In college economics, I learned about the stages of adoption of new technologies or ways or doing things. Marketers love innovators and early adopters, but does it make financial sense to be an early adopter every time? What are the pros and cons?
What Are the Stage of Adoption?
There are five stages of adoption: innovators, early adopters, early majority, late majority, and laggards. Innovators take the risk of buying everything when it comes out. Marketers love them because these initial buyers help them work out the kinks. Early adopters are the next to buy – when it’s still cool, but more proven. Early majority buyers buy products when they’ve become mainstream, but not everyone has one. Late majority buyers typically wait until most other people have adopted an item or new technology. Laggards may never get around to buying something, or will only do so once it’s ingrained in society.
Should You Be an Innovaor for New Products?
My brother-in-law is an innovator when it comes to Apple products. He was convinced he needed an iPad the day it came out. I’m somewhere between early and late majority, and I’m not convinced it has a real purpose yet.
From a financial standpoint, it doesn’t make sense to be an innovator. The first buyers of the iPad will pay a high price for a first generation product with fewer features and more bugs. If they wait a year or two, they’ll get twice the features at half the price. I had another friend who bought a DVD player as soon as they were available. It set him back $500. I waited two years and paid $80. I think it was certainly worth it to save $420!
Other Advantages of Resisting the Call
In addition to saving money when you do finally adopt a product, resisting the call to buy can help you determine whether something is actually worth buying. New products come out every day, and most of us simply don’t need them. Rather than rushing to the store, you can determine if an item will actually improve your life. Most of the time, it won’t. I waited over a year to buy a Wii – until I was absolutely convinced that I would make good use of it. I certainly could have done without it, though.
Should You Be a Laggard?
Certainly, being a laggard is the most frugal option, but there are some things that can truly change your life. You shouldn’t be resistant to spending money on something or adopting an idea just because it’s “new.”
Questions to Ask Before Adopting Something
If you’re on the fence about something, or tempted to rush into a purchase, you can start with the 10-10-10 rule, or ask yourself these five questions:
1. How will I use this product?
2. Why do I want this product?
3. How many hours would I have to work to pay for it?
4. Is it worth that much of my time?
5. Will this product make a tangible difference in my life?