Knowledge Is Power—And Why You Should Share It: Insights from Negotiations and Pinterest's Retention Strategies

Knowledge Is Power—And Why You Should Share It: Insights from Negotiations and Pinterest's Retention Strategies

We’ve all heard the saying that "knowledge is power," often to the point where it seems like a cliche. But this phrase holds true, especially in the business world. Many people are reluctant to share their knowledge with others, fearing that it may give their competitors an advantage. However, research from McKinsey & Company shows that sharing knowledge can actually lead to greater success. Intensive users of analytics and data programs were found to be 23 times more likely to gain more customers, 19 times more likely to achieve above-average profitability, and 6.5 times more likely to retain customers.

One concept that sheds light on why parties in a negotiation may be hesitant to share knowledge is BATNA, or best alternative to a negotiated agreement. BATNA serves as a guardrail, indicating when it may be best to walk away from a potential deal. However, in today’s business environment, trust and transparency are crucial for lasting relationships. Sharing your BATNA can establish a foundation of trust and transparency in the negotiating process. When both parties share information, it fosters greater creativity and collaboration in structuring a deal that benefits everyone in the long-term. Sharing knowledge creates trust and can help find more creative solutions that adversarial tactics might make impossible.

Moving beyond negotiations, let's take a look at Pinterest's approach to retention. Pinterest is a unique platform that CEO Ben Silbermann describes as "more of a personal tool than a social one." Users are on Pinterest to connect with things to do and buy, rather than to connect with others. From a business perspective, Pinterest's revenue model aligns with its product engagement, making it a rare case where the two don't conflict. To measure engagement, Pinterest looks at the "Save" metric, which signals when users have found something they are interested in. This metric provides valuable insights into growth and the quality of content on the platform.

Casey Winters, an expert in growth strategy, highlights the importance of finding metrics that align with a company's mission. For mission-oriented companies like Pinterest, the goal is to fulfill their mission, and metrics should reflect that. For business-oriented companies focused on revenue, metrics should align with long-term profitability. Determining the right retention strategy involves measuring actions within a natural time period. In the early stages of a startup, targeting the normal frequency of a specific behavior is essential. Over time, increasing that frequency can lead to even greater success.

Winters emphasizes the importance of conducting experiments to drive growth. However, many teams get stuck in a rut by only testing one variable at a time. Sometimes, more divergent experiments are necessary to break free from local maxima and discover bigger wins. Winters shares an example of a small experiment that had a significant impact on Pinterest's conversion rate. By replacing the default action of scrolling with a banner encouraging users to sign up for more content, the conversion rate increased by 50%. This simple change set the company on a new trajectory.

Learning from failed experiments is equally valuable. Winters discovered that sending emails with relevant content, matching why people joined Pinterest in the first place, increased activation rates. On the other hand, emails focused on teaching users more about how the service worked led to more unsubscribes than app downloads. This insight helped the team understand what truly mattered in increasing activation and retention.

In the case of Grubhub, Winters and his team faced the challenge of increasing frequency among users who were already ordering from certain restaurants outside of the platform. They created a game where users had a chance to win free food after every third order. This game not only broke even but also significantly increased order frequency. By understanding the reasons behind user behavior and providing incentives, Pinterest was able to change habits and drive growth.

Pinterest also learned valuable lessons from SEO experiments. By questioning traditional best practices and understanding the algorithm, they were able to optimize their platform for search engines. This approach involved building products that catered to both users and search engines, maximizing the potential of each channel.

In conclusion, knowledge is indeed power, and sharing it can lead to greater success in business. Building trust and transparency through sharing knowledge in negotiations can foster collaboration and creative solutions. Pinterest's retention strategies teach us the importance of aligning metrics with the company's mission and conducting experiments to drive growth. By questioning traditional practices and understanding the algorithms, companies can optimize their platforms for success. Here are three actionable pieces of advice:

1. Share knowledge in negotiations: Foster trust and transparency by sharing your BATNA and learning about the other party's desires and needs.
2. Measure the right retention metrics: Align metrics with your company's mission and measure actions within a natural time period.
3. Conduct diverse experiments: Don't be afraid to test new experiences and question industry best practices. The biggest wins often come from a series of small experiments.

By following these three pieces of advice, businesses can harness the power of knowledge and achieve long-term success.