Wednesday, November 5, 2008

Nailing the Revenue Model:

Last week featured a web start up that failed in figuring out how to make money by offering there service. That's both sad and common. So to be positive this week, lets look at a company that seems to have nailed the money part of the start up game.

Months ago I wrote about Jott, a service that provides a platform which enabled users' to dictate message via there cell phones, have those messages transcribed to text and then delivered to them via email and SMS.

I became a beta tester around February. For me, Jott made good on it's promises and provided a valuable service that saved significant time and helped me prevent things from slipping through the cracks. Over a few weeks, I found I was averaging between five and seven Jotts a day, using it for both personal reminders and work 'to do's'. Essentially, using Jott provided much more than just easy and efficient reminders - it gave me piece of mind that I wouldn't miss anything important.

Make Money: Keep your Customers

Around late August to early September, Jott came out of Beta and continued to offer a free version of the platform supported by an ad network, but expanded to offer two additional tiers of service with full capabilities.

I'll admit, when the switch was made I was not a happy camper. As a beta tester, I had been use to the full platform of services including individual emails, the ability to set text and email reminders days out, and access to bolt on modules to link Jott with other applications. In the switch, I was bumped back to the bare bones and felt that I, as an early adopter, should have been "grandfathered in" on the full platform.

To Jott's defense, I did receive multiple emails informing me of the date of the switch and the options that would be available for me to purchase. Knowing my own personal inbox habits (which I would bet is similar to most of you) I do tend to get trigger happy with the delete button when cruising through email sent from services I subscribe too. I'm human, and very busy. While I'm sure folks at Jott were measuring open and click through rates on these emails, an additional push on social networks might have helped to increase awareness. Just my opinion though.

After receiving yet another email from the Jott team regarding the upgrade, I took a chance and emailed Doug Alley, Jott's VP of Business Development with my questions on why they chose the route they did, an some of my opinions on alternative strategies.

Jott Responds
Doug was quick to respond with a very professional email and a detailed explanation, siting some very important things to remember about monotozation:

  • Start ups need to keep there lights on so there services cant stay free forever.

  • People are willing to pay a reasonable fee for services that provide them with good value and consistent delivery on the promise.

  • Information Privacy is critical to fostering and keeping adoption high. Monotization from data mining can be a slap in the face to the end users.
I appreciated Doug's fast and professional response. I believe that a companies willingness to address feedback from their customers' speaks volume about their culture and brand. Doug didn't once apologize for the decisions he and his associates made - and that was OK. He stuck to his guns and went to great lengths to support his line thinking.

What Doug did do was respond to a customer who felt neglected and left behind. At a recent transportation marketing conference, I heard Ann Minor site that over 68% of customers leave because they feel like they are not receiving the attention they deserve, where as only 14% leave a provider because they are not satisfied with product or service itself.

The result is that because Doug made an effort to pay attention to my concerns, I upgraded my account and am again a happy customer. And additional features like Outlook plugins, an iPhone app, and Twitter links put the icing on the cake.

Moral of This Story
Monotization is not just about developing a pricing structure that works. To be truly successful in growing your revenue and keeping customers, companies need to engage with there customers, really listen, really communicate, and turn them into raving fans of there business.

Then the money will come.

Here's a great article by Read Write Web that Doug turned me on to. What I think is most interesting is the comments from the readers...

1 comment:

  1. A small correction in this article. The correct spelling of Doug's last name is "Aley". Thanks for the heads up on this!


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