If you’ve taken a business course in the last 20 years chances are you’ve heard of the stages of technology adoption, created by Harvard Professor Clayton Christensen in his seminal work The Innovator’s Dilemma.
Now I’m well aware the world doesn’t need another article explaining why your crazy cousin is going to camp out for the next iPhone. But after having breakaway success with new marketing channels for legal clients, I believe I’ve found an important relationship to the world of marketing that explains a lot of the results we’ve been seeing.
With tech becoming a bigger part of life every year it’s also crossed over into mainstream discussion as well. In short – the model describes how new products enter the market place; starting from only being attractive to the vanguard of technology, gaining traction among those slightly less crazy, reaching mass appeal and finally dying off. Here’s a visual representation.
Now let’s turn this into a strategic planning tool with the addition of ROI by phase of adoption is in red.
The reasoning behind this is pretty simple. If we imagine all of the attention in a marketing channel as a pie, the slices get smaller every time another advertiser jumps in. Since advertising channels tend to formally or informally work on an auction basis, the price for acquiring one ‘slice’ goes up as time goes on. So as people adopt a marketing channel, the potential ROI goes down.
Think about the first attorney to place an ad in the yellow pages in your town. Or the first person to buy ads or rank on the top of google. They were making money hand over fist, right? How are those returns today? A lot less impressive. Still positive for the most part, but not what they used to be.
Where this gets interesting is what to do with this information. If you can understand this, you can potentially de-stress your marketing investments or make a lot more depending on where you are.
- Every person reading this is at a stage of this curve.
Sky-high ROIs are not for everyone because they come with sky-high risks. Like any kind of investing, risk and return are inversely related. The guy who was laughing all the way to the bank after placing the first google ad for a personal injury lawyer very well could have taken an absolute bath making a media buy on the back of jetskis the prior week. The true innovators are at the biggest risk of going to zero on any given investment. It takes guts, but to the victor go the spoils.
- Every marketing channel is on a stage of the curve.
For example, we cut our teeth advertising for attorneys on google adwords starting in 2012. At the time, it was most likely in the early majority stage and today in 2019 we’ve seen it cross over through late majority and arguably into the laggard stage. Over the last few years we’ve seen cost per click (and transitively, cost per leads and cost per signed case) go up, and return on investment go down.
To contrast – we’re currently seeing great returns in facebook advertising for personal injury lawyers right now, which I would categorize as early adopter in 2019. People who get in now are going to be making a better return than people who get in as the market opens to the early majority.
- In most cases – you should match your personal tendencies with the marketing channels you’re considering.
Everyone has a level of comfort with the risk they’re willing to take which is fundamentally what determines what stage you’ll adopt something at. When a prospective client is asking for 3 references before they can jump on the phone, I know that person is naturally in the late majority or a laggard. When I get off a phone with a prospect who’s writing a check and begging to get started yesterday, they’re a natural innovator or early adopter.
Late majority types will be extremely uncomfortable with innovation type channels. They’ll expect steady results and if things don’t get knocked out of the park first try, they’ll have a hard time finding the stomach to continue with an innovation channel. Innovation types will be extremely bored with late majority type channels. They’ll expect gangbuster results and be put off if what they’re doing is already being used by their competitors. There’s nothing wrong with being either as long as expectations are set. In most cases you can’t have your cake and eat it too (super high ROI for late majority or steady, consistent results for innovator channels).
- It’s possible to get the best of both worlds with a portfolio approach.
The one case in which you can have your cake and eat it too. Much like a sound financial strategy allocates investment into steady, low yield investments like bonds and risky, high yield investments like stocks, a good marketing plan can take a portfolio approach. Some of the best results we’ve had with innovative channels have been with firms that have ‘bread and butter’ results that they can count on every month like SEO and PPC. Shifting part of their budget over to a potentially higher yield channel is a win-win when it doesn’t break the bank.
What’s next?
If you’re like most of our clients, you probably don’t have to wait long for marketers of all stripes to present you potential opportunities by phone, email or carrier pigeon. If you’re looking to expand your practice, consider what type of adopter you are and where that matches up with the solution that’s being proposed.
Or, if you want to save yourself some time, book a time with our team at casefuel.com. We’re actively using channels at all stages of the marketing curve and have the real world results to let you know what to expect from each.
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