What happens when a would-be customer knows all about your product, but isn't using it?
I’m standing at my neighborhood deli, and the two guys in front of me are staring at the Belly customer loyalty tablet. It’s brand-new, freshly-installed, right there next to the box of beef jerky.
The first guy asks the clerk what Belly is. The clerk has no idea.
Right there, we’ve learned something about how hard it is to implement a new device and train people on it, especially when you’re a fast-growing company. Belly has gone from one full-time employee to close to 100 in less than two years. Belly CEO Logan LaHive says I visited that particular location less than 48 hours after the Belly terminal had been installed, and that the merchant had not yet been trained on it.
When the clerk struck out, the next guy in line chimed in. He said he knew what Belly was, and proceeded to give a short explanation. He described Belly as a customer loyalty reward system that worked across multiple businesses so that customers didn’t need a bunch of different reward and frequent flyer cards.
Pretty good, I thought. Although I was still mainly interested in paying for my drink and getting out of there.
But that wasn’t what I thought was really significant about the exchange.
What was really important was what happened next. The first guy turned to the second guy and asked him the only question that really mattered at all. It was exactly the right question.
He asked him: “Do you use it?”
The second guy said, “Nope.”
Belly is doing a lot of things right. We see the Belly CEO, Logan LaHive, everywhere we look. He and his launch team are doing an impressive job of signing up users--about one million so far--and getting their tablet devices into the market.
And yet. If your prospective customers know all about you and your business, but they aren’t using your service, you’ve got a lot more work to do.
Doing the work
One caveat, for any entrepreneur, is that you have to make sure that the businesses you are targeting are the right kind of businesses for your service, in terms of the profiles of each business’s customers and the frequency with which each customer visits the business. While I realize that loyalty programs are specifically intended to increase customer connections and grow usage, if a customer typically visits a business twice a year, that business probably is not a prime target for Belly or any of its competitors.
For too many young and rapidly growing businesses, it can be attractive to sit back and start believing your own press rather than continuing to press your bets and roll out your business. If you focus purely on awareness and the accompanying adulation, it’s easy to lose sight of the much more critical measures of engagement, adoption, repeat use, and advocacy (Belly says 70% of its users have used Belly two or more times, and that the likelihood of someone returning to Belly again rises each time they use it). Those are really the make-or-break determinants of the business.
If you let the noise and the notoriety knock you off-course, you can find pretty quickly that your connection to your “customers” can evaporate overnight. And frankly, it’s not even enough that your users are using your service. They need to be talking about it and promoting it if you want to ride the virality curve. They need to care enough to share, and they need to do it quickly and with large numbers of their peers.
The only thing faster than the adoption curve of new technologies is the rate at which they are summarily abandoned by the same eager and early adopters. Before you start shooting for the stars, you need to make sure that your product or service matters to your users and that it makes a difference in terms of something they value. (Time, money, productivity, and status are good criteria to start with.) If you aren’t securing real attachment and engagement, and if your attrition numbers are comparable to your acquisition numbers, you’ve got a disaster waiting to happen.
HOWARD A. TULLMAN is the CEO of 1871 – Where Digital Startups Get Their Start and the General Managing Partner of G2T3V, LLC and of Chicago High Tech Investment Partners. He is a member of the Chicago NEXT & Cultural Affairs Councils and the Illinois Innovation & Arts Councils; an adjunct professor at Kellogg; and an advisor to many start-ups. He is the former Chairman and CEO of Tribeca Flashpoint Media Arts Academy. Over the last 45 years, he has successfully founded more than a dozen high-tech companies. @tullman @tullman