Theory of Hierarchies of Technology Adoption

I’ve been thinking about technology adoption lately and trying to make a better connection between adoption theory and actual buying behavior. Classic marketing theory suggests that all new technologies go through a bell curve of adoption. While it’s a useful idea, marketers hunting for early adopters may struggle to find them. I think that’s because early adopters are not a defined, permanent group, and that buyers don’t view themselves as early adopters. Instead they have a self-perception of where they feel they should fit in a hierarchy of adoption. And it’s the purchasing decisions of those in that hierarchy which drives adoption. Overall, sales volumes may follow a bell curve, but individual buyer behavior doesn’t fit into such neat divisions.

Terminology varies slightly but in essence the typical adoption cycle starts with innovators who like the technology for its own sake; then early adopters who see how it can directly help and pay a premium price; the early majority, who follow the lead of the early adopters but are less willing to take the risk and pay such a high price; then the late majority who are more skeptical; and lastly the laggards, who are the most price sensitive and cautious.

Marketing techniques often focus on selling to the first two groups and then building enough critical mass to ‘cross the chasm’ to the early majority. The idea being that many technologies fail to reach that broader appeal and so only sell to a small segment of the market.

But who are these innovators and early adopters? For a long while I considered them to be a distinct group who realized they were innovators and regarded themselves as such: “I am an innovator, and as such happy to buy a Sony PSP,”  – or whatever the latest technology might be.

And I had thought that innovators where consistent in their behavior such that they would buy the latest home entertainment system, use the latest social networking software, buy the latest hardware at work etc. Being an innovator was a trait like intellect, sense of humor or hair color. I felt being an innovator was a universal behavior for that select group, certainly when it came to technology.

But the picture is much more complex. Being an innovator is dependent on attitude to risk and ability to pay. Of course, if you can’t afford the latest technologies (whether personally or corporately) you can’t fulfill demand and are therefore pushed back in the adoption cycle to a later stage.

Attitude to risk though is more fickle. It varies over time as a result of a huge variety of factors, such as personal circumstance, socio-economic environment, political and legal framework. I may be an early adopter now but if the government changes or if the country goes to war, I may feel more cautious. And that means markets may evaporate when targeting these early buyers.

Not only does my attitude to risk change over time, but also by product category. As a personal testimony, I am on paper a classic early adopter – male, technically-oriented, reasonable disposable income, connected, informed, right age-group. In my innovator guise, I helped implement Instant Messaging in my firm when it came out, we adopted as one of the first European customers, I blog – all innovator proof points.

But in other aspects of my purchasing I’m an early or even late majority customer. It was only this year that I bought a TiVO, I’m still using my first digital camera which I’ve only had for 12 months, I waited for the Click-Wheel iPod to come out before buying one. In short I’m inconsistent in my purchasing. But that’s entirely consistent with consumer behavior.

For marketers this presents a problem – innovators are only innovators for certain product categories and at certain times. It’s a moving target, and in fact, I wonder whether it’s a specific target at all now – are there really innovators out there?

Instead of specific stages of adoption, I think there is a Hierarchy of Adoption. I have friends and acquaintances who I consider personally to be early adopters. Call them what you will (maven etc), but this group influences my purchasing decisions. If they have a technology then so should I.

Equally, I have a group of friends who I consider to be late adopters, these people are beneath me in the hierarchy of adoption from my perspective. If I see they have a product which I’m yet to purchase, then it’s a sign that I’m becoming a Luddite and must catch up. This is commonly called ‘keeping up with the Joneses’ but I think it’s more solid as a buying behavior, not simple jealousy. My innovators and my late adopters are real to me and influence my purchasing decisions.

My hierarchy of adopters though is not the same as yours. You may consider my early adopters as laggards. You may be higher up the overall hierarchy than me. Or below. So our personal hierarchies are nested in a continuum of overlapping perceptions. Your innovators’ purchase drive your own, and that in turn drives mine, and those that see me as an innovator will follow suit.

In a sense then we are all innovators and laggards in our own social hierarchies, which explains the conflicting behavior I describe above. I bought a TiVO recently because an innovator friend of mine testified to how good it was. Until then, none of my network had one. I had no innovator to follow or laggard to push me to purchase. Was he one of the first to buy a TiVO? No, probably about customer 2 million – but to me he innovated. Or in another example, I started blogging and now several people I know are following suit. As a group, we might all be early into the game compared to the general population, but to them I’m the innovator.

So if you can’t find the innovators in your market, it’s because they are not a distinct group. Everyone is an innovator sometimes.

As a marketer this tells me some basic lessons:

•    Always educate – you need to reach out to each innovator in each hierarchy
•    Focus – find the segments where the adoption wildfires might start and light them
•    Evangelize – once adoption starts look for ways to increase the transmission of that adoption
•    Be versatile – different hierarchies might buy for different reasons so adapt your message
•    Move quickly – your market may vaporize or appear suddenly elsewhere, so be ready to act
•    Convince and cajole – use the push from laggards as well as the pull from innovators