Leaping Laggards!

Clive Thompson of Wired discusses the idea that purveyors of high-tech gadgets may be ignoring a key market segment when they snub late adopters.

[Israeli academic Jacob] Goldenberg offers the following thought experiment. Imagine that John is a laggard who buys a Walkman and listens to it while he jogs every day. Eventually, the Discman comes along, but John doesn’t upgrade because he doesn’t see anything wrong with his Walkman and doesn't want to rebuy his music on CD. Then MiniDisc players come along, but John still holds on to his Walkman. Then, 16 years after he bought his portable tape deck, MP3 players become the hot new thing.

By now, though, John is finally starting to feel self-conscious about his huge, bulky Walkman, and maybe it's starting to break down. He's finally ready to buy a new music player, so he becomes -- ironically -- one of the first people to get an iPod.

Goldenberg calls this the "leapfrog effect," and he estimates that this previously unidentified market segment could nearly double the profitability for a new device should its makers take aim at people like John. The article goes on to show how this approach could make an iPad very attractive even to older consumers one could understandably describe as technophobes.

Goldenberg elaborates further.

"We realized that the definition of laggard is wrong," Goldenberg says. "In the case of multiple generations of products, they can just skip generations. So they can also be first."

I see this issue in a slightly different light. I think Goldenberg is on to something, but that he focuses too much on how quickly, relative to a product's release, someone decides to make a purchase. I would say that the early adopters that gadget makers tend to cater to include a large proportion of less-serious customers who basically want toys, or cachet, or just love almost any new technology and have money to burn. Marketing to these types of customer will often tend towards the superficial and might, in many cases, be almost unnecessary.

What Goldenberg is calling late adopters are the people who won't or can't let vanity or mere curiosity cause them to part with their money. They need reasons to purchase a high-tech gadget or service. What the marketers seem to be failing to do is to supply these people good enough reasons to consider buying their product.

New products and services will always have their skeptics who will, as I do in such situations, delegate testing for quality and usefulness to earlier adopters. But there are doubtless many people who merely pass as skeptics simply because their (lower) sales thresholds aren't being reached by advertisers. I think Goldberg is painfully close to rediscovering a legitimate purpose of marketing, which is to inform potential customers of the actual advantages of owning his employer's product or using his service.

-- CAV