When pricing a new product, understanding the tolerance level of the user is important. Knowing what is the maximum you can charge for a product without turning down your customers helps you maximize your revenue. This tolerance level theory applies to every feature optimization. The idea of exploiting tolerance level in product design is to move away from being a purist and keeping interactions clean to finding the right balance between clean product and clean product that makes money.
To be able exploit tolerance you need to understand what your true product is. Example – For most of India, a flight booking OTA’s true product may be booking the cheapest flight easily. Cheapest is the real product, easily might be exploitable for tolerance. A food delivery companies real product is food quality and delivery time, interface of app might be exploitable for tolerance.
Here are some examples that will help you understand what negotiables can be exploited for tolerance. Some product managers might want to call it a Growth Hack.
- Way2SMS – A free SMS sending website. From the time of landing on homepage to sending the SMS, a user is shown about 15 ads. You might call it too much but if you understand the users’ profile you will be less worried about interface and more worried about delivery time of SMS. Way2SMS’s delivery time is under 2Seconds, even in peak hours.
- Akosha – A freemium dispute resolution system for consumers. Akosha has pivoted to being Helpchat. Akosha used to send a notice to the disputing service provider on behalf of the consumer for free. If the dispute isn’t resolved, they charge the consumer Rs.500 to follow it up. I and friends have used Akosha thrice to solve disputes worth Rs.13K, Rs.30K, Rs.1K successfully. In all 3 cases Akosha did not charge, because the free service was good enough. Was there room to charge a fee/tip after the service? Absolutely.
- GoZoomo: A friend used Gozoomo recently to buy a second hand car. They are doing a lot of offline work with the RTO for him, all for free. Charging for actual expenses borne on behalf of the consumer wouldn’t hurt.
- Pinterest – If you land on Pinterest from Google, the first 2 folds are visible without login but when you scroll down further, you are asked to signup. Good balance of freemium.
- Quora– Like Pinterest, Quora only allows you to read the answer that you directly landed on, everything else requires you to log in. Sometimes the user has no problem signing in, it’s just that you haven’t asked him well enough or you have given him a “Skip for now” button.
- FindYogi – At FindYogi, we ask the user to login to see coupons applicable on a product. Most of our signups come from that 1 feature.
- Coupon sites – They open the destination site before showing the actual coupon code. Does the user have a problem with that? Well, their growth doesn’t suggest that.
- Insurance sites – Most of the sites ask you for contact details before showing a quote. If you are really serious about buying insurance, you may not mind it. Afterall, what’s the use of spending so much marketing money to bring the user on the site and not even creating a hook to contact them again.
- GoDaddy – From the time of selecting the domain to buy to actually finalizing your order, they try to upsell you 3-4 products viz. SSL, Hosting, email, related domains. Does it hurt? Well what are the chances that he will bounce from step 2 and go to a competitor to buy a commodity product like a domain? Low revenues hurt more.
- BigBasket – Untill recently, the earliest delivery slot that you would on BigBasket would be atleast 36hrs away. What really worked for them is the fullfillment rate. They were so good at getting what you ordered that they were ready bet on it with a 50% premium on refunds made for non-delivery. And when they promised a time-slot they really delivered then. Delivery slot is a negotiable, partial fulfillment or delay is not.
Not exploiting tolerance is like leaving money on the table. And once you know what the negotiables are, you will work harder to improve the non-negotiables. A lot of times maximizing the negotiable tolerance actually helps you discover a sustainable business model.
The important thing with tolerance level is that your margin in the tolerance exploitation is the opportunity for a new player to get it. BigBasket vs. Grofers is a good case here.
Back in 2005-06 the world had almost come to working with browser apps only. This was after we had started giving up on Yahoo chat as a desktop downloadable tool. Soon after mobile started picking up and WAP sites got popular. Later in 2007-08 iPhones were launched and all hell broke loose. Web developers now had to develop for environments that were different from the traditional web. Nokia’s symbian was still popular in developing economies. And then Android also caught up.
As if all the fragmentation wasn’t enough, browsers like Opera and UC web were running their own standards of HTML and no-JS sites. Google Chrome was lagging in mobile web story due to low bandwidth in developing economies so they started re-directing traffic through Google Web Light. They recently introduced AMP (Accelerated Mobile Pages) as a standard for content sites on low bandwidth. In a bid to reduce bandwidth overload for extended usage some developers took to Single Page Applications (SPAs) as well but that had it’s own challenge in terms of first time load and SEO.
With the whole fight around apps/no-apps, Google is now introducing app streaming for users with high-bandwidth access. So what does a developer do?
We tried to do a break down of all potential interfaces. Here’s what we got. Might be useful to think around this.
Web interface break down for India. (Click to expand)
Facebook’s events’ RSVP earlier had 3 responses – Going, May Be, Not Going. Lately, I have started seeing the responses as – Going, Interested, Can’t Go.
- The change from May Be to Interested may not mean much as both are non-confirmatory but Interested is more positive than May Be.
- Changing Not Going to Can’t Go is a major change. Can’t Go already has a sense of willingness to go but declining due to uncontrollable circumstances. The aim of the event RSVP is to capture data for the host in the most positive way, and this change will enable more people to respond without hurting the host’s sentiments or feeling guilty about it. Facebook has done this earlier also.
The UX of Social products has a lot to do with copy writing. Those little changes will make all the difference in engagement rates. Read more here.
Update: Facebook has 2 sets of responses depending on whether the event is public or private. This makes the detailing all the more interesting.
FirstCry, ecommerce company for baby products, is asking shoppers to upload pictures and videos of their child with the product. These pictures would be showcased on the product page.
This feature is a win-win-win for existing users, potential new users and the site.
1. Rewards – For the reviewer. Seeing your kid featured on a popular ecommerce site is a huge ego boost for the parents. This is almost like a mini celebrity stature. This is lesser effort than writing a 200 word review.
2. Testimonial – It’s a proof that someone else has bought the product from this site. It is more than just saying “Genuine buyer”.
3. Better Decisions – Since these are genuine non-paid pics, shoppers are more like to trust them and can easily visualize real world view of the product.
In the days of selfie, expect this trend to catch up with other ecommerce portals.
Cleartrip has launched Activities. As the name suggests, the section lists various activities that you can take up on weekends or otherwise. While it might look like a new product vertical for travelers, there is more to this product vertical, or rather engagement strategy.
There are 3 things to note about this feature:
1. It is app only.
2. The launch cities are not where people go to travel but where the Cleartrip’s audience lives.
3. The activities chosen are for locals, not for travelers visiting the place. Most of them.
For a segment like travel booking, which happens couple of times in a year, most people would uninstall the app after a use. This feature gives the users a reason to keep the app and open it every week. I would expect Cleartrip doesn’t limit itself to paid activities only.
It is very important for transaction systems to have an engagement feature else the acquisition cost is not limited to every new user but for every new transaction. And with transactions being a commodity, the product might just become very difficult arbitrage game.
Your product always needs to do more than just the feature that makes you money.
Incase you like this feature, Explara and Townista are doing this decently.
Flipkart had recently promoted an engagement tool on its app, albeit short lived – Read about the #ThumbThing.