Mastering Diffusion To Turn Innovation Into Market Success

Imagine spending a large proportion of your R&D budget perfecting a new product ahead of launch, one that is destined to make your competitors' offerings look like they came from the Stone Age. Your beta testers love it, and your sales team is excited.  You plan a lavish launch, and the initial reaction is positive.

 

However, as the sales numbers roll in, they are just a fraction of projections, and as the weeks and months roll on, it is increasingly apparent this category-redefining product is a flop.

 

According to research published by Cass, up to 90% of really new products fail.

 

The Diffusion of Innovation

Everett Rogers, Professor and Chair of the Department of Communication & Journalism at the University of New Mexico, was perhaps the first to explore why some transformative innovations fail to make an impact and why others are wildly successful. His theory of the diffusion of innovations, popularised through the book The Diffusion of Innovations, explains how a new idea, product, or technology gains momentum and spreads through a population.

 

According to Rogers, diffusion is the process by which an innovation is communicated over time among the members of a social system. The most striking feature of diffusion theory is that, for most members of a social system, the innovation-purchase decision depends less on the benefits of the new innovation but rather on the innovation-purchase decisions of the other members of the system.

 

Research shows the successful spread of an innovation follows an S-shaped curve, with those purchasing in different phases of the curve falling into different adopter groups.

 

1. Innovators (2.5%): The first to try. The innovators are the risk-takers. They are enthusiastic and willing to experiment with new technologies even before most people know they exist. They can also lead product and marketing teams astray as to how popular a new innovation will ultimately be.
2. Early Adopters (13.5%): Early adopters are opinion leaders who are quick to adopt innovations but are also calculated risk-takers. They set the tone for the market and need to see personal benefit from supporting a new innovation.
3. Early Majority (34%): The early majority are more deliberate in their approach; they only adopt an innovation once it has proven its capability and reliability. For many, the need for reliability lies with both the innovation and the supplier.
4. Late Majority (34%): The late majority are sceptical and often only adopt due to social or economic pressure.
5. Laggards (16%): These are the traditionalists who prefer to stick with the old ways until they’re no longer viable.

 

Crossing the Chasm: From Early Adopters to Early Majority

While many assume that innovations diffuse smoothly through populations, with momentum slowly building, the reality shows there are some significant challenges faced by technology marketers, the biggest being the gap between early adopters and the early majority – often referred to as the chasm.

 

Innovators and early adopters are typically more willing to take risks, seeing the potential value in innovation.

 

However, the early majority - the next crucial segment - requires proven value, reliability, and usability before they commit. If a company fails to address this gap effectively, its innovation might stall, stuck with the early adopters without ever reaching mass-market success.

 

 

While there are many marketing tactics that can be explored to aid innovations across the chasm, there are six key factors that influence innovation adoption: Relative Advantage, Observability, Trialability, Compatibility, Complexity, and Perceived Risk.

 

 

To successfully position an innovation, it's crucial to ensure that all six of the following factors are well supported. The table below outlines the key questions your team needs to answer for each of your adopter group personas.

 

Diffusion Factor	Key Questions To Ask
Relative Advantage The greater the perceived advantage, the faster the diffusion.	What new benefits does the innovation offer? Does it cover all the benefits of existing solutions while offering additional value? How does it perform in terms of financial, time-saving, or operational improvements?
Observability The easier it is to observe the benefits, the faster the diffusion.	How can the benefits of the innovation be demonstrated tangibly? Are there ways to make the impact of the innovation visible through metrics, customer stories or case studies?
Trialability The easier it is for users to test the innovation, the faster the diffusion.	Can customers easily trial the innovation to experience its benefits firsthand? Is there a pilot or small-scale version available to build trust and demonstrate effectiveness?
Compatibility The closer the match to existing products or practices, the faster the diffusion.	In what ways can the innovation align with customers’ existing processes or behaviours? Can integration with current systems be simplified to reduce friction?
Complexity The simpler the innovation, the faster the diffusion.	How can the product be designed to ensure simplicity and usability? Can we build customisation options without introducing unnecessary complexity?
Perceived Risk The lower the risk, the faster the diffusion.	What are the perceived risks associated with adoption from the customers’ perspective? How can these risks be minimised through support systems, guarantees, or proof-of-concept testing?

Crossing the Chasm

When bringing innovative new products to market, companies must master the art of innovation diffusion. By understanding the factors that influence adoption and effectively "crossing the chasm," businesses can maximise their reach and impact.

 

It’s not just about creating products that not only meet customer needs but also minimise risk, demonstrate value and make the benefits and usage observable.

 

Diffusion analysis provides a roadmap for marketers to navigate the perilous journey across the chasm; if you or your team would benefit from a guide on this journey, we'd be happy to help.