Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers

by Geoffrey A. Moore

The basis for reform is the principle that winning at marketing more often than not means being the biggest fish in the pond. If we are very small, then we must search out a very small pond indeed.

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 word in their vocabulary—it does not connote opportunity or excitement but rather the chance to waste money and time.

What the pragmatist likes best about VARs is that they represent a single point of control, a single company to call if anything goes wrong.

Conservatives like to buy preassembled packages, with everything bundled, at a heavily discounted price. The last thing they want to hear is that the software they just bought doesn’t support the printer they have installed. They want high-tech products to be like refrigerators—you open the door, the light comes on automatically, your food stays cold, and you don’t have to think about it. The products they understand best are those dedicated to a single function—word processors, calculators, copiers, and fax machines. The notion that a single computer could do all four of these functions does not excite them—instead, it is something they find vaguely nauseating.

Fibery is not for them

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. This is critical because there is no profit margin to support an afterpurchase support system. The other key is to have lined up a low-overhead distribution channel that can get this package to the target market effectively.

that markets—particularly high-tech markets—are made up of people who reference each other during the buying decision.

golden

That’s it. That’s the strategy. 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, force 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.

Well said

Trying to cross the chasm without taking a niche market approach is like trying to light a fire without kindling.

Instead, the claim is made that, although niche strategy is generally best, we do not have time—or we cannot afford—to implement it now. This is a ruse, of course, the true answer being much simpler: We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market-driven company; we are a sales-driven company.

Cool

To be the leader in any given market, you need the largest market share—typically over 50 percent at the beginning of a market, although it may end up to be as little as 30 to 35 percent later on. So, take the sales you expect to generate over any given time period—say the next two years—double that number, and that’s the size of market you can expect to dominate. Actually, to be precise, that is the maximum size of market, because the calculation assumes that all your sales came from a single market segment. So, if we want market leadership early on—and we do, since we know pragmatists tend to buy from market leaders, and our number one marketing goal is to achieve a pragmatist installed base that can be referenced—the only right strategy is to take a “big fish, small pond” approach.

So we have to find 2M niche market

So, because of the dynamics of technology adoption, and not because of any niche properties in the product itself, platforms must take a vertical market approach to crossing the chasm even though it seems unnatural. The good news for them is that, later on, when a mass market emerges, it is much easier for the platform vendor to take advantage of the opportunity.

Make a total commitment to the niche, and then do your best to meet everyone else’s needs with whatever resources you have left over.

In the case of Clarify it made a total commitment to the network hardware companies, winning in short order other key market leaders like Wellfleet, 3Com, and Synoptics, which then gave it the credibility to win additional lesser known companies.

they surveyed their client experience to date and targeted a very thin market niche: the regulatory affairs department in Fortune 500 pharmaceutical companies. Now there are only about forty of these in the whole world, and the largest is a few dozen people or so,

a year Documentum had demonstrated that it could solve this problem, and some thirty of the top forty companies had committed to its solution.

The italics immediately above are meant to answer the single most asked question of The Chasm Group: Can’t we go after more than one target? The simple answer is no. (The more complex answer is also no, but it takes longer to explain.)

Target customer: Is there a single, identifiable economic buyer for this offer, readily accessible to the sales channel we intend to use, and sufficiently well-funded to pay the price for the whole product?

Compelling reason to buy: Are the economic consequences sufficient to mandate any reasonable economic buyer to fix the problem called out in the scenario?

Whole product: Can our company with the help of partners and allies field a complete solution to the target customer’s compelling reason to buy in the next three months such that we can be in the market by the end of next quarter and be dominating the market within twelve months thereafter?

Competition: Has this problem already been addressed by another company such that they have crossed the chasm ahead of us and occupied the space we would be targeting?

So the rule of thumb in crossing the chasm is simple: Pick on somebody your own size.

Again, the concept is simple. For a given target customer and a given application, create a marketplace in which your product is the only reasonable buying proposition. That starts, as we saw in the last chapter, with targeting markets that have a compelling reason to buy your product. The next step is to ensure that you have a monopoly over fulfilling that reason to buy.

Augmented product: This is the product fleshed out to provide the maximum chance of achieving the buying objective. In the case of a personal computer, this would include a variety of products, such as software, a hard disk drive, and a printer, as well as a variety of services, such as acustomer hot line, advanced training, and readily accessible service centers.

To net this out: Pragmatists evaluate and buy whole products. The generic product, the product you ship, is a key part of the whole product, make no mistake. But once there are more than one or two comparable products in the marketplace, then investing in additional R&D at the generic level has a decreasing return, whereas there is an increasing return from marketing investments at the levels of the expected, the augmented, or the potential product. How to determine where to target these investments is the role of whole product planning.

As we often like to say about early software products, this system may be hard to use but at least it’s slow.

That’s where the product alternative comes in. You need to make clear to everyone involved that a technology shift is under way here, and that old solutions simply cannot hope to keep up.

Positioning is the single largest influence on the buying decision. It serves as a kind of buyers’ shorthand, shaping not only their final choice but even the way they evaluate alternatives leading up to that choice. In other words, evaluations are often simply rationalizations of preestablished positioning.

Positioning exists in people’s heads, not in your words. If you want to talk intelligently about positioning, you must frame a position in words that are likely to actually exist in other people’s heads, and not in words that come straight out of hot advertising copy.

When most people think of positioning in this way, they are thinking about how to make their products easier to sell. But the correct goal is to make them easier to buy.

position. A product with an uncertain position is very difficult to buy.

Remember, the goal of positioning is to create and occupy a space inside the target customers’ head.