Lessons Learned At Business of Software 2010 Conference
kalzumeus.com
kalzumeus.com
"many companies I have worked with have “sticky features”, although not all of them know it. (Some day when I don’t have another few thousand words to write I’ll tell you about what they are for Bingo Card Creator and how I know.)"
Capsule summary: if you were to personally log into an arbitrary trial customer's account, you could predict whether they were likely to buy the software based on your intimate knowledge of customer behavior, and your guess would be far better than random. You can code heuristics to make that guess. You can make your heuristics adapt to data you collect, such that they no longer depend on your (flawed and limited) intimate knowledge.
Pretend that you assign customers something like a credit score, and simply chunk them into four buckets, from "people I'm most confident will buy the software" to "people I'm least confident will buy the software". My conversion rate for the free trial of my software is ~2%. Bucket A is closer to 20%. Bucket D, the largest bucket, is below .1%.
I think there is a way to take the knowledge that the customer who is using the app right now is in Bucket B in a fashion which makes the business a staggering amount of money. (Identify the customers at the margin, then push them over it.) What I lack, which has prevented me from blogging about this, is an empirical example of it working that I can talk about.
I think it is potentially as simple as "Offer them a coupon." or "Give them explicit directions on the interface to try the features that you know distinguish bucket A from bucket B." These interventions are, of course, split testable.
"Key takeaway: The quality of your dialogue with customers is directly proportional to the quality of the customers you will acquire. If you understand their needs better, you will close bigger deals with happier customers who consume less resources"
Those words, mate, are essentially gold dust. I wish I could pay/donate for this content. Seriously.
See my other comment about including it in Hacker Monthly. I do hope the curators include it in the next issue.
A question for Patrick or anybody else about the following email advice in the post.
"Free tip from me: note what search term sent them to your website, put a variation of it in the subject line of the email, watch your open rate go through the freaking roof."
Did this mean just in general to let search terms inform how you write email, or that the list segmentation is that specific for any opt-in list member who happened to come by search?
The net effect is a few hundred people tomorrow who looked for [Halloween bingo cards] today and forgot about it will get an email tomorrow with the subject How To Make Halloween Bingo Cards. My open rates are "quite nice."
Edited to add: I got a note from the Mailchimp CS people back in April about having an unacceptably high unsubscribe rate (1.04% -- they take list quality seriously), paused my campaign to look into it, and forgot to unpause it. facepalm Thanks for prompting me to check on this (as usual, I don't look at things I think are working -- too much to do).
As a side note: Patrick's talk was awesome. Those lightning talks were brutal, I'd never want to go through that myself but I'm very glad he did it. The video is going to be great I'm sure but it's no substitute for being able to watch him put on a show in person. I highly recommend going next year if at all possible.
Out of interest: How many hours of your time were approximately invested in writing this blog post? A rough estimate is fine enough.
One thing I found intriguing was this: “why pay people so that they can buy objects suggesting social status when you can just award social status directly?”
Do you have examples of this sort of thing? (Other than the one you specifically didn't mention.)