INPUT VS. OUTPUT
Think of it like a rechargeable battery. If one is constantly drawing amps from that battery, with no charge time, then one may (quite literally) drain the battery past the point where it can be recharged. Not good.
WidgetLaboratory has been spending the last few days working on input rather than our output. Why? Two reasons:
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First, the quantity
of premium network creation at SocialGO and Zocku has escalated
dramatically.
Though we won't call this a "hockey stick" moment just yet... it has set off our early warning radar system. As a result, our daily level of customer support and widget sales have climbed exponentially. Having a greater number of premium customers means that we spend more time with customer service, which also means that we have less time to step back for creative endeavors. While the reward of helping happy site owners monetizing their networks is great for the soul (and our our bottom-line), it is terribly hard on our creative energy level;
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Second, we have found
that there has been a palpable shift in the nature of Social
Networking.
We want WidgetLaboratory positioned to meet this shift and create greater value and benefit to our customers, which ultimately translates into greater revenues. This requires us to occasionally step back and view strategy from a fresh perspective;
Fast forward to 2009 and we now have a different scenario. The game at the Ning stadium has become more like a scene from that 1977 movie Black Sunday, with no one knowing if they will escape the planned flachette-bomb that flies closer and closer. On the other hand, those who have been motivated enough to escape Ning stadium and move to SocialGO or Zocku have found that they no longer look at Social Networking as a "toy" with which to play.
Most network creators have now divided into two camps. Those who are doing it for fun and those who are doing it for business. The first category of creator still has a wide variety of resources for creating free social network features or functions, but must accept that there are now very clear limits to what they will receive for free. These are the individuals who don't want to pay for any product or service, never have, and likely never will. Suprisingly, these indviduals are typically the most vocal critics of any free service, which is one of the reasons that many people (including the LAB) believe that Freemium is not a business model.
The latter category of creators are now the primary focus of post Web 2.0 companies providing tools and services for Social Networking. These creators are neither early adopters, whiners, nor freeloaders. They are typically intelligent business-minded individuals who are willing to pay a reasonable price for a reasonable product or service. Most importantly, they absolutely require a "one-stop" solution to all their needs. None of them has the time today to wander around the Internet looking for an expert here or there. Instead, these "new" creators are looking for a trusted-friend or confidant to whom they can turn to deliver the goods.
During the last week or so, we've been spending a great amount of our time thinking about how we can increase the value of the Lab's services and products, in order to foster a greater level of trust, reliance, and interaction with our growing list of customers? This is a delicate balance, because it is easy to lose site of the quality of interaction when one is focused on growing the volume of customers. Being students of philosophy as well as business, we've found our answer by putting a new twist on the classic Socratic Method.
The Socratic Method (or Method of Elenchus or Socratic Debate), named after the Classical Greek philosopher Socrates, is a form of inquiry and debate between individuals with opposing viewpoints based on asking and answering questions to stimulate rational thinking and to illuminate ideas.
Rather than trying to please all network creators, we believe that we can utilize the Socratic Method to quickly determine which creators will ultimately benefit from an intimate working relationship with the LAB and SocialGO. Those who demonstrate themselves to be in the former category above (the freemium category) will never provide a reciprocal benefit for the time, effort, or capital expended to nurture the growth and development of their Social Networks. They should be directed to utilze any of the remaining Freemium model services, including Ning, Grou.ps, Elgg, WetPaint, or others. Those in the latter category will thereby receive even greater benefit from our undilluted knowledge, products, and resources. It's easier to server your true customers when you aren't distracted by "millions" of free networks.How does this work in practice? Quite simply, we've developed three steps that act as a form of "inquiry and debate" with those who come to the LAB:
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Require a customer to
demonstrate sincerity by taking an action or making a
purchase - Freemium requires no effort, and therefore
anyone can join a free site, regardless of whether they ever
wish to start a true relationship. Asking that customers take
certain small but thoughtful actions, or make an actual
purchase, ensures that they are invidivudals who truly seek the
products or solutions that you have to offer. This is a sort of
"virtual" question you ask of a potential customer... "Do you
really want to be our customer? How much?"
It's not the price you ask that matters, it is the motivation that they demonstrate. We once offered a product for one cent on Ning, because it required people to still go through the effort of a PayPal transaction. By providing their PayPal credentials and making those few extra "clicks", they proved to us that it they were sincerely interested in the relationship, and were not just window shopping;
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Interact directly
with the customer via chat, telephone, or video messages
- It is easy to have an automated "help" system in place to
answer customer inquiries with canned responses. But that
causes one to miss an opportunity to generate greater sales
revenue through personal interaction. No one wants to be just a
number, and everyone responds well when a company reaches out
to in unexpectedly positive ways. Just look at how Zappos built their customer
loyalty.
At the LAB, we've found that most of our dedicated "fan boys and girls" are folks who originally purchased one product from us, then asked us to help them with some completely unrelated issue. They were so pleasantly surprised that we took the time to contact them directly and interact, that we became their most trusted resource for everything and anything related to the Web. To this day, these customers look no further than the LAB for answers. Even though we don't sell them a solution every time, the balance of the relationship is extremely symbiotic and beneficial for both parties. The value of the good will and viral marketing by these customers is enormous;
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Learn how to say
"NO" - As warned in the old cliche about not being able
to "please all the people all the time", one has to be strong
enough to realize that some people will simply never want a
symbiotic relationship. Whether you call them "trolls" or
"whiners" or "freeloaders", there are simply people who expect
everything for free, and will complain even when they get
things for free. Life is short, and the world has more than 6.7
billion people, so why waste a single minute trying to please
those who will never be pleased?
Instead, we use steps #1 and #2 above when applying our Socratic Method to potential customers. If it becomes clear that there is no sincerity or positive response to personal interaction, then we just say "NO" and politely decline any further requests for help or assistance. We need not be rude, as a simple disregard will usually suffice. Surprisingly, such aloofness has actually converted some creators from the former category to the latter. Maybe playing 'hard to get' works as well in business as it does in dating?
Now that the battery has been "charged"... it's good to get back to work!
Comments
NING MIGRATION
10 Comments
PS: Do you have copyright over the word 'freemium' as I would like to use it too (but I do not want to pay for it)
lol
P.s What is CMS ? o.0
Interesting post. Have thoughts for you. My sense is that the Socialgo platform has the opportunity to carve out a strong niche that includes three tiers -- (1) freemium-style network owners, (2) step-up semi-tech savvy network owners seeking both access to a network with robust API and custom add-ons/widgets to extend the social experience across other online websites and tools, and (3) advanced users leveraging the platform for a more open and cost effective way to achieve what (to date) can only be done through ground up development or very expensive white label providers.
One of the challenges I see right now is that Socialgo still has not advanced far enough in the basic development to reach to the level of a Ning (or the other freemium models). It has so many other really valuable elements that folks like me have made the decision to wait. But -- Socialgo COULD still grab more of a blue ocean position by more strongly differentiating it's freemium model from its step-up open platform/layout manager.
Yes - go ahead and offer the freemium model - but then step up a bit further with well developed open platform/layout manager version that stands alone in the crowd. And then dont' budge from that position. Do not let the freemium creep up -- or the open platform/layout manager version creep down. Build a robust alternative in the middle.
Socialgo also needs to VASTLY improve their own customer service. And, get on with some of the basic features that are ALREADY present in the freemium models. It is like pulling teeth to get Socialgo to just live in reality. To make the simple case for a "read more" link in blogs - I had to push, push, push. And, yet -- if Socialgo wants folks like me to build large networks - we need these simple/core functions. Widget Laboratory ends up picking up the slack as your instincts are to provide customer service with a passion. And, so often this sort of customer service is all for the freemium-types of folks.
If Socialgo will step up and do their jobs to provide REAL customer service, Widget Laboratory can truely differentiate as THE provider for the second and third tier network creators. You may need to display how well this platform can be used to extend through the API to other websites, platforms. One of the characteristics of the "level 2" semi-tech savvy network owners is they often do need to have the benefits spelled out for them. [That would mean the API has to really get going. I had to give up several months ago with the single sign on option after wasting hours and hours of my technology guy's time - and finally hearing from Socialgo -- well, gee, it isn't really working yet.]
Socialgo has GOT to get the platform really ready for the next tier users - or you will be buried trying to help the users that really are freemium users. And, you have to show folks more HOW to use the openness of the structure so that next-tier users "get it" and can put the pieces together to build expanded platforms off of the Socialgo system. . . .and take advantage of your tools and your services to make this happen.
That will make SG even more interesting for us.
Exactly 10 years ago, in the summer of 1999, I was one of the earliest employees of a pioneering internet video company called IFILM Networks. Basically YouTube 5 years too early. But they were funded at around $35 million. During some of our meetings, the on-going debate was "chasing eyeballs" vs "chasing dollars". Even then I was an advocate of quality content and customer service offered via subscription to niche audiences of the most motivated customers.
However, as with many companies of the era "chasing eyeballs" won, at least until the dotcom bomb. After which everyone scrambled to figure out how to make dollars. IFILM's publishing and pro services (fee-based service) carried the company a few years then they were bought by MTV and dissolved into the megacorp.
I also agree with Muggzzi and Frank. The SG platform and universe would benefit tremendously from a few high profile network examples:
1. of successful businesses and subscription community built around the platform
2. of successful, extreme integration of SG with multiple web services and leading open source apps (I know you have been leading the way in R&D EG, but we need examples of sites pushing your widgets and the SG API to the max.)
3. more examples of extreme makeover's of SG styling (as demonstrated by ProSG) and template integration with other service (btw, a simple splash page option would do a world of wonders. ).
Either case, I believe we are in another pioneering period, Web 4.0. It's not an easy road, as trails and business models are being discovered and standardized. I'm just excited to be able to participate during these developmental stages.
I think wayy to many business try to run before they can walk. They think success is in the traffic and eyeballs. Trust me, its not.
What always happens is that companies spend hours and resources trying to make the free people happy and alienating the concerns and criticisms of those who actually WANT to pay for the product or service and actually want to see it succeed.
I switched over to SocialGo 8 months ago and 8 months ago, I was willing to pay money (upfront or via subscription) for a reliable platform for my business. And I had to wait while my concerns and criticisms (which were actually designed to make the site more competitive) were seemingly overshadowed by the requests and problems posed by the free networks. After switching from NING, I had to deal with the delays, bugs, feature requests. I mean, how long have we been asking for a chat room? Whatever it costs, I don't care, I just need a private chat room!
But Im patient and I waited and now Im happy...as a subscriber. I love SocialGo and am happy I made the switch. But, I think I (and most companies) would have been happier to start by charging, listen to the feedback of people actually plunking down money every month and slowly grow by word of mouth. But, thats just my opinion.
As for the freemium. My suggestion for SocialGO is to copy ning and make the the free sites linked together build those networks by feeding off each other. The owners wont be happy but who cares they are not paying one red cent or just do away with it all together and not ask for a credit card for the first 30 days so someone can try out the platform in its entirety.
Freemium doesn't not work. I tested this with free themes. all I got was email after email asking how to customize the FREE theme as if the theme wasn't enough. I got rid of them quickly.
You have to figure out who your customer is and make those people happy and they will buy again and spread the word about your site or business for you.
I totally hear ya. Well put. I only have a new starting network, but I can say that I'm going exactly through the same... in a few words: make them pay. It's the best way to throw out the trash.
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