Why innovators can give new products more mileage

People, internet, and communication. Happy young man in the city typing on his smartphone.

By Dr Kenichi Ito

When planning a campaign to launch a product, the common perception is that early adopters – that elusive group of consumers willing to try new items – should be the priority. But companies should not overlook the innovators, another small but powerful category of consumers that marketers focus on when the new product is particularly innovative and disruptive.

Innovators and early adopters are motivated differently.

Early adopters are generally of high social status and are well-educated, but are more careful about who to share the information with about innovative new products. Early adopters primarily try products that they can benefit from, and tend to share what they know about new, innovative products if it helps to promote themselves.

Like early adopters, innovators also love to try new products, but they tend to have the highest social status and affluence, and are thus in a stronger position to withstand risks. As such, they are less risk averse, and are willing to experiment with new ideas even if it results in failure.

Despite their small numbers, the innovators’ willingness to try anything and natural word-of-mouth behaviour is why they are so important for marketers of disruptive new products. Innovators are prepared to try almost anything that gives them the chance to be a pioneer, and crucially, the chance to tell others about their new “discovery”.

In the digital savvy nations such as Singapore, where three in four Singaporeans use social media, more and more companies are tapping on influencer marketing to reach their target audience effectively. Consumers tend to trust recommendations from people they know more than advertising.

This tendency is especially strong among Singaporeans who are in-group oriented and generally fearful of missing out. So, if innovators can be reliably targeted, the product has a better chance of being accepted by more sceptical audiences.

What makes innovators tick

But to tap the potential of innovators, we need to understand their psyche. A study I conducted with my colleagues at Nanyang Technological University, Singapore has shed new light on how innovators think.

Our research tested if a stable lifestyle is the key factor required for consumers to become innovators. To test this, one group of participants was told to imagine themselves in a stable environment where they would live in the same community for the next decade.

Another group was told to imagine that they would need to relocate every two years. Both groups were then asked to make 15 purchase decisions between an innovative new product or a conventional counterpart, such as a bottle of premium alkaline water versus conventional mineral water. The results showed that participants in the stable lifestyle condition reported a higher intention to purchase than those in the control group. They also showed a higher likelihood to discuss the products with family and friends.

The study suggests that a stable lifestyle contributes to three key attributes of innovators: they want to excite their lives with new products; their stable surroundings give them more opportunities to build long-term relationships; and this in turn makes them want to talk about the new product with family and close friends.

Although the psychological characteristics of innovators are well-documented, researchers and marketers rarely consider lifestyle attributes, such as stability, that lead to the development of these psychological characteristics.

Many tech start-ups understand the important role innovators play in spreading the word about a new product.

One example is music streaming company Spotify. Its marketing tactics usually involve a pre-launch phase that doesn’t use standard advertising, but attracts users with an invite-only strategy to a select group that includes music and technology journalists.

Spotify then relies on the media coverage this generates and the fact that each new user can send an invite to use the service to a limited number of friends. Spotify then uses the feedback from the innovators to refine the platform for each market and develops specific local initiatives such as a haze-themed playlist in Singapore, or hosting interactive concerts featuring local artists in the Philippines and Hong Kong.

Later, when they are confident that they understand the needs of the local market, they move into a full launch ad campaign with mass-market appeal.

This by-invitation-only tactic appeals to innovators because they can become one of the first to use the service and share their “discoveries” with their community. Innovators have strong real-world connections with a small group of people, whereas online influencers have a weaker influence on a larger community.

But understanding what makes innovators tick is the challenging part. The number of innovators varies from country to country, depending on factors such as population size, the level of affluence, and cultural preferences. But in general, innovators are a very small group – about 2.5 per cent of all consumers in a market. This means building up detailed profiles of them can be quite a task. But big data would allow marketers to resolve this.

For example, a mobile phone manufacturer is planning to launch a new phone with a large foldable screen across several Asian markets. Their competitors have also developed similar technology, but none are confident that the market is ready. The phone will be launched with a high price point and the manufacturer does not expect it to gain mass market appeal.

A big data approach could be used to identify innovators in the mobile phone market and target them with strategies that go beyond standard advertising campaigns. The manufacturer could use customer data from its most recent launches and combine it with publicly available data –their backgrounds, interest groups they follow or belong to, and websites, books, movies and TV shows they like – from social networks such as Facebook, Twitter and LinkedIn. Although Twitter accounts are public, such data mining may not have access to profiles on other platforms which can be private. But it should provide enough data to help identify a core group of innovators.

Discover attributes

The analyst can then go deeper and uncover less obvious attributes that are unique to the manufacturer’s customer base, such as the obscure but influential bloggers that innovators follow.

This can uncover unknown customer attributes that can lead to new strategies that appeal to existing innovator customers, and crucially, new customers who are like them.

Armed with a detailed profile of their innovator consumers, the manufacturer can use the information to plan their marketing and publicity strategies and ensure that their new phone reaches the most influential bloggers, tech sites and reviewers.

To test if this strategy is cost-effective, the manufacturer could launch the phone simultaneously in two similar Asian markets – one using the data-led innovator strategy, and the other a standard ad campaign. This technique could even be used to identify and predict the exact point in a person’s life when they are ready to become an innovator in the mobile phone market – and target them before they have considered a competitor’s handset.

Such new insights could enable marketers to identify and target innovators far more accurately, and in turn formulate more effective marketing and publicity strategies for their products.

This article first appeared on The Business Times on Thursday, 6 July 2017.

Download Full Article >>

Authors: Dr Kenichi Ito
Date: 7 July 2017

About the Author

Dr Kenichi Ito is a Fellow of the Institute on Asian Consumer Insight (ACI) at NTU Singapore, and Assistant Professor in Psychology at NTU’s School of Social Sciences, His research focuses on the different perceptions and processing styles of consumers from different cultures.