the next round of funding, he or she has an opportunity to secure dominant control of the company, install a new management team, and, worst case, become the owner of a major technology asset, dirt cheap.

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.

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.

This is a classic chasm symptom, as the entrepreneurial enterprise leaves behind the latent enthusiasm of the early market. It is usually interpreted as a letdown in the sales force or a cooling off in demand when, in fact, it is simply the consequence of trying to expand too rapidly and too broadly into too loosely bounded a market.

The D-Day strategy prevents this mistake. It has the ability to galvanize an entire enterprise by focusing it on a highly specific goal that is 1) readily achievable and 2) capable of being directly leveraged into long-term success. 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.

The D-Day strategy keeps everyone on point—if we don’t take Normandy, we don’t have to worry about how we’re going to take Paris. And by focusing our entire might on such a small territory,...