With the decline in dot-com fortunes and the “new economy” looking more like the “new recession” every day, it’s a good time to question some of the prevailing assumptions about the Internet. One by one, supposed new rules of the new economy — print is dead, brick-and-mortar stores are liabilities, profits don’t matter, technology (if not Alan Greenspan) rendered recessions obsolete, and so on — were exposed for what they were: sheer folly. Submitted for your approval: the addition of “stickiness” to the list.
A couple of years ago, stickiness rose in prominence as a Web experience school of thought. At its heart was the notion that the longer users linger on your site, the more profitable your site would become. Without supporting evidence of correlation, something about this concept seemed intuitive enough — leading to a rash of media coverage, new product releases, product marketing campaigns, new feature development, and acquisitions in the name of stickiness.
Many e-businesses that felt they lacked stickiness suddenly tried to build it into their sites — building out their online content, investing in online communities, and so on. Sites already considered sticky tried to make themselves even stickier.
Yet whether it comes to business models or assumptions about user experiences, the road to dot-com hell is paved with blind intuition. Entertainment and online communities, the proclaimed twin poster children of stickiness, have utterly failed as a financial strategy. Strategies to keep users on Web sites longer might actually be backfiring on many business models — turning off task-oriented users with a maze of choices and navigation options.
A Captive Audience?
The Cult of Stickiness is also alive and well in Europe. Greg recently encountered several Internet executives who used phrases such as “taking the user prisoner” and “trapping the user like a pinball” (in the bumpers). In the brick-and-mortar world, this strategy would be equivalent to locking the doors on your retail customers so they have no choice but to buy. It’s a nice strategy while they’re held hostage, but it really puts a damper on customer-retention rates once they eventually escape.
Stickiness achieved through direct attempts to control user behavior is often as annoying and misguided as the pop-up window purgatory of porn sites. An alternative approach is to lure flies with honey — namely freebies such as content and services. Depending on how lucrative your flies are, this can be even more detrimental to the health of your e-business.
In early 1999 Yahoo was on top of the world when its $4.5 billion purchase of GeoCities provided it with a premier free home-page service and a wealth of online communities. Today you could argue that GeoCities is something of an albatross around its neck. Yahoo cannot sell the untargeted, low-demand audiences for these services even at discount prices. And while these users are not being effectively monetized, Yahoo is footing the bill for the acquisition and the run rate required to support it.
Public libraries are a great place to gather and read books, but they all lose money.
If You Love Your Users, Set Them Free
Maybe, just maybe, there’s wisdom in enabling task-oriented consumers to get in, do their thing, and get out — and stickiness be damned. There’s even evidence of this strategy’s success in the brick-and-mortar retail world, where conventional wisdom says you should maximize circuitous routes through your retail floor space (thus maximizing customer exposure to merchandise) and hide all the exits.
Kohl’s, a U.S.-based chain of department stores, has achieved great success over the past year (leading in sales per square foot and doubling its stock price) while its peers have struggled. Analysts attribute a great deal of this success to the store layout, which efficiently shuttles shoppers through a racetrack design that assumes consumers spend less time browsing.
The online version of this value proposition? What you might lose in average time spent on your site may be more than made up by repeat visits and user loyalty — and thus perhaps revenue. This runs counter to the many sticky strategies today, and some of the talkaloti have already caught on to this idea and have given it a name: “slipperiness.”
Show Me the Operating Income
The moral of the story is to never confuse the means with the ends, whether sticky or slippery. Stickiness might seem like a good idea, but in the end all businesses are held accountable to their operating incomes. Stickiness for stickiness’ sake is worthless unless it is somehow tied to that principle.
Another lesson is that every business, and every customer base, is different. Even if a principle like stickiness works for one business model, it can backfire on another.
It’s been said that a business will improve only the things it measures. One of the great challenges for e-businesses, each drowning in available data, is choosing the right metrics. Choose the wrong metrics, or choose ones that do not directly translate to profits, and it can be worse than having no metrics at all. The only way to tell is to refine your choices and to continually measure them.