Out of the Wharton School we have a nice piece of behavioral research on the effect speed of Adoption has on longer-term commitment. The article, The Long-term Downside of Overnight Success, describes research finding “the adoption velocity has a negative effect on the cumulative number of adopters”.
This research dovetails nicely with a lot of the topics discussed here on the blog lately, so I thought I’d use it (with a nod to Godin’s post on Strategy vs. Tactics today) to provide some fodder for thought.
First, the importance of Psychology in Marketing. So many of the “discoveries” arrived at through brute force testing of Online Advertising are already well known in the greater discipline of Marketing through Psychology. For more on this read “The Other 3P’s” and if you’d like to do something about lack of knowledge in this area, make sure to read this comment on source books.
Second, this research is a great example of isolating the true drivers of behavior. The idea of looking at baby names to isolate the real behavior from “technology and other commercial effects” while including “symbolic meaning about identity” results in a broad, Strategic-level answer to the question, not a Tactical one.
Why is this important? It means the results can be applied across a host of different Marketing situations, rather than only a specific one.
Much of the “research” done on web topics suffers horribly from pointing to rare, specific successes as a model for everyone else to follow. Might be OK for Advertising people, gives them a low risk excuse to play with a Tactic. Useless for Marketing people, who have the Strategic need to describe results before they happen.
For the analysts out there, Strategy is the Hypothesis. Do you just create tests aiming for brute force pass / fail, or do you follow the scientific method and have a Hypothesis before you design the test?
Third, the whole issue of web business models, which always seem to be built on the concept of Quantity versus Quality as the Strategic vision. These models are about the fastest growth rates, total sign-ups, and traffic. The problem with this approach is this: it’s only really meaningful if “Reach” Advertising is the core business model.
That’s where the trouble is: successful Advertising on the web is not about Reach and Audience, it’s about Preference and Individuals. This is the paradox of Display Advertising in Social Media; it’s exactly the wrong approach as defined by everything people say is “Social”.
And, this is why you find that over time, almost every “new” business model that starts as some kind of a mass concept fails until it turns into a vertical concept – the exact opposite of the Quantity / Reach model. By going Vertical, the model moves from Quantity to Quality and then often succeeds – by serving a smaller, select group of people with certain preferences, building Relationships.
Why? Because, as stated in the Wharton piece, “the adoption velocity has a negative effect on the cumulative number of adopters”. Begging the question: Is your product more like a disk drive, that lacks any cultural identity? Or is your product “in a domain where people use it to communicate to others” like Fashion? Auto? Decor? Social Media?
The former begs rapid adoption, the latter, slower adoption. Anything Social, it seems, would benefit from a slower adoption rate. Paradox, again, right? That’s the difference between Strategy and Tactics, the difference between Marketing and Advertising.
I can hear some of the cat-calls now. Jim, we’re all about scale, the VC’s say we have to grow rapidly, it’s the way the business model works. Network effects, you know. Really? Is a larger network always better than a smaller one?
What if you (and they) are wrong? What if the Reach model is the wrong one for the web? After all, it’s an offline, one-way model.
What if rapid growth actually destroys the value of the business, by attracting the “me-to” crowd that abandons the trendy in favor of the new? What if the early adopters provide a false read on what the important business drivers are, and in fact are your worst customers?
How many of those millions of accounts are dormant? How long has it been since the early adopters came back?
What’s your Adoption Strategy?