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Marketing In A Web 2.0 World: Why The Best Products Sometimes Win

Posted by Dharmesh Shah on December 11, 2006 in guest development singleton 8 Comments


Note:  This is a guest article written by Andy Singleton.  Andy is a career software professional and is one of the few people I know that can not only talk the talk, but walk the walk.  He has released several commercial products before and has lots of practical advice for others to do the same.  He is currently the president of Assembla which brings open source processes and applications to the world of enterprise software.  
 
Marketing In A Web 2.0 World:  Why The Best Products Sometimes Win

For 100 years, it has been a truism that “the best product doesn’t win.  The product with the best marketing wins.”  At the risk of being thrown out of capitalist society, I claim that on the Web, this is no longer true.  The best product often does win, with virtually no marketing, if it is easy to adopt.

The job of marketing was to bring prospective customers to try the product.  Marketers tell customers about the product, why they should want it, and how to get it.

However, on the Web, marketing is easy.  Too easy.  You can post a link somewhere, it’s seen globally, and potential users only need to invest one click and 30 seconds of filling out a form to become a “registered user”.  It’s easy for them.  They do it by the thousands.

If the job of bringing the customers to the door becomes trivially easy, then what is the hard part of the job?  Getting users to come back a second time is MUCH harder than it used to be.  They have so many other places to go.  It’s all equally weightless.  They click from a 24 hour work place to a global mall with thousands of options.  Adopting a Web service requires users to invest hours – hours that in most cases they don’t have.

So, in previous product cycles, marketing was the most expensive part of a launch, and the product strategy was wrapped around it.  Getting attention was the hard part.  Now, keeping attention is the hard part.  In this new product cycle, figuring out how to get users to adopt is the hard and expensive thing.  Marketing serves the adoption work by bringing in the right number of prospects for us to experiment with (in a nice way).

When I work with entrepreneurs from the old days (anybody over the age of 25), they often don’t believe me.  The good ones unfold their carefully planned marketing budgets and affiliate programs and strategic alliances.  They assume that if they can persuade the customers to try, the customers will buy.  Then they do a trivial amount of marketing – a blog post, an email newsletter ad, an email campaign, and look at the numbers.  A lot more responses than expected, with smaller conversion rates.  At that point, they understand the need to invest in the product and the initial customer experience.

Marketing can be a bad thing because it doesn’t deliver much value to the customer.  Over time, customers try to avoid paying for marketing expenses.  The biggest cost savings available to a Web startup is to cut the marketing budget.  In the old days, marketing consumed 30% to 50% of a launch budget.  That is a lot of money that can potentially be invested in product innovation and customer service.

If you can find the one feature that people will use and adopt, right way, it makes everything else easier.  So, release early and often and watch your usage dashboard.