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The Biggest Problem With The SaaS Product Adoption Life Cycle

By William Steward on Mon, Aug 3, 2015

If you're building a SaaS company, you may have seen the product adoption life cycle before. It's a smooth curve that breaks the people who buy new technology solutions down into 5 key segments:

adoption-lifecycle

It explains how initially innovators buy your solution, followed by the early adopters, early majority, late majority, and finally, somewhat reluctantly, laggards. 

However, there's a big problem with using this model to determine your SaaS company's marketing strategy, and if you're not careful, it could lead to your company's downfall. 

The Chasm

A couple of weeks ago I finished reading Geoffrey A. Moore's excellent book, Crossing The Chasm. He's dedicated a huge amount of his career to studying the technology adoption life cycle, and determining what makes people buy new technology. 

The biggest learning to be taken away from the book is that the technology adoption life cycle is flawed. Rather than being a completely smooth curve, with adoption of a product smoothly progressing through the different market segments, it actually has a number of gaps in it:

chasm

The cause of these gaps is actually quite simple. Each segment of the market is looking for different things when they buy technology. The bigger the difference, the bigger the gap:

  1. Technology Enthusiasts are looking to get the latest technology first, and don't really care if it doesn't work properly or convey much benefit.
  2. Visionaries see the potential for exponential benefit made possible by implementing the new technology, and want to have influence in shaping the technology to fulfill their vision.
  3. Pragmatists only buy technology when there's a proven benefit to using it established already.
  4. Conservatives only buy technology when they think they'll experience loss by not adopting the product. 
  5. Skeptics only buy technology when they absolutely have to, often meaning when it's bundled in with something else they already use. 

When you read those descriptions, it becomes clear that the biggest gap is between the visionaries and pragmatists.

This gap presents a huge challenge to SaaS companies like yours. How do you move on from selling to visionaries, who are happy to deal with an unfinished product, and see the technology as part of a big vision for the future; onto the pragmatists, who want to see concrete, incremental benefits from implementation? 

The Solution

Geoffrey states that the best way to minimise the size of this issue is to specialise. Why? Quite simply, by initially specialising in a niche industry, you build up case studies and experiences among technology enthusiasts and visionaries that the pragmatists can use to determine whether they buy or not. 

If you go broad with your initial targeting, you end up with 1 case study in one industry, another somewhere else, and not nearly enough concrete evidence of a benefit to persuade a pragmatist to buy. By cornering a small segment of the addressable market, you can develop a multitude of similar case studies which will more effectively convince pragmatist buyers. 

So be weary of the chasm as your SaaS solution matures. If you're building a CRM system for everyone, take a step back. You'll have a much bigger chance of success by going niche, cornering one segment, and tackling additional segments as the company grows. For a more thorough insight into how this works, and additional ideas for closing the gaps, buy the book. It's the first book I recommend to any SaaS marketer.

Want to learn more about the most effective way to market SaaS companies? Download my free 71-page eBook, Inbound Marketing for SaaS Directors by filling in the form below.

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