The Fundamental Customer Acquisition Plan for Winning Over Customers
The previous discussion looked at the Technology Adoption Life Cycle – a model which illustrates the introduction of new products to the market. When launching innovation, in whichever form, a gap exists between the early adopters and the mainstream consumers. The mainstream represents the general population, and is ultimately where growth and profit lay; however the people within it are very conservative, and will generally not buy until they have seen other people using the product. The only suitable reference for people in the mainstream market, are other people who are also in the in the mainstream market. As a marketer, how do you go about with getting people in the mainstream market to buy your product, when they are not interested unless other people like them are already using it?
Planning your Customer Acquisition
Introducing new products requires very strategic customer acquisition planning. Mainstream consumers are very reference based, and will generally not buy until the product has been tried, tested, and has several pre-existing users who they can use as trustworthy references. This creates a puzzle; how do you go about with selling to a group that will not buy unless others like them have already bought? How do you appeal to the first set of customers? The foundation of this challenge boils down to the nature of the general consumers – pack animals; and as such, their decisions are often influenced by other people around them. The pitfall (as illustrated on the technology adoption life cycle model below) has seized very many promising businesses, and once inside, some of the challenges may include a lack on new customers, several competitors fighting for the same space, limited access to financial services, and very slow growth (if any). Businesses that stay in the pitfall for too long ultimately never manage to find their way out.
Escaping the chasm
Trying to escape the perils of the pitfall and make an entry into the mainstream market ultimately positions you as an intruder. The predominant competitors will notice your attempt to steal their customers, and therefore secure their territories. The consumers themselves will be suspicious as your product is yet to be fully tested and accepted. No one is comfortable with your presence – you have to plan the attack very carefully.
The blueprint for getting across the pitfall involves targeting a very small and specific segment in the market, slowly winning over the consumers within it, and then using them as a base for acquiring the next segment, then the next – up to a point where your product positioned as the dominant leader in the market. The process is called market segmentation (the topic of the next discussion).
The first step in market segmentation is to establish the niche that will be targeted, and then launching the invasion by focusing an overwhelming force until the niche is fully acquired. An ideal segment to is one that is small enough to win over, but large enough to matter. Uber started out by offering free rides to early adopters during events in San Fransisco, and from that niche (small enough to win over, large enough to matter), grew to the mainstream market within the city, and in a similar fashion, to several major cities around the world. Targeting a smaller niche out of the broader market ultimately simplifies the customer acquisition process when attempting to break into the mainstream market.
The more tightly bound a niche, the easier it is to create and introduce messages into it, and the faster it is for the message to travel through word of mouth. Focusing your resources on a small niche helps develop a solid base of references, whereas directly targeting the broad market is a very expensive procedure as the marketing messages get diluted and word of mouth gains no momentum. Word of mouth is too important to let die out. The goal when targeting smaller market segments is to create a customer base in the mainstream market; one that will essentially fuel the word of mouth momentum, and help pave the way for the acquisition of more mainstream customers . Consumers in the mainstream are like pack animals – their decisions are highly influenced by other people.
To gain the trust of the initial segment, it is imperative to ensure that the products or services have features and benefits that will exceed the buying expectations in several ways (as discussed in A Strategy for Developing Products so Good they Sell Themselves). Superior products easily sell themselves through word of mouth, and the journey to the mainstream market must only be undertaken after the products are superior to the competitor’s.
The late majority consumers in the always opt to buy products from established market leaders. For instance, they will buy the same brand of products every time at the supermarket because those brands have assumed the position of market leadership in their head. Market segmentation means focusing all available resources on customer acquisition efforts which are targeted at a small niche, until it is completely ‘owned’. By owning a niche, you ultimately become its entrenched leader. By being its leader, the customers will always prefer you over your competitors. The basis of the next discussion is the process for selecting the segment.
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