I’d like to retell the highlights of Paul Libin‘s, CEO of Evernote, session “Love Can Pay the Bills” that I attended at South by Southwest. I’d also like to mention that I’m not getting paid by Evernote for this but you do need some background to understand where I’m going with this post.
Evernote is a place to “remember everything. Chances are, if you can see it or think of it, Evernote can help you remember it. Type a text note. Clip a web page. Snap a photo. Grab a screenshot. Evernote will keep it all safe.” You can also organize everything and find it easily later. AND, you can get all the basics for free, forever! Crazy. So how does a business like Evernote make several million $$$ a year?
*pause for gag reflex*
Evernote’s business thrives because the primary driver for their consumer is love. Their customers LOVE their product. They’ll even buy premium and upgraded versions even when they never use the extra features.
The reason that so many businesses fail is that they have products and services that decrease in value. Think of what you ate for breakfast. By now, you’re hungry again and the value of that food you bought is gone. You’ll never get it back. Think of the motel you stayed in last summer. The value of that bed in that town is gone. Car washes only last until the next rain. A beer only provides value while you’re drinking it and that plane you’re on loses all value when you get out of your seat.
So how should businesses counteract this? Create products and services that INCREASE in value over time. It’s not quite as easy as it sounds but that’s what Evernote does. The more information you store in Evernote, the more valuable the service becomes.
*pause for revelation*
How do you create fiercely loyal, devoted customers? Give them a service that they become more and more reliant on as time passes. Give them a service that changes them. Change the way that they interact, remember and store information.
NOW. Apply this concept to coworking. Isn’t that what we’ve done by creating a service around people and communities?! When you buy membership in a coworking community it doesn’t have much value on day one. New members need time to acclimate to the community. They need time to get to know everyone and to start collaborating on projects, learning, sharing and helping one another. It can be a slow process but every single day the community will become more valuable to them. With each passing moment of their membership, they’ll learn something new, teach someone something, make a new friend, find a connection, grow their business or solve a problem.
There’s a test to see if you’re creating value or diminishing it. Think about how valuable you are to your customers. I could probably pay a brand new member $20 to leave our community and never come back. When I asked 2 founding members how much their participation in the community is worth they each said that I’d have to pay them both $10,000 or more to walk away from the community and never look back or contact any of us ever again.
*pause for the tears I got when they said this*
Long story short: Evernote found the magic bullet for their business. They charge a nominal fee and get a customer for life. That’s the kind of business I want to be in! I’ll be sharing more from this presentation in the coming weeks. Watch for more each Wednesday morning.
What can you do in your business to create a product or service that increases in value over time?
Image credit: wetwebwork’s