A few years ago, when I was active in the field of knowledge management, a friend of mine turned me on to the book Diffusion of Innovations by Everett Rogers. It’s not generally known as a business book, but as a sociology and communications textbook. You may, however, be familiar with some of the concepts within it, which were popularized by books including Geoffrey Moore’s Crossing the Chasm and Malcolm Gladwell’s The Tipping Point.
Much of the book is focused on how innovations — or more simply, new ideas — are spread within social groups, whether it be an aboriginal village, a national culture, a large business, or a demographic segment. If you take the time to read the whole thing, you’ll find it offers significant business insights in the areas of marketing, change management, and even sales.
In Diffusion of Innovations, Rogers defines five characteristics of an innovation that influence an individual’s decision to adopt or reject it. Think of an innovation as a new solution to a problem that person is facing, and it’s easy to see the parallel to the buying- decision process. While it’s true that all buyers have their own unique sets of circumstances and decision criteria, these five characteristics offer an excellent checklist for both your overall marketing strategy and the individual sale:
Relative advantage is defined as the relative benefit of your solution compared to all other alternatives, including that of doing nothing. This is where most marketers focus their efforts — it’s the familiar territory of features and benefits lists, ROI analysis, and competitive comparisons. Price also falls under this category. However, as anyone who’s spent any time in sales will tell you, relative advantage simply doesn’t always make the sale. You can show a clear return on the investment, look better “on paper” than your competitors, and still not get the sale. That’s because there are several other psychological factors at play that aren’t purely rational.
Compatibility is a measure of how easily the new idea can be assimilated into an individual’s life. This can be a simple matter of logistics, such as not having enough room for a larger appliance; taste factors, such as the customer not liking black, and your product only comes in black; religious factors, such as your product being kosher or not; psychological factors, such as whether your product fits the customer's self-image; or cultural factors, such as the name of your product having an unusual translation or the primary value proposition not being as relevant in another culture. Defining your ideal customer will help you address this. Make sure you consider psychographic characteristics as well as demographics: What’s important to them? How do they see themselves? Will your product support or conflict with customers' sense of identity? Will it help them satisfy a fundamental human need that for them is currently unmet?
Simplicity is a measure of how easy the product is to use and understand. Rogers refers to it as complexity in the book, but you’ll find it more useful to think of it as simplicity, so that, as with the other four factors, a high score is better. There’s an old saying in business that a confused mind says “no.” Complexity equals doubt. Even if something is “understandable,” the matter of having too many choices can cause potential customers anxiety over whether or not they’re making the right choice. Be prepared that the more complex your product, the longer the sales cycle will be, the more skilled and trained your sales staff will need to be, and the more in-depth your marketing materials will have to be in order to explain it.
Trialability is how easily your product or service can be experimented with on a limited basis before purchasing it. A car can be taken for a test drive. Software applications can offer free trial periods. Food manufacturers offer free trial sizes or in-store tasting samples. Gyms offer a free visit or a heavily-discounted first month. Lawyers offer a free initial consultation. Thousands of products offer a money-back guarantee. There’s a reason for all of this — it works. How can you apply it to your business? What can you do to give people a free sample or no-risk trial? If you’re not currently offering one, I can practically guarantee you that doing so will increase your sales.
Observability is the degree to which the results of an innovation are observable to others (or to you during the trial). For example, it’s very difficult to directly observe the results of taking vitamins. Even if you see healthy people who attribute their health to vitamins, it’s not an independent variable, i.e., they’re probably also eating healthy and exercising regularly. On the other hand, I’m sitting here watching a late night infomercial for P90X (a popular home exercise system), and the before-and-after photos and customer home videos and testimonials are highly compelling. It’s no surprise that their infomercials have won both Telly and Moxie awards — they nailed it in the observability factor.
So how do you apply these five factors as a marketer?
First off, use it as a checklist at every level of your marketing and sales process: product strategy, sales process, campaign, and individual sale. Even if your overall strategy incorporates all five factors, you still have to check it at each level. Do your website and other marketing collateral sufficiently address the complexity of your product? Is some sort of free trial a part of your standard sales process? Is the language of a given campaign compatible with its intended audience? Has this particular prospect been able to observe the advantage which is most important to him during their trial of your product?
Ideally you address all five factors at every level. However, it’s possible that your product may be intrinsically weak in one of these areas. If so, you have a couple of options. The first is to target your marketing to ideal customers for whom that factor is not as important. For example, early adopters generally do not require high observability or even trialability — they are sold on the relative advantage and the benefit of being seen as an early adopter (compatibility). The other option is to focus on making your offering strong in the other four factors — compelling enough to overcome the weakness in one area.
So, will you adopt this method?
1. It will help you sell more. (Relative Advantage)
2. It sits easily on top of any other sales and marketing methodologies. (Compatibility)
3. It’s simple — five concepts easily communicated in one short article. (Simplicity)
4. It’s easily tried on your very next sale or next marketing campaign. (Trialability)
5. The results may be difficult to attribute to this one change, but if your results are any better than “normal,” why wouldn’t you keep using it? (Observability)
Scott Allen is Vice President of Marketing for OneCoach, a business growth coaching and consulting firm that helps successful entrepreneurs achieve even more. He is coauthor of The Virtual Handshake: Opening Doors and Closing Deals Online, The Emergence of The Relationship Economy, and a contributor to over a dozen books on entrepreneurship, marketing and social media.