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Are You Bringing Innovation to a Laggard?

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The Technology Adoption Lifecycle is something we’re all too familiar with as entrepreneurs. Popularized by Geoffrey Moore in his landmark book, Crossing the Chasm, Moore, points out the importance of selling to innovators and early adopters first.

But what if the industry you’re targeting is full of Late Majority and Laggards?

McKinsey did a landmark study on technology adoption by industry, summarized in this excellent HBR video. The report measures technology adoption across industries. It goes further to break down adoption into three components:

1. Spending on assets such as computers, software, networking and data management

2. Use of software for digital payments, digital marketing, and social and customer relationship management

3. The number of technology-related tasks and roles in each sector

Digital America
The report nicely illustrates that spending on information technology assets is an important component of a business’s technology maturity, but workforce receptivity, process changes and staff training are equally essential to a successful deployment. The report also shows that even within sectors on the left-hand side, adoption can lag based on the purpose of that technology. As entrepreneurs, we often overlook these considerations at our own peril.
 

In the diagram below, I have overlaid some of the McKinsey findings on the technology adoption lifecycle to illustrate the situation. Many Evidology Group clients are trying to bring innovation to the right side of the curve or to a lagging area of adoption within a specific industry. Not surprisingly, they’re running into challenges.

 

Below are five steps to help you gain a foothold and establish a customer base in late adopting and laggard industries. The Evidology Group can coach you through this process, adapting it to your specific situation. Contact us for our tools and best practices and we’ll show you how we can help.

5-Steps to Gaining a Foothold in a Laggard Industry

1) Conduct a rigorous customer discovery process

Any new concept starts with building a solid understanding of your customer. A rigorous Customer Discovery Process is even more critical for these late majority and laggard industries so that you truly understand if/why/what/how these customers buy. If you haven’t done this already, I urge you to do this now.

2) Find self-identified early adopters among those Late Majority and Laggards

Through the Customer Discovery Process, look for people you speak with who self-identify as interested in a solution to their problem. Probe to confirm they are interested in implementing a solution and not just learning.

To address inherent customer skepticism and to build trust, you need to reduce the perceived risk. This may require a realistic non-functioning demo and associated storyboard to demonstrate you have a solid understanding of their problem and how you intend to solve it. This will not only help them build confidence in your team but will also help them visualize and provide meaningful feedback on your solution. If your product is sufficiently mature, you may consider commissioning an academic research paper or independent consulting report that measures and proves your value proposition.

3) Uncover a simple yet valuable problem to solve at the outset

Start with a small but meaningful and quantified problem to show immediate benefit. For example “Reduce call center volumes by 10% while improving customer satisfaction by implementing in-app guided help.”

Avoid messages that are chasing technology trends or that use terms like “disruptive” or “innovative”. Formulate a compelling argument that your approach is a proven technology that solves a real problem. Perhaps point to other industries that have adopted the same technology with great success and point to the inevitability of adoption in this industry.

You may need to conduct a no-cost pilot and collect metrics that confirm your value proposition. Be sure to secure a commitment that if you hit those metrics, the customer will buy your solution.

4) Implement a Design Partner Program to build a tailored solution

Create a Design Partner Program to engage your lead customer in the design process.

Consult with your internal champion and users at every stage in the design process. Design your solution to minimize user training and workflow changes to ease adoption – even if it compromises the design. Involve them in Sprint demos to get their feedback to help you stay on track and give the customer a strong sense of ownership and trust in the team. Help the customer communicate the operational benefits of your solution to internal stakeholders and users to facilitate adoption.

Jointly agree on a roadmap to gradually roll out new functionality. Customers may expect a more complete implementation in the first release which impacts the scope of your Minimum Viable Product and product quality. Budget your time and money for deeper testing prior to implementation.

5) Celebrate your lead customer as an industry leader that others should follow

Promote your first customer as a showcase account and rely on your internal champion as the hero/spokesperson that others can see as a successful example.

Selling to the Late Majority and Laggards is a slow process that requires a lot of patience from you and your investors. The barriers to entering these markets can be daunting but once you are embedded and trusted, your ability to add more value over time and reap the benefits of a stable customer can be lucrative for startups that survive the perilous journey.

The Evidology Group has developed several tools and processes to help you achieve product-market fit. Contact the Evidology Group to see how we can help your business navigate the journey.

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