Rogers’ Five Factors

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Presentation Design Service

Rogers’ Five Factors
Product-focused Framework to
Innovation Adoption

Rogers’ Five Factors is a product-focused framework for analyzing innovation
adoption and diffusion. It is often used in conjunction with the people-focused
framework, Consumer Adoption Lifecycle (or Product Lifecycle). This document
explains Rogers’ Five Factors, provides examples, and templates to be used in your
own analysis.
March 3, 2013
ORIGINAL PROJECT DETAILS
http://pptlab.com/ppt/Innovation-Diffusion-Rogers-Five-Factors-15

PPT Lab (www.pptlab.com) is the only crowdsourced
presentation design service. Get consulting-quality
presentations at a fraction of the cost!
www.PPTLab.com
support@pptlab.com Each month, we will create well over 50 slides of for our members.
As a member, you will drive what business slides we create by
submitting your own presentation projects to our team. All
presentations will be created by a team of management
consultants and follow the Consulting Presentation Framework.

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Contents

 Overview 4

 Rogers’ Five Factors 9

 Case Example 17

 Summary 21

 Templates 24


Contents

 Overview

 Rogers’ Five Factors

 Case Example

 Summary

 Templates


Rogers’ Five Factors is a product-focused framework for understanding the
diffusion and adoption of new products
Executive Summary

Businesses have long been interested in the diffusion and adoption of product innovations. They are
interested in understanding how innovations diffuse, so that they can better predict and manage this
consumer adoption. A popular framework for this is the Consumer Adoption Lifecycle (or Product
Lifecycle), which traces the adoption of a product as it passes through 5 categories of consumers. This
is a viewpoint that focuses on people.
This document discusses a product-focused framework, called Rogers’ Five Factors. Developed by
Everett Rogers, this framework proposes that PARTIAL PREVIEW
THIS IS A the rate of innovation diffusion is largely driven by 5
product-based factors:
You can download the full document at http://PPTLab.com.
1 RelativePPT Lab is a crowdsourced presentation design service.
• advantage
2 Compatibility
•
3 Complexity
•
•
4 Trialability
•
5 Observability
This document explains the framework, provides examples, and includes PowerPoint templates that
can be leveraged in your own analysis.


There are 2 popular frameworks for understanding consumer adoption—
one that focuses on people and one that focuses on the product
Production Adoption Lifecycle vs. Rogers’ Five Factors

FOCUS ON PEOPLE FOCUS ON PRODUCT
VS
Product Adoption Lifecycle Rogers’ Five Factors

• In the traditional, people-focused approach, innovation • Rogers’ Five Factors is a product-focused approach to
adoption starts with the Innovators consumer group; then understanding which product attributes determine the
moves to Early Adopters, Early Majority, etc. consumer adoption and innovation diffusion process
THIS IS A PARTIALThese factors are intrinsic to the good or service being
• Different strategists argue about whether there is a • PREVIEW
“chasm” between Early Adopters and the Early Majority offered—the reason one product diffuses rapidly and
• This framework offers insight into customer another slowly largely can be found in a small handful of
segmentation to accelerate the adoption process product characteristics (i.e. Rogers’ Five Factors)
PPT Lab is a crowdsourced presentation design service.design to
• This framework offers insight into product
accelerate consumer adoption

Relative
Compatibility
Advantage

Observability Complexity
Innovators
Trialability

Early Chasm Early Late Laggards
Adopters Majority Majority

Source: Diffusion of Innovations, Rogers; Crossing the Chasm, Moore


The diagram below illustrates the Production Adoption Lifecycle and
shows the percentage of consumers that fall into each segment
Product Adoption Lifecycle
market
share

50%

THIS IS A PARTIAL PREVIEW
25%
PPT Lab is a crowdsourced presentation design service.

Innovators

Early Chasm Early Majority Late Majority Laggards time
Adopters
Percentage of
Consumers

2.5% 13.5% 34% 34% 16%


This diagram captures the Rogers’ Five Factors framework
Rogers’ Five Factors

1 2

Relative
Compatibility
Advantage

5 PPT Lab is a crowdsourced presentation design service. 3

Trialability

4

Research suggests 49% to 87% of the variance in the rate of new product adoption can
be explained by these five factors.

Source: Note on Innovation Diffusion: Rogers’ Five Factors, Harvard Business School Publishing


Contents

 Overview


 Case Example

 Summary

 Templates


The Five Factors that determine innovation diffusion are Relative
Advantage, Compatibility, Complexity, Trialability, and Observability
Rogers’ Five Factors – Definitions
DEFINITION

1
• The degree to which a product is better than the product it replaces
Relative Advantage

2
• The degree to which a product is consistent with existing values and
Compatibility experiences
3
You can download •the degreedocument at is difficult to understand and use
The full to which a product http://PPTLab.com.
Complexity
4
• The degree to which a product may be experimented with on a limited basis
Trialability

5
• The degree to which product usage and impact are visible to others
Observability


It is critical to realize the simple truth that perceptions matter—it is not
what is true, but what is perceived to be true
Rogers’ Five Factors – Important Considerations

Relative
Advantage Compatibility


Trialability
You can download the thesedocumentis important to
In considering full 5 factors, it at http://PPTLab.com.
PPT Lab is a crowdsourced these two issues:design service.
consider at least presentation

1 Perceptions matter. For instance, when evaluating 2 Innovation is relative to the consumer group. In
“relative advantage,” you are really evaluating other words, the product or idea only has to be
“relative advantage as perceived” by the potential perceived as new by a given set of people for it be
adopter. Therefore, one must manage not only the considered an innovation for that set. For instance, a
objective product characteristics, but also those product that is well entrenched in one culture could
characteristics as perceived by consumers. be viewed as highly innovative in another culture if
it’s perceived as new by them.


Relative Advantage measures the degree a new Relative
Advantage
Compatibility

product is perceived being better Observability Complexity

Trialability

Factor 1. Relative Advantage
DESCRIPTION
EXAMPLES
• Relative advantage is the degree to which an innovation is perceived as being better than • The Dvorack keyboard was an attempt to
the idea it supersedes streamline the traditional QWERTY
keyboard—while offering somewhat faster
• It can take many forms:
typing speed, the cost of transition to the
• Perceived economic benefit (e.g. reduced costs; decrease in time, effort, or dollars) Dvorak keyboard was too great for
adoption to successfully take place
• Perceived increased or new benefits (e.g. greater productivity, greater efficacy, greater
reach) • On the other hand, there are innovations
that offer such drastic relative
• A combination of the above, in which the perceived net benefit is positive relative to the advantages, they are deemed “no
existing alternative THIS IS A PARTIAL PREVIEW brainers”
• Non-economic, subject benefit (e.g. social status, prestige) • Andy Grove identifies these products
• Typically, relative advantage takes the form of increased economic benefit as offering 10x improvements
• Clear examples exist in medicine—
PPT Lab is a crowdsourced presentation design service. over heart bypass
e.g. angioplasties
surgeries; MRIs over traditional X-
rays

As the Relative Advantage of an innovation increases, the rate of adoption for the
innovation also increases.



Compatibility measures the degree a new product is Relative
Advantage
Compatibility

consistent with existing ideas and beliefs Observability Complexity

Trialability

Factor 2. Compatibility
DESCRIPTION
EXAMPLES
• Compatibility is the degree in which an innovation is perceived as consistent with existing • People expect that fine wines will be in
values and experiences of the potential adopter sealed cork stoppers, despite the fact that
about 10% of fine wines are spoiled due
• This compatibility can be with any of the following:
to faulty corks
• Previously introduced ideas • As a result, there is limited
• Values and beliefs acceptance of the twist-off metal cap,
despite it reducing such spoilage
• One’s needs
• When concentrated liquid laundry
• In short, being compatible with existing concepts is less threatening, seems more familiar, detergent (requiring half the dosage)
and fits more closely with a person’s impressions of the way things ought to be came out, consumers were using more
• It is important to note that we might want to avoid compatibility with previous innovations dosage than necessary
that failed You can download the full document at http://PPTLab.com. their previous
• They were locked into
method of measuring laundry
PPT Lab is a crowdsourced presentation design service. confident that the
detergent and not
newer product could be twice as
effective

As the Compatibility of an innovation with existing concepts, habits, and experiences
increases, the rate of adoption also increases.



Contents

 Overview


 Case Example

 Summary

 Templates


The telephone is one of the most revolutionary, impactful, and pervasive
inventions—yet its adoption was incredibly slow…
Case Study – Telephone Adoption (1 of 3)

The telephone is an innovation that we now take for granted. It is an integral and necessary part of our daily lives. One
would assume it was adopted very quickly. Yet, the reality proves otherwise.
The telephone was invented by Alexander Graham Bell in 1876. By 1900, 25 years later, it would only be found in 10% of
the households in the US. By 1935, 60 years after its invention, it could only be found in 30% of households. In fact, it
wasn’t until the 1980s that the telephone reached 90% of US households.
Why was the rate adoption for the telephone so slow?

1 PPT Lab is a crowdsourcedservice today is inexpensive, in its service.
• While telephone presentation design early years,
the installation and usage fees made it unaffordable for most
Relative Advantage Americans
• While the benefits of calling people in other parts of the country
are now taken for granted, people tended to interact mostly with
others in the same town in the late 1800s and early 1900s
• Furthermore, because so few people owned telephones, there
was not enough people to call—it had not reached any critical
mass of users
• The net effect is the relative advantage of the telephone in 1900
was far from obvious



… we see in its early years, it had no/minimal Relative Advantage, low
Compatibility, high perceived Complexity, and very limited Trialability…

2 • Today, the telephone seems highly compatible with our values,
norms, and ideas
Compatibility
• However, in the late 1800s, the thought of a voice emanating
out of a metal box was unsettling—even frightening
• Furthermore, the already adopted telegraph had the distinct
advantage of a permanent “hard copy” of a loved one’s or
client’s words
3 • While the telephone was simple to use, it was incredibly
You can downloadcomplex to understand
the full document at http://PPTLab.com.
Complexity is a crowdsourced presentation design service.
PPT Lab • The result was a set of concerns that could hinder adoption—
e.g. Can it transmit diseases? Can I get electrocuted? Does it
speak my language?

4 • Originally, the telephone was limited to the very wealthy and to
high-end businesses
Trialability
• The typical consumer knew few people who owned a telephone,
thus limiting the ability to test and learn about the telephone



… thus, it makes sense why the telephone took so long to be adopted by
the majority of the US market

5 • Observability was fairly high for the telephone

Observability • Since one needed to run a very visible wire to his or her home
or place of business, it was very easy to identify who had
access to a telephone and who did not


Given the analysis above, it is clear why the telephone was so slow to be adopted and
diffuse—only with time, did the telephone improve on each of these factors.



Contents

 Overview


 Case Example

 Summary

 Templates


For a holistic analysis to innovation adoption and diffusion, it is best to
utilize both the people-focused and product-focused frameworks
Holistic Approach to Adoption

Rogers’ Five Factors Consumer Adoption Lifecycle

• By focusing on product differences, we can better
• Once
You can download the full documentthe perceived characteristics ofdifferencesare
at http://PPTLab.com. to
understand and possibly enhance the appeal of a product
determined, we can focus on people
a product

—independent of the consumers doing the adopting
manage the adoption process
• We achieve this by increasing its perceived relative • By knowing which consumers are predisposed to adopt
advantage, increasing its perceived compatibility relative early and which are predisposed to lag the masses, a
to values and norms, decreasing its perceived complexity, company can manage its limited resources to consumer
increasing its trialability, and increasing its observability segments that will be most likely to adopt
• At the very lease, we can passively anticipate the rate of
adoption

Rogers’ Five Factors and the Consumer Adoption Lifecycle are complementary tools
strategists can use to manage and accelerate product adoption and diffusion.



The diagram below summarizes how each of the Five Factors relates to
product innovation
Five Factors Relation to Adoption
RELATION TO INNOVATION RELATIONSHIP

1
• As the Relative Advantage of a product increases, the
Relative Advantage rate of adoption for the innovation also increases
DIRECT

2
• As the Compatibility of a product with existing concepts,
Compatibility habits, and experiences increases, the rate of product
adoption also increases DIRECT
3
You can downloadAs the perceived complexity ofat innovation increases,
• the full document an http://PPTLab.com.
Complexity the rate of adoption decreases
PPT Lab is a crowdsourced presentation design service. INVERSE

4
• As the trialability of a product increases, the rate of
Trialability product adoption also increases
DIRECT

5
• The more visible or observable the usage and ouctome of
Observability an innovation, the greater the rate of product adoption
DIRECT



Contents

 Overview


 Case Example

 Summary

 Templates


Headline
Rogers’ Five Factors – Template
STATUS

1
• Filler text
Relative Advantage

2
• Filler text
Compatibility
3
You can downloadFiller text document at http://PPTLab.com.
• the full
Complexity
4
• Filler text
Trialability

5
• Filler text
Observability


Headline
Rogers’ Five Factors – Template (Alternate)

1 2 3 4 5
Relative
Compatibility Complexity Trialability Observability
Advantage

• Filler text • Filler text • Filler text • Filler text • Filler text
• Filler text • Filler text • Filler text • Filler text • Filler text
• Filler text • Filler text
THIS IS •A PARTIAL PREVIEW
Filler text • Filler text • Filler text


MEDIUM MEDIUM MEDIUM MEDIUM MEDIUM


Headline
Rogers’ Five Factors – Template (Alternate) • Filler text
• Filler text
1 2

Relative Compatibility
Advantage

5 3

• Filler text Trialability
• Filler text
• Filler text
• Filler text 4 • Filler text


• Filler text
• Filler text


Headline
Consumer Adoption Lifecycle - Template

You
Innovators can download the full document at http://PPTLab.com.

Early Chasm Early Majority Late Majority Laggards time
Adopters

• Filler text • Filler text • Filler text


PPT Lab (www.pptlab.com) is the only crowdsourced
presentation design service. Get consulting-quality
presentations at a fraction of the cost!
www.PPTLab.com
support@pptlab.com Each month, we will create well over 50 slides of for our members.
As a member, you will drive what business slides we create by
submitting your own presentation projects to our team. All
presentations will be created by a team of management
consultants and follow the Consulting Presentation Framework.


Rogers’ Five Factors

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