Maximizing Product Usage and Sequencing Business Models for Success

Maximizing Product Usage and Sequencing Business Models for Success

Introduction:

In today's highly competitive market, it's crucial for businesses to not only attract new users but also retain them for long-term success. This can be achieved by triggering product usage that sticks and strategically sequencing business models. In this article, we will explore the common points between these two concepts and provide actionable advice to help businesses thrive.

Triggering Product Usage:

To motivate users to build a new habit, it's essential to understand that habits don't begin with action, but with a trigger to action. External triggers alone are not enough if users lack the internal motivation to engage with the product. Therefore, it's crucial to tap into intrinsic motivation and align it with external triggers. By doing so, businesses can create a spark that compels users to take action.

One effective way to trigger product usage is by incorporating daily reminders in the app's settings. When Calm, a meditation app, proactively prompted new users to set a daily reminder after completing their first meditation session, they witnessed a significant 3x increase in daily retention. This example highlights the importance of delivering value through the message itself and amping up anticipation to ensure users reach their "aha" moment.

Sequencing Business Models:

Understanding the different types of marketplaces and how they evolve over time is crucial for businesses aiming for sustained growth. There is no one dominant business model, and as companies grow, they are more likely to sequence to new or additional models.

When starting out with a SaaS-like business model, focusing on solving problems that are more important to customers than demand generation is key. Payments often play a significant role in this stage as businesses primarily solve payment-related challenges. As companies move towards the right of the business model spectrum, the sophistication of value propositions offered to suppliers increases.

A light marketplace typically offers leads or connections, leaving suppliers responsible for closing the transaction. As we move further to the right, leads are replaced by liquidity as the primary value proposition. Creating liquidity requires a focus on matching and ensuring that supply attracts demand. On the demand side, SaaS companies have no relationship with customers and, therefore, offer no value proposition. SaaS-like networks aim to make transactions with suppliers as efficient as possible.

Actionable Advice:

1. Understand and leverage intrinsic motivation: To trigger product usage, it's important to tap into users' internal motivation. Identify what drives your target audience and align your external triggers accordingly.

2. Incorporate daily reminders: Implement features that remind users to engage with your product regularly. By proactively prompting users to take action, you increase the chances of them forming a habit.

3. Sequence business models strategically: As your business grows, consider the evolution of your marketplace model. Evaluate the value propositions offered to suppliers and customers and make informed decisions on how to handle payments and build trust.

Conclusion:

Maximizing product usage and strategically sequencing business models are vital for long-term success. By understanding the importance of triggers, incorporating daily reminders, and aligning value propositions with business models, businesses can create a strong foundation for sustained growth. Remember, the success of your product relies on the success of your behavioral design, so invest time and effort in motivating users to interact with your product repeatedly.