Entrepreneurial Marketing: An Effectual Approach Prof. Dr. E.J. Nijssen, Eindhoven University of Technology Available from Routledge at: https://www.routledge.com/Entrepreneurial-Marketing-An-Effectual-Approach/Nijssen/p/book/9781138712911 Session 4: Understanding adoption and leading customers

Objectives Introduce the technology adoption life cycle Diffusion and potential chasms Understand customer adoption Importance of leading customers Understand customer reluctance to adoption of new products/services

Technology adoption life cycle 2.5% 13.5% 34.0% 16.0% Innovators Early adopters Early majority Late majority Laggards time population Skeptics Conservatives Pragmatists Visionaries Enthusiasts Adpated from Rogers (2003); Moore (2006)

Difference between innovators and early adopters Venturesome Technology enthusiasts and not scared off by technical difficulties or deficiencies Generally strategic rather than pure economical considerations drive behavior Danger that behavior is only motivated by love for technology More rational and thus more skeptical; more pragmatic Looking closely at market trends and opinions of leaders, maverics Focused on quality of the solution and economic gains

Populations’ homogeneity/heterogeneity explains diffusion pattern Time Penetration levels Slow diffusion 100% 0% Rapid diffusion Moderate diffusion Delayed diffusion

Potential chasms Chasm Innovators Early adopterss Early majority Late majority Laggards Time Adapted from Moore (2006)

Roger’s model of adoption Perceived innovation characteristics –Relative advantage –Compatibility –Complexity –Observability –Trialability (other factors, e.g., social influence, uncertainty) Other factors –Organization size –Competitive environment –Business network Adoption process Awareness Consideration Adoption decision Adpated from Rogers (2003)

Extended adoption model of leading customers Awareness stage (Information sources) Reference customer info Reliability of reference information Fit reference − innovator context New technology venture info Expert sentiment and info Consideration stage Affordances Relative advantage Compatability Complexity Trailability Observability Liability of newness Technology risk Adoption decision Innovator enthusiasm New venture characteristics Application characteristics Adapted from Wouters and Nijssen (2011)

Who to target? Who benefits from your solution? Is there a manifest or latent problem? Can you create a new ideal/standard?

Generic model: Problem-solving behavior Post-purchase behavior and re-evaluation Search information on alternatives Evaluate alternatives Problem recognition Purchase

Routinized vs. new task buying Decision Problem-solving behavior New task Modified buy Straight rebuy Extensive problem solving Limited problem solving Routinized problem solving Manifest problem Latent problem/ new standard

In organizations: Decision Making Units (DMUs) 12 Often multiple people are involved in the decision to adopt a new product (stakeholders) Roles include gatekeeper influence decider buyer user Determine who is sensitive to which arguments. In the end you will need to pursuade all stakeholders involved

Lead users Lead user can help validate your assumtions about initial target market Help to develop prototype Help to iron out kinks of the design Help interest and persude subsequent customers Co-finance the effort, reducing risk and enhancing affordable loss

Hierarchy of innovation rejection by innovators ■ Changing usage pattern ■ Economic risk ….and ■ Functional risk ■ Social risk ■ Poor image ■ Conflict with norms and traditions ■ Risk of physical harm Postponement Rejection Opposition Increased level of resistance Adapted from Keijnen, Lee and Wetzels (2009)

Lessons Customers differ in innovation propensity Particularly interesting are venturesome innovators that are willing to co-develop Understanding these customers is important; target the right person in the organization, while not neglecting other members of the DMU Be aware of potential chasms; anticipate adjusting your marketing effort over time/over the different groups of the innovation life cycle People may resist an innovation for different reasons