Selling to SMBs: AIDA and The Conversion Zone

I’ve had the pleasure of working alongside a number of elite companies as they’ve experienced the Technology Adoption Life Cycle (or as I like to call it, the bell curve ride), as portrayed in Geoffrey Moore’s book Crossing the Chasm.

I’m often asked by entrepreneurs and venture capitalists alike to explain what changes throughout the course of the “bell curve ride” and how organizations need to adapt at each stage in order to ensure continued success.

Here’s the best way I can explain how it all works…

I’m a visual learner, so the easiest way for me to convey what happens is to draw you a picture and highlight the powers in play.  Since you may not be familiar with all of the components, I’ll explain each below and then share what you can do once you figure out where your business sits in the overall equation.

Technology Adoption Life-Cycle
In Crossing the Chasm, Geoffrey Moore conveys how industries evolve from the innovator’s stage across the chasm through the majority and eventually on to the laggards.  While there is much to learn from reading his book, in this context we are going to use it to simply highlight the evolutionary process along with the orders of magnitude of the potential customers (area under the curve) at each stage along the way.

AIDA
As humans, there are 4 stages we all go through when evaluating whether or not to do something. The stages include awareness, interest, desire and action.

Awareness: I’m aware that a problem or pain exists

Interest: I’m have interest in solving that problem for myself

Desire: I’d like to see how this solved the problem for someone like me

Action: I’ll give it a try

The arrows on the diagram above attempt to visualize how as one progresses along the Technology Adoption Life-Cycle, the people you engage with require a higher level of attention in order to be converted into customers.  For example, the Late Majority and Laggards require much more “education and selling” before they’re willing to try something new as opposed to an Early Adopter.  Make sense?

Conversion Zone
So here is where all the action happens.  All you need to do to be successful is to have a product that solves for a real pain and then tune your conversion process such that it maximizes the number of people coming in the top of your funnel converting into long-term customers.  Simple enough right?  While this framework may simplify understanding how all the pieces come together, I recognize how you might now want some further clarification on AIDA and how to build your Conversion Zone to get small business owners to adopt your solution.  If so, read on.

Case Study: Email Marketing

AIDA in Action

Awareness: are business owners aware repeat business from existing customers is really important.

Interest: are they interested in evaluating a really cost effective way to stay engaged with their customers so they can bring them back more often?

Desire: here are the stories of how business owners in every type of industry have used email marketing to do stay connected and bring their customers back.

Action: here’s a free way you can try it for yourself that takes less than 20 minutes.

Conversion Zone in Action 
In general terms as you go further along the Technology Adoption Curve, your cost of acquisition will rise.  Since innovators make it their business to track down cool new technology like you offer, getting after the early majority is going to require building out a go-to-market strategy, often including media spend and a sales team.  The further you progress down the curve, the more expensive it becomes to reach the next set of customers via media and the longer it will take for a sales team to convert them (each layer becomes more skeptical).

How do you win?  Let’s assume you and your competitors all have a decent product, market fit, customer acquisition and sales functions established. You still need to tap into the one thing small businesses depend on when making informed decisions: a trusted referral from another business owner.

To understand how likely one small business owner is to recommend you to another business owner you need to understand your Net Promoter Score™ and be able to compare it to your competitors.

Customer Virality and the Net Promoter Score
The counter balance to rising COA over time is: Customer Virality. Or how likely your customers are to recommend you to another small business owner.  It’s most commonly measured as your Net Promoter Score.  The more Positive your score the higher the likelihood your existing customers are willing to help you attract new customers (which drives down your overall cost of acquisition). How likely are they to put their brand on the line for your business = Trust.

Don’t let your team fake it by asking existing/new customers to rate you directly after you’ve done something great for them, this will come back to bite you.  The best scores come from a fully representable sample (or Comprehensive Net Promoter Score) including everyone with an informed opinion about your product (including people who have churned or have had an experience with your brand). While not all brands will like this, it is a reality with small businesses that bonds the community together.

Understand where you stand vs. your competition by knowing how your external NPS compares to others in your industry.   The SMB Trust Index provides comparable ratings using the NPS index where you can compare many leading SMB brands against your own.

Industry Study: The Email Marketing Wars
While it’s hard enough battling for market share on your own, it’s also important to realize that’s rarely the case since some competitor is always trying to get a disproportionate share of your market! If you’re interested in learning what it’s like to try and win when competing head-to-head against some formidable competition, I’d encourage you to check out this post on the Email Marketing Wars between Constant Contact, MailChimp, and all the others vying for SMB mindshare in this space.

Eric Groves is the co-founder and CEO of Alignable, the small business network where local businesses and organizations connect and collaborate with others nearby. Eric has been a local marketing expert and enthusiast since joining Constant Contact as a founding executive in 2001.