If you build software, you spend a lot of your time thinking about two things: optimization and scale. How do we get more website visits? How do we lift conversion rates by 20 percent? How do we reduce cart abandonment? How do we drive more page views?
At b8ta, we’ve built a retail showroom for consumer hardware and IoT that’s powered by software, but it’s not all about software. It has been open to the public for 50 days now and in that short time, it has exposed a simple truth about building any great product: people use products, and clicks, taps, page views, or shopping carts additions only serve as a very loose proxy for what they want.
Each one of the users of our product (the store) is a human being that walks in with all their desires, needs, and problems. We have the pleasure of speaking with all of them. The thing is, that same statement is essentially true of any software product too—but we rarely see it that way because we check our Google Analytics dashboards and measure progress in volume, not individualized insight. Each person who visits your website is a human being with desires, needs, and problems too.
Focus on the humanity on the other side of your network cable. When you think of the human being—and not the actions he or she will take—it’s so clear that experimenting with making the blue checkout button orange and bigger isn’t the highest leverage activity to massively scale your business. You’re going to massively scale your business by understanding your customer 10 times better.
A lot of times, companies get to something that looks like scale very fast and then hit a wall. It is possible to scale without understanding your customer very well. But you will need to continually improve your understanding to keep moving forward. And for that, hiring more software devs and PMs to crank out more features won’t help. You don’t have problems that can be solved with code, you have a human problem: do you understand the people—not the data—who use your product?
Let me share a few of the product insights we’ve learned about people by operating a brick and mortar store.
1. Scale Passion, Not Facts
Before we opened our doors, we knew product training for our associates was going to be an ongoing challenge. Consider that we have more than 60 complex hardware products in our Palo Alto store, which is a metro that’s home to some extraordinarily sophisticated and technical people.
Our makers initially trained our staff directly (we call them b8ta testers). This made our staff incredibly knowledgeable and passionate about the products we carry. But ongoing, in-person training doesn’t scale very well for the makers, especially as we grow and scale ourselves. So we started video recording the sessions so we could play them back to new b8ta testers as we hired them. It’s the kind of solution a software-minded person comes up with.
However, we discovered quickly that if we took this approach, we were scaling, but we were scaling the wrong thing. What makes a great in-person customer experience is the b8ta tester’s passion, not the facts they know about the products. So how do you scale passion? By understanding that passion is contagious.
We initially became passionate by talking to the passionate makers. Our new staff had to become passionate by talking to the existing passionate staff. So we now do training exclusively through someone who is part of that unbroken passion chain directly from the maker.
2. Sell Products with Use Cases, Not Specs
We have also noticed that most people don’t really care about specs or even features on hardware products. And yet, so many product websites spend so much time talking about the specs and features and benefits and sensors. Yes, you have the occasional person who wants to know if a WiFi security camera has bluetooth and 1080p video. But most people just want to know if the camera will tell them when their cat is on the kitchen counter.
In other words, what drives a purchase or engagement is one killer use case. We have a WiFi-enabled digital photo frame called Nixplay. Nobody cares that it has WiFi. The feature we’ve seen that continually sells the product is that the photo frame has an email address, so you can send photos to it from your phone.
3. Price is a Feature
Too many companies (especially hardware companies) don’t spend time iterating on the price of their product. And yet, from talking to customers in real life, price rules everything. It’s the first thing they look for and want to understand, even before learning about a product. Makers should think about their price as a core feature. Build a team around improving it (and your COGS, obviously). Test it and iterate (you can use b8ta tools to adjust pricing in real-time in our store). Think about alternative business models that can help drive the initial price down.
You can trick yourself into thinking you have the right price. A price that’s too high may work in your crowdfunding campaign where you’ve identified the only 5,000 people in the world that would pay that price, but it will not be an infinite well of revenue. It’s one reason why so many hardware products have a great launch and then crash in their second year. A price that’s too low means you’re leaving money on the table. But the right price will be the wish-fulfilling tree. We have some products at the right price that we sale multiple units of every single day, consistently.
4. Optimize for Quick Decisions
Working inside a brick and mortar store has helped me understand why things like Twitter’s “Buy Button” rarely prove to be a scalable business model. Most people are not going to buy something because they saw it once in a tweet. People have a long path-to-purchase by default.
People have questions after they’ve discovered something new. They want to read every review and forum and see how it works. They want to get someone else’s opinion. They want to demo the app. They want to see it in person. They want to touch it and try it. Google it. They want to sleep on it. The people who ultimately become your customer may need to see your brand and product five, ten, or twenty times before they’re ready to buy.
You can’t force it. But the better you understand your customer’s human desires, needs, and problems, the better you’ll be able to speak to them and the faster they’ll connect with your product and make a decision. Optimize for getting a customer to a quick yes or no purchase decision, not to get them through your conversion funnel faster.