The "New Coke" Lesson: The Compulsion to Upgrade Can Produce a Marketing Disaster. Consider Vista and (Maybe) Evernote 3.
May 28, 2008
If you are in business, there are ways to be successful. A good way is to get the equivalent of a monopoly. But even monopolies tend to dissipate (except for Arm & Hammer Baking Soda). Here's why: an unwillingness to listen to clients. "What do they know?"
They know how to shop for alternatives.
The story of Microsoft Vista will go down in history as a self-inflicted wound that opened the door to the Mac. It won't be digital New Coke, but it's similar.
Bill Gates isn't hated because he's rich. He is hated because he is perceived as coercive. The company's positioning is seen as this: "The users will do it our way, or else." These days, "or else" is looking pretty good.
And then there are Apple's Vista TV ads. They must drive Gates nuts. Steve Ballmer, too. (If this video is representative, he doesn't have far to drive.)
The rules of business success are simple: serve the customer and keep your costs low. The first is more important than the second.
The senior people at Microsoft have refused to listen. Steve Jobs listens. He is rare. Software companies would be wise to imitate Apple rather than Microsoft.
Next, consider Evernote's version 3 (beta). I have recommended Evernote in the past. It's a note-taking and note-retrieval program. It's free. You can't beat the price (in money). But, as we shall see, the company has recently imposed unnecessary costs on the users. This will backfire soon enough.
The company makes money selling a pro version for the new tablet PCs, which let you take notes by hand. The professional version ($40) recognizes your handwriting. This is a very narrow market. The key to this marketing strategy is to get enough people using the freeware version to make money from the tiny minority who move to the pro version, especially users of tablet PCs.
The company has steadily upgraded the free program. It finally to version 2.2. Then it leaped to 3.0.
The problem is, 3.0 is a beta. The company warns against making the conversion in one fell swoop. It says this:
I have been using Evernote 2.2, should I switch to version 3.0 Beta? Yes, but maybe not in one-fell-swoop. Evernote 3.0 is currently Beta software, which means it will be constantly upgraded and made more feature-rich.
Hint: "more feature-rich" sounds like a code phrase for "less buggy." But it's a good warning.
This is all good. The problem is, they have gone out of their way to make it difficult for new users of version 2.2. They have basically chased away these people. They push the beta while making 2.2 almost invisible.
Example: All along the left-hand side of the Evernote Support page are helpful hints. The problem is, when you click these links, you get taken to a page on the Beta version.
The company gives the indications of being ready to kill version 2.2, the way Microsoft killed XP: prematurely. This is a huge mistake. They should let the users download a tried-and-true version. They should make it clear that the new users of 2.2 will receive support: a good starter manual (their present Quick Start manual is a disaster), screencast videos, and FAQs. The PDF manual should have live links to screencasts.
The goal is to get the user using the product. Yet rare is the company that beta-tests its manuals. They don't bring in new people who are unfamiliar with the product and have them go through the Quick Start manual. No one stands behind the new user taking notes on problem areas. Why not? Because programmers are interested in code, not people. They expect new users intuitively to understand a program the programmers have spent 10 hours a day, six days a week, for a year designing.
They should hire a manual writer who doesn't understand the program and assign a programmer to do nothing except tell him how to make the program work, step by step. If he can't make this clear, then the program must be re-designed. But programmers resent outside interference this and will fight it.
When the marketing strategy is to give away a free version, the hint of a steep learning curve kills the marketing campaign. Everything should be done to teach the new user three procedures that he can use immediately. There are no orders for advanced versions if the "lite" versions are heavy.
In any case, a lot of people will not be able to use version 3 anyway. To use it, you must first register. To register, you must get by the spam-blocking system. Let me show you some examples of this spam-blocking system.
They have let paranoia about spam interfere with their entire marketing plan. My suggestion: this marketing plan isn't well-designed.
Upgrading is good. Beta versions are good. What is not good is to push users into downloading a version they are not ready to trust.
Upgrading is the great temptation for software programmers. They make money with upgrades. But they also put existing users at risk: bugs. This is why corporations rarely buy a new Windows operating version until after the first patch/fix is issued. They know better.
Evernote redesigned its home page. As with 99% of web pages, the programmer forgot that there are color blind people out there. The bottom of the page has a dark background and dark print. I can't read it.
These are the page locations where lawyers tell site operators to put links to Terms of Use and Privacy Policy. The Federal Trade Commission sues sites that don't include this information. If the site conceals this information from an entire class of people, the FTC reserves the right to sue.
Note to site designers: black print on a white background has worked for books. Don't get clever.
The standard response is this: "You're the first person to complain." That is, the user is the weirdo. The program is great. The point is, who cares enough about the program to warn the company? If the user can't get it to work within five minutes, he's gone. Tough luck for the programmer. "But my program is so great. The user must just stick with it for a few hours." Sorry, Charlie. You've got a marketing model that isn't going to work. You're going to starve.
Evernote isn't like that, but it needed to hire new users off the street to beta-test its manuals and add screencasts before it released the program on-line for users to beta-test. As it is now, potential new users will leave the site (no visible 2.2 support), while existing users will stick with 2.2; it's safer that way. Even those who upgrade probably won't buy the pro version unless the site stresses the benefits of tablet PCs. It barely mentions tablet PCs. In short, the marketing is confused.
They have ignored the #1 rule of marketing: the marketing plan's primary goal must be to increase sales. The site reflects an astounding lack of concern with sales. When I tried to find even a hint of information about the pro version, I could not find it. I have never seen anything like this. It boggles a direct-response marketer's imagination. I have heard of low-pressure marketing, but this is ridiculous.
Everything associated with a free program should be geared to addicting the users to the free version, so that the advanced features will seem worth the money. Until users are totally committed to the free version, they won't buy the pro version. This is so simple. Yet I have seen very few software companies that adopt the strategy of "use a free version as a hook for sales of a pro version" devote anything like sufficient financial resources for pre-release beta-testing, which is necessary to produce effective training materials. These materials are crucial to get at least 20% of the downloaders totally committed to the program. The companies expect the new users to climb the learning curve. Life is too short. Users have better things to do.
First, any software program that doesn't have a screencast to illustrate every major division in the user's manual is missing the boat. This is so obvious. Yet almost none of the companies see this. That's why a site like ScreecastCentral exists. Second, each screencast should promote the benefit that the particular operation allows the user to achieve. It's not about the neat way the program works. It's about the unique benefits the program can bring to the user. The screencasts should be produced by actual users, not in-house technicians. The user wants to know three things: that the program will do something, why this will benefit him, and how to get the program to do it . . . in this order.
Evernote tried to save money on in-house beta-testing, especially beta-testing of its user's manual. "Let's get our existing users to find the program's flaws!" Not a good plan, especially when the new user's materials for 2.2 are simply terrible and need a major overhaul. It's an even worse plan when 95% of the company's site is converted into a "beta-test this for us, guys, so that we can save on developmental costs" promotional. In one move, the company turns away new users of 2.2 and gives old users no good reason to sweat blood with the beta version.
In your own business, you must innovate. But you must not jump the gun. Don't force existing clients to switch until they are comfortable. Retain support for the older product lines until nobody wants them any more, and are not willing to pay for service.