Tuesday, November 1, 2011

The Business Model of the Future

Making Billions Through Convincing Consumers To Invest Their Time

Column Quick Summary:
  • New Business Rule: Make consumers invest their time in your product.
  • When consumers invest time, even small amounts a day, they tend to remain.
  • With every product or service, ask how you can make consumers invest their time in your product.

Echo Boomers have complained multiple times about Facebook when the company changes things. When I attended Texas Tech University and Facebook was beginning to grow in popularity, Facebook added a new feature that involved instant updates. College students (especially at Texas Tech) screamed: this new feature was stalker friendly. A few closed their accounts, only to re-join Facebook a few days later. Even though Facebook has done this multiple times - creating features that annoy its users - most Echo Boomers, and others, still use Facebook. Why is it that Facebook continues to attract and hold its consumers even after it angers them?

Zuckerberg, whether he knows it or not, has created a new business rule that few businesses recognize. This business rule is simple: make consumers invest their time in your product. Most consumers won't leave Facebook and join other social networks simply because it took a massive amount of time to add friends, adjust their features, build personal albums, et cetera. In other words, there's a major emotional cost to leaving Facebook. Trust me, the more people invest emotional energy into Facebook, the less likely they are to leave (and, ironically, the more likely they are to continue investing emotional energy into Facebook).

Many businesses fail to consider this time-investment model. They make it easy and quick for consumers to get access to their product and thus the consumer feels disconnected to the purchase (in some instances, like necessities, this may be a good thing). Other companies bombard their consumers with advertisements, emails, calls, et cetera with the hope of keeping their customers interested in the latest gadget. Amazon, for instance, is a company that performs this well, yet Amazon hasn't considered that the people who review its books, for instance, are more likely to do business with them than the people who don't (time being invested).

Once you recognize what you're trying to sell, the question you should ask in today's world is, "How can I get customers continually invested with their time in this product [or service]?" As consumers spend more time with your products or services, you'll find that they tend to remain and help you bring larger profits.