Sep 09
27
Selling New Products
But it usually makes more sense to aim new products at the Innovators and Early Adapters. Innovators are more likely to take a chance with a new product or new technology. And because innovators are usually, though not always, small companies, they make purchase decisions more quickly. Moreover, the actions of Innovators influence all the others. Innovators spread information about the product through word of mouth. If Innovators buy a product, others are likely to follow suit. So selling to an Innovator might actually bring more credibility than selling to a Laggard, even if the Laggard is many times larger and better known. As Innovators influence companies downstream in the adaptation sequence, credibility for the product grows and grows.
A comment from a senior vice president at General Electric backs up this idea. GE is a major Intel customer, and I would classify it as a Late Adapter. GE made a commitment to use Intel’s 8086 microprocessor in a variety of its products. But when I talked to a senior manager at GE in 1982, he was getting nervous about the decision. He noted that many innovative companies in Silicon Valley, including Apple and Fortune Systems, had decided to go with Motorola’s 68000 microprocessor. Intel’s 8086 still had dominant market share, and its customer list included many major companies. But the Motorola chip took on a certain aura. As the GE executive said to me: “Those startup companies in Silicon Valley are capturing our imagination. If we had to make the decision today, we would not go with the 8086.”
Large companies can sometimes afford to wait until Laggards begin to buy a product. Then, they can sell in large volumes to the Laggards. But small companies cannot afford to wait for the Laggards to come around. They must target the Innovators, preferably the most visible of the Innovators. If I were a startup selling disk drives, and I could choose to sell to Apple, Xerox, AT&T, or a startup like Metaphor, I would probably choose Apple and Metaphor. The order might be for fewer drives, but my reputation would be established. Rather than spending millions of dollars on promotion, I could simply rely on word of mouth.
Of course, identifying the Innovators in an industry is not always easy. Not all Innovators are small. Some pockets of large organizations are Innovators. At banking giant Citicorp, for example, the MIS division is an Innovator. At Xerox, some divisions are Innovators, while others are Laggards. So you must understand the organizational forces acting within large companies to decide whether or not to target certain divisions. Intel has an Innovators Program that identifies which divisions at other companies are Innovators, and which are not. Other companies might benefit from similar programs.
