Recently one of my clients launched a new technology product. We named the product, created the brand and initial marketing collateral. The revenue forecast for this product was significant, and a major corporation committed to a $2 million purchase to evaluate the product’s potential.
The mood at the technology company was jubilant. Clearly this product was going to take off. What we did not consider is how testing of the new product by the major corporation could go awry.
The site of the testing was in a foreign country. The documentation required to get the product into the company was a stumbling block, taking weeks to accomplish. On the way to the test site, some of the product was damaged. When the corporation used the product, they did not do so in a controlled environment. Many months later, after expending considerable resources on this sale, my client still didn’t have a referenceable account.
This situation made me think of the excellent points made in the book Crossing the Chasm, written by Geoffery Moore in the early 1990s. In Crossing the Chasm, Moore points out that successful marketing of a technology product requires referenceable accounts early in the product life cycle. It also requires selling and marketing the whole product – whatever product and services are required to get a positive result for customers. My client needed to sell the product with a controlled process required to get initial test results completed successfully, but more importantly, they needed to evaluate the risk of not getting a successful test result with a first customer and choose another situation in which to invest resources.
According to Moore, the top reason people buy a technology is because of a reference. Choosing the right beta customer for a new technology and providing the whole product (the technology plus whatever services are needed for success) is critical for crossing the chasm from new product status to a mass market. Moore’s points about marketing technology are still relevant almost 20 years after his book was published. If anything, in today’s marketing environment that is driven more and more by customer advocacy, emphasis on referenceable accounts is increasingly critical.
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Thanks for the article. I understand the value in a targeted market segment that you can dominate with the new product. According to Moore, should your alpha/beta testers be part of your targeted market segment? Or can that early feedback come from innovators and visionaries, without respect to a market segment? In other words, do I need to segment first, then find beta testers or can I find beta testers without first identifying a whole market?
I think there could be some value to having testers from various industries – you may have a more robust testing process with testing by people in different environments with different needs and wants. But the reality during beta testing is that you as the technology creator are giving one or some visionaries the unique chance to get their hands on leading-edge technology in return for their thorough testing and candid feedback. Beta testing is a partnership that should be a win-win. I’d lean toward doing your market segment analysis and then hand-picking your beta testers. A word of caution, it behooves the technology creator to choose carefully and look for stability of the testing entity as well as fit in work ethic, culture, personality, geography and other arenas.