Imagine you are selling a new drink (perhaps in a new category) and you’re competing against Coca-cola. You’ve invented a nootropic brain drink that helps you stay calm and alert while coding, and it has a pleasant natural fizz to it. It might even be an unusual color like purple. Taste tests from prospective customers have been successful and the effects bear out from your claim – coders love it! Continue reading
Imagine the sales call…
When someone calls you to discuss a product you just signed up for, how do you feel? Depending upon where you are in your buyer’s journey, you might welcome the call, feel ambivalent, or be annoyed that the company called you at all (especially if you haven’t yet given them your phone number). What often happens is a mismatch between the relationship strength — the relationship between you and the company necessary for you to have a good experience with their product — and your goals. Likewise, the transaction cost — the effort required for you to experience the product enough to know whether you’re ready to buy — may also be fundamentally misplaced.
A great (first time or otherwise) product experience matches the relationship strength needed by the typical customer. How much help will the customer need from you to get what they need from your product? This product experience also matches the transaction cost that customer expects. Is it too much work for the customer to do the work they need to do, with or without your help? Answering these two questions helps you scope your investment in your product to focus on sales, marketing, or product efforts. Is the relationship effort and cost needed small — like when you try a free product that might not bring you immediate benefit — or is it quite high? You might be auditioning to solve a pivotal problem for a large business while working on a deadline. Continue reading
Should you give away your product for free? The concept of “freemium” — or providing a product offering that doesn’t cost the customer anything, and allows for the prospect of future upsell — has great success for products like Mailchimp, Dropbox, Evernote, and WordPress. The basic idea is that some number (perhaps as many as the high single digits, but more often 2-4%) of customers convert to paying, and as time goes by and the customer sticks
around, that likelihood to convert increases.
What makes freemium pricing work?
Obviously, the zero cost of a freemium product is attractive. One of the challenges inherent in free pricing is that the perception of value for a free product might also be zero unless a few things are present:
- The product or service offers immediate value to a new customer;
- There is very low or no sales “touch” required for customer success;
- And there is one or more natural conversion points where the customer realizes that it’s time to “buy.”
Things that make people say, “That’s valuable!”
Customers think products are valuable when they solve an immediate problem, e.g. the problem that you had when you “hired that product to solve your problem.” Mailing a list that you already have; sharing a big file; keeping an always-on notepad; and writing a blog post are clear, uncomplicated problems for which solving a problem has instant value. Customers also perceive value when there is low effort to implement this solution, and when the exact thing they were trying to solve gets done.
So what should you do if you don’t provide immediate value to customers using your product or service? You can provide “scaffolding” by delivering a simple procedure that will solve an immediate problem. You can deliver Customer Wow. And you can also actively listen to find the items that customers find challenging – those are great candidates to improve as fast as possible.
It sells itself: the magic of “no-touch” selling
It’s easy to believe that with the magic of the Internet, products will sell themselves. And sometimes they do (it’s amazing when that happens.) Most of the time, however, there is some effort required to close a customer from prospect to sale. When customers help themselves; when there is a large enough user based to provide community help; and when there’s no great economic drag on your company to keep them as “freemium” users – it’s all good.
In my experience, the reality of this process falls somewhere in between the perfect situation where users try and buy themselves, and a fully supported scenario, where they are supported figuratively from “cradle-to-grave.” You can help yourself by identifying the attributes that mark currently successful customers (completed activities, speed and acceleration of adoption, and lots of questions to your support and sales team are often good indicators) and try to recreate those attributes in brand-new users. The best way to do that? “Dog-food” your customer experience by trying it yourself and identify the “cringe-list” of items so bad they would make a new customer prospect drop right out of your application.
When is it obvious for the buyer to upgrade?
Sometimes, it just makes sense to upgrade. Run out of space in your networked drive? Need to send to a larger email list? Want to post even more notes to your connected notepad? These are natural conversion points, and are well crafted ways to get you as a customer into the next tier of value for a company. The number of transactions you complete; the number of connected accounts for a complex product; and enough practice to know that you really want to use the product are all good ways to introduce (or gently suggest) a natural conversion point for a freemium product.
Except when life gets in the way, and you really meant to try that product but haven’t taken the time. Placing time limits on the free trial and starting to charge the customer are great ways to use the idea of loss aversion to force the customer to make a decision (“should I stay or should I go?”) You can also use account management and Customer Wow to make this process easier.
Freemium pricing works best on a product when as the customer you understand what you’re getting, you can get what you want without needing help from a sales or support team, and when you know the best time to upgrade (because it just feels right.) As a product team, if you don’t have these attributes immediately, you can create immediate value by providing steps for the 80% solution or “happy path.” You can lower the required touch by fixing the things that first time users most often criticize. And you can place a time limit on your trials (or just leave the customer alone in a semi-dormant state if it’s economically feasible.)
Do you think freemium works for most Internet products? Or is it an idea that really only fits a few, simple and well defined models of behavior that people already use?
One of the best ways to learn how real people view your product is to ask them to complete a set of tasks that you think all customers “should” be able to do. Think of this as a directional usability test, where you can get some feedback on the way “normal” folks use your product without sitting right next to them and telling them how to complete the task. Yet you can also learn a lot by sitting in the same room as someone who has tried your product and just having a conversation. Even if these people are not perfect examples of your persona definitions, setting up “Friends of the Company” sessions are a great way to make a tremendous leap in usability in a short period of time.
“Friends of the Company” sessions might look like this: every two weeks, line up two or three people to visit your office and ask them to complete a common customer task (set up an account, use the product the way they “normally”, and talk through the progress as they do it.) You should have someone from your design team, your engineering team, and your executive team in attendance, and make sure to give the person some homework before they arrive so that you can capture their feedback.
When your F.O.C. session is running, you should use this focused time to listen, learn, and suggest. You can listen by hearing what a “typical” customer does when you’re not around and hear more about the features that people outside of your building think are pain-killers, not vitamins. You can learn by identifying “cringe” moments that show up during the session, and plan which of these items to address and which to log for later effort. And you can suggest by using this time with a customer to bring up ideas that need additional feedback.
It’s important to note that the feedback you receive in these sessions is just that: feedback. It’s not usually enough to make major changes in usability, and it is an amazing way, however, to note little items that trip customers up when you think they should be able to complete (what you consider to be) routine tasks. Friends of the Company sessions give you a temperature reading of customers and let you know what those people are thinking and whether your message matches their experience with the product.
And matching that message to the product is an important task that’s very easy to practice during the F.O.C. Session. Remember, some of the people who are coming to see you are very talented and want to help, and some are just there to see what you’re up to in building your product and culture. All of this feedback can be really useful if you use it as a opportunity to refine your pitch, your usability, and the real-world functionality of your product.
If you’re like many people, when you hear the term “Agile Marketing” you might wonder if the person is talking about some new dance form or other form of stretching rather than an exciting way to improve the way that you propose, build, and measure your marketing success.
Don’t worry – you can start doing Agile marketing without buying new and expensive tools for your marketing toolbox. Agile marketing can help you define specific goals for your campaigns and find out quickly whether they’re working or not – and give you metrics to decide whether to move on.
Borrowed from the methodology of the Agile software movement that started about 10 years ago, Agile Marketing is a philosophy of getting things done that proposes to shorten the length of marketing campaigns, to get actionable information from those campaigns as soon as possible, and to test these ideas to keep the good ones and spend less time on campaigns that don’t produce results. The goal of this process is to make the marketing process more adaptable to changes in your business.
The purpose of Agile Marketing is – as Jim Ewel puts it – “to improve the speed, predictability, transparency, and adaptability to change of the marketing function.” The benefit of doing this should be obvious: you should spend more time working on the initiatives that work. If you can find the initiatives that work more quickly, you’ll be able to be more effective. And by communicating the metrics that you find important to the business, you’ll be better at sharing what you’re working on.
Does that sound difficult? It shouldn’t. If you focus on delivering things that work, measuring what you do, and build simple, self organizing teams, you can use these principles to get started with Agile Marketing. You can also take the application of Agile marketing ideas directly into your workplace today with these 13 hacks. You can also find some other great resources here.
Beta Customers are the Best Test Customers You Have
In Steve Blank’s excellent blog post on Startup First Principles, he describes a startup as “an organization built to search for a repeatable and scalable business model.” A key driver in building a repeatable and scalable business model is to find the kind of (friendly and unfriendly) customers who are not only willing and able to try partially completed software but also capable of providing relevant, actionable feedback. These beta customers might not be your ultimate customers – or they might be exactly the customers you’re looking for – and finding them and getting them to try beta products is a key requirement to give you the information you need to make business decisions.
When thinking about beta customers – especially early in the cycle of creating ideas and getting feedback on those ideas – Continue reading
Seth Godin asks a wonderful question: “Do you have a people strategy?” It’s a quick read dedicated to reminding us that people, not users, engage with applications and services to make their lives better. If you can make people’s lives better with your application or service, they’ll come back. If you create a new need where there was no perceived need before, you might have created a billion dollar opportunity.
So why is it that so many of our product cycles are devoted to “users” who can learn new “features” that will allow them to “achieve their goals” instead of understanding better what people need by listening to them?
Every Designer’s Fear of the Customer
When you talk to a really good designer, one of their great fears is that a simple, elegant design might be ruined by incessant demands from customers who want lots of capabilities that they will never use (and in fact, don’t really need.) A good example is this concept video by designer Philip Pauley of his “helicopter-boat-plane”: it sounds cool, but the market demand seems to be … underdeveloped as of yet.
Even if the customer is not always right …
Customers (or prospective customers) give you valuable signals when they ask you for things that they want. I agree with the idea that the customer is not always right, but they always feel that they are right. So the more of their helicopter boat plane ideas that you can build (quickly, without a lot of extra frills), the more you will be able to test to see if the idea of one customer actually fosters a habit that other customers might follow.
You can get closer to the customer’s actual (or perceived) need by asking them for only one change: “If you could choose anything to change about this product to make it better for you to use more often, what’s the one thing you would pick to change?”
Gain credibility by delivering some of the things they ask for.
As a team, if you make a list of these “one thing items,” periodically deliver some of them, and highlight the customer who asked you for this change, you will win brand advocates, customer evangelists, and generally understand who your “hero users” are. This will not necessarily translate into market success or market validation. But it will give you much more room and capability to try to build an everyday product that real people use, instead of crafting an application that is utilized by users.