Innovations do not spread automatically on the market. On the contrary: innovation initially means change, which most market participants are not exactly waiting for.
As early as 1962, the scientist E.M. Rogers recognized that there is a certain systematic approach to the spread of an innovation on the market (known as diffusion).
This is because we humans have different levels of willingness to try new things. Accordingly, Rogers found that (technological) innovations on the market spread sequentially among 5 psychographic characters.
Normally, this results in a diffusion curve in the form of a more or less steep "S", in which the rate of so-called innovation acceptance or adoption by users initially tends to be flat, before rising rapidly at some point and then falling again.
- In this logic, the first people to adopt innovations are called "Innovators"They are open to risks. Think of people who spend the night outside the Apple Store in order to be among the first proud owners of the new iPhone the next morning.
- The innovators are followed in diffusion by the "Early adopters" (Early adopters.) These are people who are interested in trying out new technologies and establishing their benefits in society.
- In the 3rd phase, the innovation meets the "Early majority" (Early Majority:) These are those who pave the way for the use of an innovation in the majority society as part of the general population.
- The following "Late majority" (The "Late Majority" adopts innovations as part of their daily lives with the general population.
- The final stage in the dissemination of innovation is the "Latecomer" (Laggards.) These people lag behind the general population when it comes to adopting innovative products and new ideas, as they are very risk-averse. In many cases, they only jump on innovations when there is no other option. It is questionable whether it is even possible to speak of an "innovation" at this point.
In the adoption process, innovations compete against existing and competitive innovations, as potential users generally have the choice of what they want to adopt. We are currently experiencing such adoption with the spread of artificial intelligence (AI).
The nature of an innovation and the structure of social networks are decisive in determining which market participants adopt an innovation and when.
So how can you build trust so that customers decide in favor of an innovation as quickly as possible?
Here are a few starting points:
- User People's needs The company's own willingness to innovate varies. From the company's point of view, we must therefore first clarify who it is that should actually accept our innovation. This means we need to take a closer look at our customers and consider who falls into which of the above categories. Customer trust is not an absolute construct; the perceptions of different groups of people can vary greatly.
- According to Rogers, innovators (who make up less than 3% of the population) are particularly pleased to be "on the cutting edge". Other groups require more persuasion, for example because they fear that an innovation will require them to change their habits.
- Social norms play a different role in the individual adopter groups. This is low for innovators. However, the need for the innovation to be compatible with habits and values increases as diffusion progresses. Taken together, the social environment and the characteristics of the innovation can be seen as sociological and psychological barriers to adoption that need to be removed. It is therefore worth "addressing" the norms in the innovation that are important to each adopter group in order to reduce the risk of these values being compromised by the innovation.
- Opinion leaders can help build trust in innovation and achieve system change by changing the normative argumentation of innovation. Facebook, for example, was initially distributed in educational institutions (with a target audience of students and employees), which then took the product beyond the boundaries of their institutions and into the wider market.
In order to win over the right (preferably independent and trustworthy) opinion leaders or experts as advocates, you have to be clear about which adopter group you have in front of you and which social influences they are subject to.
- In order to stimulate demand for innovation, customers must be able to clearly recognize the advantages of the innovation. Especially for the so-called "early adopters", who follow the innovators in terms of time, the advantages must clearly outweigh any disadvantages. Unlike the "early and late majority", early adopters are hardly subject to any social pressure to try something new. The focus here must therefore be on strengthening trust in the advantages of innovation.
- As soon as market participants learn of an innovation that could be relevant to them, experience shows that they start to gather further information. Easily accessible and understandable information about why the innovation is appropriate for users or opportunities to see the innovation and its benefits in use or even try it out for themselves become all the more important the further adoption progresses.
- The following applies to all types of adopters: complexity must be reduced - innovation must be easy to understand. It is always worth combining the new with the familiar in order to minimize the risks perceived by customers. It is not for nothing that certain user interfaces always remain the same, even with new iPhone releases.
- Innovative companies must make it easy for the majority to follow the innovators and early adopters. We usually trust our (professional or private) "peers" more than a provider when we have to make an adoption decision (keyword: herd effect). Becoming aware of the relevant reference groups (influencers) and taking their exchange of information and the possibility of recommendation into account when designing the innovation can accelerate diffusion.
- The users are not always the ones who choose the innovation. For example, if a company implements new accounting software, not all users can make individual adoption decisions. Additional motivation and trust factors must be considered in order to do justice to individual adoption levels. The role of (monetary and intrinsic) incentives for use and compliance with standards are particularly relevant here.
- The more critical an innovation is for us (e.g. if the innovation has an impact on our health), the more important trust becomes when planning its diffusion. As trust is preferably formed in networks, these become more relevant. The patterns of network contacts, for example, lead to different levels of social pressure and thus to different adopter characteristics. In rural areas, the normative aspect played a much greater role in the spread of the contraceptive pill than in anonymous cities, where the product was able to spread via social learning about the product benefits.
- Ultimately, consumers are increasingly looking to build trust beyond the actual product performance, e.g. in the area of ethical, social or sustainable aspects. Customer trust is largely built through the behavior of a company and not just through communication. In the field of artificial intelligence in particular, we are realizing that trust plays a key role.
It is not always the best ideas that achieve exemplary diffusion on the market.
However, it is always the ideas that manage to build trust with customers in all phases of adoption - on a technological, individual and social level.
As you can see, the dissemination of an innovation on the market must be actively shaped.
Building trust takes time, and early simulation of the relevant mechanisms in the diffusion process is crucial.
Time spent building customer trust is never in vain.
After all, you learn to understand customers better and better, which in turn increases the likelihood of adoption.
