The next product wave will be invisible

This might seem strange, but in my experience some of the best products I depend on are invisible. What do I mean by invisible? I mean that I give then access to information and they provide value with no work on my part.

“Set it and forget it” apps or services are the most obvious version of this trend and start with news alerts. It’s super valuable to find out when there’s news about a friend (Newsle) or if there’s a recall on something that I bought (Slice) or news about a company or keyword (Talkwalker).

The next level of complexity for invisible apps is the ability to provide value and time saving even if you are not actively telling them what to do. my favorite example of this is Sanebox – it filters email into likely groups with almost no effort on my part. Among newer apps Google Now looks like a new and powerful predictive service based on this idea (watch what you do, provide relevant actions, learn from actions).

It would really cool to extend this invisible app quality along with the ability to learn to make “recipes” that get smarter over time. The folks at IFTTT have used this approach to combine “channels” (e.g. Instagram) with “actions” (e.g. Upload to Flickr) to create time-saving automatic procedures. So what’s next?

The next version of invisible products will observe, record, and recommend “best practices”. These products will make predictive recommendations based on where and when you are. Invisible products will also provide collaborative filtering for these “best practices” to help you know what recipes people like and what recipes actually improve performance. And these recipes will form a continuous improvement input for people using wearable devices.

Does this sound futuristic? Maybe. Now put on your 2005 hat and ask how many people would check their email, video chat and message for free, and otherwise create an entire industry disconnected from the PC. The next wave will be invisible.

Share some interesting things with customers every day

photo by http://www.flickr.com/photos/niklaswikstrom/
photo by http://www.flickr.com/photos/niklaswikstrom/

Here’s something interesting I read today on the effects of smartphones on shopping. The article matters because it’s about a big trend (changing habits in shopping, especially in everyday environments like grocery stores) and has long-term societal implications. For example, what will be the next social habit that’s disrupted or changed by smartphones? You might wonder why an article on shopping and smartphones matters to our conversation.

I shared this link because I thought it was intriguing and could help you with your day. You might not have liked it if I shared a cat video, pictures of breakfast, or another Internet cliche (or maybe you would. Everyone needs a momentary distraction now and then). I believe that when the content is truly useful to you, it will make your day better.

When you share content with customers, you should make the same decision and thought process. What’s interesting to your customer? It might be something you care about deeply that’s related to serving the customer. It might be a piece of relevant information about your product or service that you feel they should know. And it might be an article about larger industry trends. In any of those cases, sharing to the customer should create value.

And value is subjective, so it’s not often easy to decide what to communicate. Aside from the obvious (be smart, and only share the things you would want other people to attribute to you in public), there are a few easy ways to share what’s going on in your industry, what you think the customer should know, and how to share what you care about in a thoughtful way.

First, start with the context – what matters about this item? For an industry-relevant post you could be sharing information about trends, market validation, and the “big picture” – the shopping article linked at the beginning of this post is a great example. The knowledge is relevant because it demonstrates how society is changing in long-run ways, and will change behavior.

Second, you should also share why you think this item matters to the individual (or to the class of customer). When you’re sharing product or service knowledge, if you present the information in a value/benefit statement it will be easier for the customer to see the value of the content. “What’s in it for me?” should be your mantra when viewing the content from the customer’s perspective – if there isn’t value there, perhaps you should share something else or not at all.

And finally, it’s ok to share things that matter to you that aren’t directly relevant to the customer – just make sure they are broadly applicable. Imagine the “how would this play on the front page of the New York Times” test and you’ll figure out pretty quickly what not to share (and if you don’t know, ask a friend first). When you share, focus on incremental improvement. Don’t be afraid to ask customers, employees, and partners: “how can we do better”?

What makes freemium pricing work?

Free
photo by http://www.flickr.com/photos/bstabler/

 

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?

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