Applying the “Whole Product Model” to the “Technology Adoption Life Cycle”

Key Takeaways The Whole Product Model helps you for longer-term product planning on how

Key Takeaways

  • The Whole Product Model helps you for longer-term product planning on how to achieve your product vision  
  • The Technology Adoption Life Cycle helps you to focus your product marketing on the right segment at the right time  
  • The combination of both models helps you to define a promising product strategy
  • Target one customer adoption segment after another to stay focused and build references
  • Don’t be solution-focused; be focused on the customer problems of each segment

Shifting Focus

One of the biggest mistakes that we see product managers make is that they often focus exclusively on their product’s features as opposed to on the customer problem to solve. In order to develop products customer love, product managers need to truly understand how their “whole product” delivers value and when to address which customer segment, meaning focusing on the right problems for the right customer at the right point in time.

There are two models that are very powerful when applied together, and that a product manager can use to develop extraordinary products:

  1. The Whole Product Model
  2. The Technology Adoption Life Cycle

The Whole Product Model

One of the most useful product marketing constructs in all of high-tech marketing is the concept of a “Whole Product” [1]. The concept is not new; actually it was developed by Theodore Levitt more than four decades ago, but is still powerful in today’s high-tech markets.

The concept is very straightforward: there is a gap between the marketing promise made to the customer – the compelling value proposition – and the ability of the shipped product to fulfill that promise.

Nowadays I would rephrase the gap as follows: there is a gap between the promised solution of a customer problem or customer job and the shipped product.

To overcome that gap, the product must be augmented by a variety of services and ancillary products to become the “Whole Product”.

The formal model, as defined by Levitt, identifies four different levels of whole product completeness (see figure 1):

  1. Generic Product: this is what is shipped in the box and what is covered by the purchasing contract.
  2. Expected Product: this is the product that the consumer thought she was buying when she bought the Generic Product. It is the minimum configuration of products and services necessary to have any chance of achieving the buying objective. Thus, this is the minimum marketable product (MMP). Roman Pichler defines the MMP as “the product with the smallest possible feature set that addresses the needs of the initial users (Technology Enthusiasts and Visionaries) and can hence be marketed and/or sold”.
  3. Augmented Product: this is the product fleshed out to provide the maximum chance of achieving the buying objective.
  4. Potential Product: this represents the product’s room for growth as more and more ancillary products or services come on the market and as customer-specific enhancements to the system are made.

Figure 1: The Whole Product Model

We can see the Whole Product Model applied for the Apple iPhone in figure 2:

Figure 2: The Whole Product Model Applied

The Technology Adoption Life Cycle

As can be seen in figure 3, the Technology Adoption Life Cycle [2] has a bell curve and the divisions in the curve are roughly equivalent to where standard deviations would fall. This means that Tech Enthusiasts make up about 2.5% of the total population, the Visionaries about 13.5%, the Pragmatists and the Conservatives both 34% and the Skeptics the remaining 16%. Each group represents a unique psychographic profile (i.e. a combination of psychological and demographic traits) that makes its marketing responses different from those of the other groups. By understanding the differences of these groups, product managers and product marketers are better able to target each of these consumer segments after another, each with the right marketing techniques.

The five groups are defined as the following:

  1. Tech Enthusiasts embrace new and innovative technologies. They sometimes even seek them out even before a formal marketing program has been launched. This is because technology is a central interest in their life, regardless of what function it is performing. The drawback is that they represent the smallest portion of the total market.
  2. Visionaries are quick to understand the benefits of new technology and gain value by moving more quickly than the rest of the market. They have the insight to match up an emerging technology to a strategic opportunity. Consequently, they are willing to take high risks trying something new, are the least price-sensitive of the adopter groups, and are highly demanding. They prefer to rely on their own intuition and vision. In addition, they are willing to serve as highly visible references to other adopter groups in the population. Since Visionaries are good at alerting the rest of the population, they are of utmost importance to win over.
  3. Pragmatists are more practically minded, often waiting until products are more proven. They represent a significant segment by volume: one-third of the total available customers. They are driven by a strong sense of practicality and want to see well-established references before investing substantially. Because there are so many people in this segment (roughly 34%), winning these people over is fundamental for any business that strives for substantial profits and growth.
  4. Conservatives wait for a product to become well established, often delaying their purchase until established enterprises with whom they already have a relationship offer a version of the product. They like buy pre-assembled packages, with everything bundled, at a heavily discounted price. Conservatives prefer to wait until something has become an established standard and invest only at the end of a technology life cycle. And even then, they want see lots of support and tend to buy from large, well-established companies only. Being the market leader is therefore an important prerequisite in order to win.
  5. Skeptics do not participate in the high-tech marketplace unless it’s to block purchases. They are usually regarded as not worth pursuing. Their criticism however, of the discrepancies between the sales claims and the actual product, provide valuable feedback for organizations.

The early market, made up by the Tech Enthusiasts and the Visionaries, requires an entrepreneurial company with a breakthrough technology product that enables a new and compelling application, a Tech Enthusiast who can evaluate and appreciate the superiority of the product over current alternatives, and a well-financed Visionary who can predict an order-of-magnitude improvement from implementing the new application.

Between every adopter group in the Technology Adoption Life Cycle (figure 3), you can see a gap. This gap between segments indicates the “credibility gap” that arises from seeking to use the group on the left as a reference base for the group on the right. This gap exists because consumers prefer to trust references from people who belong to their own adopter segment. This creates a challenging dilemma, since you cannot use people as a reference group if they haven’t bought from you yet! The gap is widest between the Visionaries and the Pragmatists. These groups differ from each other in such a way that using one as a reference base for the other is highly ineffective. This gap is called “the Chasm”. Since the leap from the Visionaries to the Pragmatists means the transition from the Early Market to the Mainstream Market, crossing the chasm is of utmost importance in order to truly achieve market success with a newly launched product.

The mainstream markets in high-tech look very similar to mainstream markets in any other industry. The market is driven by the Pragmatists; winning their support is the key to long-term dominance. Pragmatists are industry experts and trust your product only if you can prove relevant references in their industry and position yourself as someone who understands the industry.

Furthermore, you should make sure that your product offers a complete solution and that service levels are high (“Whole Product Model”). The user experience Pragmatists have with your product will ultimately decide whether they will delight their peers as well. Once you have established a strong word-of-mouth reputation with the Pragmatists, you have crossed the chasm properly.

Figure 3: Technology Adoption Life Cycle

Applied Together

Let’s have a closer look at how both models can be applied together:

Figure 4: Both Models Applied Together [3]

If we consider the Technology Adoption Life Cycle as a whole, we can generalize that the outer circles of the “Whole Product” increase in importance as we move from left to right. That is, the customers least in need of “Whole Product” support are Technology Enthusiasts, as they adopt any new technology just for the sake of the technology. To cross into the mainstream market, you have to address the Pragmatists. This segment wants the “Whole Product” to be readily available from the outset.

Implications for the Product Management

What’s in it for us product managers? Applying both models in a combined way gives us guardrails for our product strategy. Let’s have a look on some helpful suggestions underpinned by a case study of developing and launching a “Lifestyle Companion Mobile App”:

  1. No matter which model I apply, I always start with a great new idea on how to solve a customer problem and get her jobs done by leveraging the newest technologies. Technology Enthusiasts help me to start the fire in the early market. They are just happy getting access to a “closed beta” or an early MVP even before a first official marketing initiative. Therefore, product managers need to cherish that and incorporate them closely in product development cycles. For instance, product managers should invite them to user experience labs, letting them test prototypes, and invite them to product demos to get their feedback at the end of a development iteration. Make sure you have the right feedback loops with Tech Enthusiasts installed. Value their feedback in the way that you show them how you implemented their suggested improvements.

    In reality:

    We have started as an interdisciplinary team of product managers, designers and engineers to support a German savings bank’s endeavor in keeping and attracting a younger segment of teenagers and students. We have conducted several problem interviews with the representatives from the target group and did a lot of market research. We found out that the main concerns of this group were on how to handle certain challenges in their daily life, such as finding a job, making friends in a new city, figuring out what to study, and so on. We then ideated different business model ideas and prioritized a “Lifestyle Companion App”. We developed a rudimentary chatbot interface with some content articles as an iOS app. This was far from being a “Whole Product”. We targeted local tech savvy teenagers via Facebook and gave them the exclusive possibility to be the first app users. We shared our vision and planned a product roadmap and invited them onsite for “User Experience Labs” on a bi-weekly basis in our office to incorporate their feedback into further product development. We learned that the chatbot interface is not our differentiator, but the personalized recommended local content. Thus, we have increased our effort with machine learning and hired additional content editors and marketeers. The tech savvy teenagers started to create buzz via word-of-mouth on social media, and requests via Social Media to get access to the app increased.

  2. When the market is unfolding as it should, the entrepreneurial company seeds the Technology Enthusiasts community with early copies of its product while at the same time sharing its vision of the “Whole Product” with the Visionaries. The key is to incorporate the Technology Enthusiasts in product marketing activities and use them as a reference for the Visionaries. At this point in time, we need to have a version of the Expected Product in place, meaning the MVP has evolved to an MMP. This transition requires a very good understanding of the Visionaries based on user research. Those insights should drive the product design to reach MMP maturity. The MMP is marketed to the Visionaries; their feedback influences further product development to the next “Whole Product” stages, the “Augmented and Expected Product”.

    In reality:

    We continued to learn from the Technology Enthusiasts community, in our case the tech savvy teenagers and students, but now we wanted to attract the Visionaries. So, we had to move our product from the MVP to a marketable stage. We expanded our lifestyle companion services. We added the possibility to redeem vouchers with local deals, bookmark local event and location recommendations, added a calendar, like and share functionality of content and a map with location-based recommendations. In addition, we invested heavily in machine learning to improve the personalized recommendations. We have built the backend based on a microservice architecture to strengthen the scalability, as we now had the focus on attracting further customer segments. To win over the Visionaries we analyzed local Facebook groups that matched our focus topics of education, career development, events and locations, and identified so-called “influencers”. We targeted them with our app and specific premium content we offered them first. We aroused their interest by sharing our vision for the “Whole Product” and gave them the feeling of exclusivity through having access to premium content and having influence on the product roadmap. Furthermore, we showed them how they could use the app to increase their own visibility in webinars and YouTube videos. By taking these actions we tripled our user base and got an enormous buzz in local social media.

  3. In order to cross the chasm, you must win the Pragmatists. They expect the “Whole Product” from you. The “Whole Product” is more than just a marketable physical or digital product (the MMP); it comprises the whole experience from installation / onboarding till after sales and customer service, as well as ancillary products or services. In the case of the iPhone, the “Whole Product” is the Apple ecosystem with its app store, streaming services, ancillary products, etc.  Developing the “Whole Product” requires taking some bets on the future and persevering with the most promising ones. Furthermore, you need to win some industry flagship clients when you have a B2B business model to prove that your solution fits the industry needs. In a B2C environment, you need to win some product context-specific influencers as reference customers. This is the time to invest heavily in customer relationships by expanding customer service channels, offering training & support, assistance in installing solutions, etc.

    In reality:

    After having won the Visionaries, we had reached the “Chasm” and it was time to attack the Pragmatists segment. Therefore, we have transitioned our focus from a B2C mobile app to become a B2B2C platform. We have invested in building open APIs that can be used by small local companies to add content, vouchers and sell products. Thus, we have created a platform for local personalized content and local products that fit one’s interests. We attracted some local “flagship clients”, for example fitness centers and some local prominent fashion boutiques. We marketed those flagship clients on social media and local news. The platform was complemented by different customer service channels, a self-service portal and local account teams. By having a “Whole Product” now with prominent flagship clients as references, we were able to enter the mainstream market.

  4. The Conservatives do not have high aspirations about their high-tech investments, and hence will not support high price margins. They like to buy bundles at a heavily discounted price. As product managers we should develop product variants that are cheaper to produce and sell them at a lower price. Out of those product variants we can design bundles together with other services from our “Whole Product”. Those products need to be standardized to use low-cost distribution channels and offer an automated customer service at cheap operational costs.

    In reality:

    After having won the Pragmatists, we were after the Conservatives. We used our platform to launch copies of our Lifestyle Companion app for other target groups. For example, we launched an app for young professionals who were focused on topics such as career, family and investments. Those product variants were easy to launch as we re-used our microservice architecture and enriched the variants with other branding and content. We also could already build on our established distribution and customer service channels. So, by having a platform and different product variants we were able to win a larger piece of the available market.

  5. As the Skeptics do not participate in the high-tech marketplace except to block purchases, the primary focus is on neutralizing their influence. On the other hand, we should value their feedback and loop their insights from this segment back into our product discovery and development work.

    In reality:

    Throughout our success journey we met people who were afraid of our location-based personalization services because of data concerns. We tried to interview some of them on a quarterly basis to understand their concerns and try to incorporate them into our marketing messages. But let me be honest, the real “Skeptics” will never be satisfied; you need to take them seriously, observe them and make sure that this group is not growing.

Conclusion

Both models are valuable for any product manager developing and marketing products in the digital age. The Whole Product Model helps me to think about the promise I make to the customer, her whole experience, and supports me in deriving an inspiring product vision.

The Technology Adoption Life Cycle ensures focus by limiting the number of segments I target at a given point in time. I can derive personas with different psychographics and characteristics for all of the different segments and use them for generating ideas for product development, prioritizing the product backlog and testing promising ideas.

The combination of both models leads to several guardrails that I need to incorporate in my product strategy, e.g., investing in customer service to attract the Conservatives.

Sources:

[1]    Levitt, Theodore. Marketing Success Through Differentiation – of Anything. Harvard Business Review, January, 1980.

[2]    Moore, Geoffrey. Crossing the Chasm – Marketing and Selling Disruptive Products to Mainstream Customers. Harper Business, 1991.

[3]    A primer on the Whole Product Model – Ravi Kumar

About the Author

Sebastian Straube started his career as a consultant focusing on digital transformation and digital strategy. Then he was eager to actually execute the strategies and build real products. Thus, Sebastian became a product manager developing mainly eCommerce applications and innovative mobile apps. Building on that experience, Sebastian wanted to bring his passion for product development to other teams. Now he is a product management & discovery coach at Accenture | SolutionsIQ and helps clients build empowered product teams that develop extraordinary products. His focus lies on product visioning, product strategy, and product discovery.