Thursday, April 23, 2009

Living in the fools' paradise

We often say, "Failure does not just happen, it is designed into the system." One of the most important inputs or required inputs for each and every plan in the project is the assumptions. If you don't do a good job managing them, it is very difficult to do things right. You don't even have the requirements complete, leave alone the specifications, until you have not converted most of the assumptions into requirements. That is the importance of assumptions.

I suppose it is needless to say that the easiest way of designing failure into the system is to base it on wild assumptions or to ignore assumptions. It is the assumptions (or call it sky high expectations) that kill hundreds of businesses everyday even before they start, though they realize it much after.

You build a magnificent website with a beautiful UI. You have a wonderful revenue model and you expect millions in first couple of years. Worst of all, your best friends praise your site and the brains behind it. You know everybody around you likes your site. All that turns out to be meaningless when in reality you even fail to make enough money to pay your salaries. Sometimes you don't even make enough to pay for the hosting costs.

The root cause for this failure, most of the times are the wild assumptions, some of which are listed below:

Everything will go as planned

It never goes exactly as planned. Small changes and adjustments need to be made even in the most well thought and well prepared plans. The difference is that wise planners keep the provisions for easy identification and implementation of changes and others, who think they are wise, do not think any changes will be needed as they are sure that everything will go as planned.

There are buyers for everything

We often assume that everything sells if you try. There are buyers for every product and no matter how weird your product is or how exorbitant your price is someone, somewhere will be willing to buy. In reality people are not so dumb. I am glad I belong to the species in which there is hardly anybody so dumb to pay you for whatever you have to offer. People pay either when they see the value or when there is something in the product that their other feelings override the simple logic. For example excitement, love, anger and suspense, etc. Even for taking advantage for these feelings you need to have the right product, available in the right place and at the right time.

For instance, people do not mind paying ten dollars for a rose that would otherwise cost one dollar on the Valentines eve provide it is sold in urban areas, places that are easily accessible, where there is no problem of parking and provide it stays fresh towards the evening when most of the shoppers are going to look for it.

People will somehow find your website

Some people think cyber space is exact replica of real world. They think everybody cannot fit in one place and that is why we are distributed over the planet, over continents, over countries, over states, over cities and over lanes and by lanes. Therefore, wherever you are on earth, as long as there is a road to reach you, someone will reach you. Similarly they think as long as your site is on the internet someone will find you.

In reality nobody turns up of his own. People have to be pulled or at least told that there exists this wonderful site in the world.

People know what you are offering

People around you might but others don't. Some of them might go beyond you index page and try and understand what you are selling, but most of them will just walk away unless your website is sticky enough to hold them back. Therefore, provide as much information as possible in the least possible words.

Users know how to use a website

I will not say they don't because most of the users actually do. But they might not know how to use your website if your website is too different. It might be easy, but the moment they find it different they walk away. They do not want to take the trouble of going through the learning curve again and again.

Therefore, while on one hand innovation is the backbone of you website on the other don't try and make you UI too different or complicated.

People don't mind to signup

Their minding to sign up or their not signing up is exponentially proportional to the amount of data that you ask them to fill in the signup form. Therefore, ask them for the data that is really important and leave the rest for later.

People will contact you in case they face problems

"Who cares!" that is the attitude of the customers most of the times? When a customer faces a problem that prevents him for doing something that he intended, he simply closes his browser or goes to another website. If he was really there shopping, he would land up in competitors' websites.

Customers are loyal

Many people believe that they can have loyal customers and loyal customers are all that they would need to keep the sales on the top of S curve. If you are one of them, I would strongly recommend Loyalty Myths by Lerzan Aksoy, Henri Wallard, Timothy Keiningham and Terry Vavra. In actual practice, and particularly on internet, customers are not loyal enough to stick on to your website. Instead they are more inclined to try different stuff often just for a change.

Though it is good to try and hold your existing customers, often it is even better to focus more on new customers. From your old customers some will stay anyway and some will leave anyway, that leaves a small group that you are trying to keep compared to a much bigger group out there that you can attract. It is often even less costly to attract new customers than to keep the old ones glued to you.

That does not mean you should not try to hold you old customers but don't do that at the expense of getting new ones and vice versa.

No comments:

Post a Comment