One Targeted Segment To Generate Revenue Faster

The faster businesses go to market, the more revenue they generate. However, many businesses launch brilliant products and services but fail or struggle to penetrate the market, which makes them lose money.

After market segmentation, businesses often try to go to market by approaching all their targeted segments. While this strategy might eventually bring them the results they aspire to, it definitely isn't the optimal one. Instead, focus on what Professor Everett Rogers calls "The Early Adopters."

In his book "Diffusion of Innovations", Professor Rogers divides people into five categories:

1. Innovators (2.5%): Visionaries like Steve Jobs.

2. Early Adopters (13.5%): They try innovations fast and early, such as those who wait all night in front of Apple Stores to get the newly launched iPhone.

3. Early Majority (34%): They try innovations but wait until the early adopters try them.

4. Late Majority (34%): They are similar to the early majority but a little later.

5. Laggards (16%): They buy an iPhone because there aren’t cellphones with buttons anymore.

For a business to successfully penetrate the market and maximize its revenue, it needs to cross the "Chasm" and reach the largest segments of its targeted market. According to Professor Rogers' categorization, the majorities (early and late) comprise 68% combined.

Businesses need a 15-16% penetration rate to cross the chasm from the early adopters to the majority. Additionally, Professor Rogers explained in his categorization how the early majority needs the early adopters to try the innovations before themselves, and the late majority follows the early majority.

Therefore, it's more optimal and efficient for businesses to design their GTM strategies to focus only on the early adopters first, who comprise 13.5%. That's the closest percentage to the penetration rate needed to cross the chasm.

In addition, early adopters often become advocates for the innovations they adopt, which helps businesses have organic advocates for their innovations, saving them costs and making revenue generation faster and easier.