All Posts in Economics

September 22, 2016Your thoughts?

Economics and Design

[Originally published under the title Benefits of Better Design/Hindu BusinessLine]

When User Acquisition Stops, Retention happens through ease and consistency of Experience. Click To Tweet

As economies of scale allow for higher quantities, prices reduce. As demand increases, prices increase. The equilibrium is a point where supply and demand curves intersect and an acceptance to sell at a certain price point emerges.

Price Setting for Attention and LoyaltyHowever, in reality, many companies are (and yearn to be) price-setters — targeting in on people who will pay more for products having superior qualities.

And what is the price we’re asking here?

Attention. And loyalty.

To retain users, you need reliability. Don’t have Asparagus in stock one day, fine. They’ll go get it from your competition. You’ll get screwed over if you don’t have it often.

What if you’re a marketplace? You clearly don’t have control over the behavior of the merchants and their inventories. You’ll build systems for quality control, and separate the wheat from the chaff. That’s basic hygiene, every one of your competitors will do that. Remember that you’re a medium, a channel, a means. Make it easy. Make it consistent. Make it the first choice. Make it indispensable, but not because of the goods your merchants carry. But because it feels and works like the most natural way to get to those goods. Predictable and a source for subconscious relief. You can’t go wrong with Mac and Cheese. That familiarity, that’s key. Busy office goers might not chow down chicken wings for lunch, but may get a Soylent shake and some granola bar instead. That’s functional. Convenient.

Look at whatever users have got today — they have a favorite grocery app, a soon-to-be-favorite e-commerce app, perhaps another get-a-helping-hand app. Sometimes they might have two of a kind on their devices because they want to fill the gap created by one with the another. But one of them is what they open first — that one clearly won the battle of retention, of attention and loyalty.

With better design, users will be willing to pay more. More attention. More loyalty.

Snappy, non-fussy, checkout. ■