Our previous article looked at the economics of a Freemium business model. One element that is key to making a strategy that involves “free” work financially is growing your user base. One way to get that growth is through a word-of-mouth marketing campaign. This article looks at different elements that characterize or affect the successfulness of a viral product – from a product management perspective.
Word of Mouth
We wrote about the dynamics of how to maximize your word of mouth a couple years ago. Essentially, you create a product and a situation where people want to tell other people about your product. Ideally, your customers (free or otherwise) will like your product so much that they want other people to use it – not just know about it. Word of mouth is a double-edged sword however, so you have to be careful about the propagation of bad word of mouth too.
Word of Mouth Marketing
People in marketing, PR, and corporate communications talk a lot about viral marketing. Viral marketing is when you create a message that is implicitly viral, causing exposure for your product. This is different than viral product management, which is when you create a product that is self-promoting with similar dynamics to a viral marketing campaign. A great example of a viral message is the Mentos / Diet Coke videos.
But this phenomenon was viral because of the message, not because of the product. This article focuses on product management – the things we do to make a product self-propagate, not the explicit marketing we do to get awareness. You can think of the product management as implicit marketing – a feature or capability may have a direct impact on your word-of-mouth.
Word of Mouth Product Management
As a product manager, when you need or want a viral vector by which you grow your customer base, you can either rely on word-of-mouth marketing (see above) or focus on making product management decisions that encourage the same communication dynamics (see below). At a high level, you simply need to create a product that your customers want other people to start using, but they have to want it “enough.”
iPhone Market Data
Pragmatic Marketing likes to remind us that our opinions, while interesting, are irrelevant. Greg Yardley of Pinch Media shared a really interesting analysis on ad-supported versus for-a-fee iPhone apps that came out a couple weeks ago.
This presentation is an analysis of the economics of publishing an iPhone application as a for-a-fee product, or as an advertiser-supported product. [Hat tip to Andrew Chen.] What is most relevant to viral product management is the graph on slide 26.
What the graph shows is that the top 10% of ad-supported applications break away from the other 90% in terms of usage. The reason (in that presentation) for looking at the data was for measuring the CPM (cost per thousand impressions) based revenue for applications, in comparison with the charge-for-the-application model. At the end of the day, the free version makes sense, but only for the top 5% of applications, according to Pinch Media. For the rest of the field, a for-a-fee application will probably generate more revenue.
What is glaring in that data is that the applications in the top 10% (the discrete red line at the top of the graph) are not the same as the other applications. Something is different that causes users to want to use those applications a lot more. As a product manager, I believe that those applications have crossed the suck threshold. In other words – they are a pleasure to use. What Pinch Media’s data also does not show is how viral the applications are. In other words – do the top 10% (in repeat usage per user) applications also have the fastest growth (in user count), and if so, is it by word of mouth.
My premise is that the applications that are most pleasurable to use are the ones that can achieve viral growth. These are the applications that you want to tell other people about.
As a user-centered product manager, you are spending some of your time on customer delight features and capabilities. These are the things that wow a customer, and cause them to want to tell others about your product – simply because it is cool and useful. You’re also spending time on the more is better features and usability concerns that make a product a pleasure to use. You keep making it better, because there is clear ROI to increasing your user base, and improving usability makes it more likely that people will tell other people about your software. Eventually, your product will be good enough that people will start telling everyone, and your growth will start to climb.
One of the dangers of this incremental product growth strategies is that you catch a case of featuritis. Very rarely will you hear people clamoring to remove features from your product. You’re more likely to hear a steady stream of “one more thing” requests. Too many features can make it hard for people to learn how to use your product. There’s a threshold of user tolerance for features. Too few or too many features, and your product will be unpleasent to use. Above that limit, the product is a pleasure to use. Kathy Sierra coined the term suck threshold, to mark this delineation.
The following diagrams are from an earlier article on featuritis, and build on some great ideas from Kathy Sierra. These focus on the holistic “how good is your product, from a user perspective” question, and take a Kano-analysis approach to looking at ways to improve your product.
You can improve the curve for any particular product by improving the user’s experience with “more is better” features. You can either improve usability or performance (or both) and change the shape of the curve above.
Given the above dynamics, and Malcolm Gladwell’s concept of a Tipping Point, where things discontinuously change, there will also be some threshold by which your product is so pleasurable to use, that people will feel compelled to share it.
Since 90% of the applications didn’t appear to tip in Pinch Media’s analysis, I’ll show the default tipping point as being out of reach – at least until you do something about it.
Two Modes of Viral Product Propagation
There are two primary human-nature mechanisms by which a product will propagate virally – altruishm and selfishness.
- Altruism – You should use this product because I love it and you will too.
- Selfishness – You should use this product because If you use it too, it will be better for me.
If your product falls below the suck threshold, I don’t believe you can sustain any form of viral growth. Sharing a product recommendation builds on trust, so sharing something that people won’t like will erode that trust. I believe this is a self-correcting behavior, and what little sharing may occur will be short lived. A product that gets shared because of altruism needs to not only be better than good, it has to be so good that you’ll go out of your way to tell people about it – with no expected benefit for yourself. [Note: other than the self-reinforcing positive feeling you get from being altruistic.]
Leveraging Altruism as Viral Mechanism
Altruism is an interesting viral dynamic. If you make your product so good that people feel compelled to tell their friends about it (or blog or tweet about it), you’ve got a great product. Product management decisions to achieve this are easy in that you only have to make the product fantastic for your users. At the same time, your product management decisions are difficult, because you have to make your product good enough to cross the tipping point. The iPhone, Synergy, Sherwin Williams paint (when the first local store opened in Austin, the owner was stunned by how much demand was out there), Tweetdeck (a Twitter client), and GMail are all examples of this. Additional users / customers don’t make the experience any better for the current users, but people still rave about it to their friends and associates.
Leveraging Selfishness as Viral Mechanism
The are two ways to leverage people’s inherent selfishness when developing products. The first (and harder) is to define capabilities or features for the product where the customer’s experience is better when more people use the product. Twitter (and Facebook and other social media applications) take advantage of this. If you’re using Twitter as a broadcast medium, then the more people who are out there to listen to you, the more value Twitter has to you. So you encourage people to use it. On the reverse side, if you’re looking to Twitter as a source of good information, the more people who are out there sharing information, the more valueable this channel is to you.
The second, and easier way to reward customers for encouraging other people to use your product is to explicitly reward them. Affiliate programs, finder’s fees, account credits, or other compensation can be given to existing customers, in exchange for signing up new customers. A software as a service variant of this would be a program that rewarded you with credits to your account for every customer you refer, for as long as both of your accounts are active. People can get your product for free if they encourage enough other people to sign up.
Both of these selfishness-model variants, to be sustainable, need to be leveraged to promote a product that is actually good.
The altruism model won’t work if your product is not better than good, but actually exceeds a tipping point.
You can create viral messages or videos that spread awareness of your product tangentially, or you can create programs that encourage people to promote your product, or you can create products that promote themselves. As product managers, if your business model relies on viral growth, you can either take ownership and create viral products, or cross your fingers and hope for viral promotions.