Tech used to be oriented toward power users--IT professionals who could both understand and afford the complex programs being offered. But as the price of technology has decreased and accessibility has increased, companies are aiming squarely at users themselves.

McKinsey & Company found that the fastest-growing businesses owed their success to recurring revenue (i.e. customers), even more so than to an expansion of revenue streams. Churn rates-the annual percentage customers stop subscribing-have become vital to success for software as a service companies, in fact; one analysis found that the ideal churn rate for these companies was 5-7 percent annually.

As technology becomes more consumerized, it makes sense that tech companies' success is very closely tied to how many customers they keep happy.

1. Don't create a tool, create an experience that keeps people engaged.

Social media is often credited--or blamed--for this move toward consumerization. When early platforms like Myspace enabled users to customize their profile pages, changing their backgrounds, photos, and music, consumers began to demand more from other companies pursuing their business. Their standards for functionality and appearance heightened as they became exposed to more user-friendly approaches.

It used to be enough for enterprise-focused software packages to simply do their job, but they're now expected to provide a high-quality user experience. Business-oriented software got away with a clunky and difficult-to-follow interface because it provided essential functions and wasn't held to the same standards as consumer technology. That's all changed.

John Maeda's "Design in Tech Report" crystallized the importance of design in technology. He found that in a five-year span, 27 designer-founded companies were acquired by corporations like Google and Facebook. He also revealed that companies with designer co-founders were attracting investments at a high rate, and in 2014, VC firms started actively adding designers to their teams.

2. Focus on the end users, not the buyers of software.

All these figures underscore the importance of UX. They also highlight the role consumer sentiment plays in developing technology for the workplace. Isa Watson, the founder of social community platform Squad by Envested, said it's important to realize there's a big difference between required employee software and optional software. "Software that manages payroll, benefits, or expenses has to be used," Watson says. "But businesses are seeing diminished engagement with optional software because people have just stopped using platforms that don't provide a good experience. They get less value than frustration out of the experience, and they abandon it--and companies lose significant investments."

Watson says three things set apart the most successful: high-quality UX, low time to value, and few people needed to get that benefit (such as chatrooms). While most enterprise platform sales pitches focus on the buyer, winning platforms beat out the competition because their messaging is clearly suited to the end user. The smartest will focus on the daily users, not just the buyers--with businesses spending $3.5 trillion on tech per year, they're becoming more sensitive to low adoption rates.

3. Create a community that keeps people engaged and drives off competition.

But Watson says those aren't the only elements playing a big role in the consumerization of technology: Consumers' need for community is also a factor. She says that when her mom was building community, she did it through church, school, and PTA meetings. The digital age, however, has enabled the formation of digital communities. People no longer have to meet in person or share a fundamental need to be put in contact.

"Gary Vaynerchuk is a great example because he doesn't just have a huge group of followers; he creates community among his following and cultivates it through digital means," said Watson. "The shift in the digital age has resulted in people having a much bigger appetite for social interactions in the workplace, which is much different from our parents. There's not as big a barrier between the workplace and home." 

Smart enterprise-oriented tech companies focus on ways to establish community within their platforms. By getting end users to engage with each other through their platforms, those platforms become essential parts of not just getting work done but also keeping people engaged. Gallup found that women who have a best friend at work are twice as likely to be engaged with their workplace as those without a work best friend.

When starting a business your tech and its functionality is important but not critical, your UX is. Uber and Lyft aren't high-tech. How we even categorize tech has evolved. Don't try and outsmart your competition. Try and empathize with your future customer. Remember that you're solving a need and addressing a pain point more than anything else. 

Published on: Oct 8, 2018