When you’re in serious pain, what do you take? Probably an aspirin or ibuprofen.
When you’re trying to be healthy, what do you take? Probably a vitamin.
Now, which product do you think you crave more? The aspirin when you need it to alleviate an immediate and serious pain? Or a vitamin that may help ward off future illness?
Clearly, the aspirin is the winner.
Interestingly, according to a recent article in Fast Company entitled “Turning Vitamins Into Aspirin: Consumers and the Felt Need”, making sure that your product or service is more like an aspirin than a vitamin is crucial to your success.
In fact, the article cites one little tweak that Netflix made to turn its service from a vitamin into an aspirin. And how this little tweak was the #1 cause for its success (without it, Netflix probably would have failed).
What was this tweak? Well, initially, Netflix operated like every other movie rental company. You received the movie from Netflix, and if you didn’t return it on time, you had to pay late fees.
Sure, Netflix added some convenience by allowing customers to rent and return movies through their mailbox, and not have to go out of their way to their local video store. But, it turns out that the real customer pain was complete convenience, including not having to pay any late fees.
And when Netflix moved to its subscription model, which eliminated late fees, its sales started skyrocketing. In fact, it knew nearly immediately that it had a winner; in the first month after starting its subscription business, 80% of customers who signed up for a free Netflix trial became paying customers!
According to Fast Company, “Netflix as a DVD mailer was a vitamin. But Netflix as a late-fee vanquisher was an aspirin. It eliminated a pain.”
Importantly, if you are seeking venture capital, know that most venture capitalists also think in these terms. They look at your product and service and assess whether it is an aspirin or a vitamin. And if it’s a vitamin, chances are that they won’t fund it.
But even if you’re not seeking venture capital, you must figure out how to make your products and services aspirins. If your customers crave something, they will buy it. Consider cell phone carriers. Many cell phone carriers offer high prices and poor customer service. But since consumers now consider cell phones to be a necessity (or an aspirin) they continue to buy cell phones and service plans.
The key to creating a product or service that is an aspirin is your customers. And specifically figuring out what pain is your customer in with regards to your product or service. To gain this intelligence, speak to current and prospective customers. And watch them using your product to see how they interact with it (once great example here was Sony, which years ago gave its camcorders to a group of kids and observed them; it quickly noticed that the left-handed kids had a really hard time using them; as a result Sony invented the first camcorders with a swiveling holder that could be used by both lefties and righties).
The final note I’d like to make here is a point I make a lot. Which is this – rarely is your first idea your best idea. In Netflix’s case, its subscription model was NOT its first idea. Rather, the founder, Reed Hastings, simply TOOK ACTION on his initial idea. And by taking action and starting his company, he was able to solicit customer feedback and try new ideas to arrive at the ultimate solution.
If he had never taken action on his initial somewhat flawed idea (that people would rent movies via the mail simply because it was a little more convenient than renting from storefronts), it wouldn’t have achieved success. And more recently, Netflix has been growing it’s video on demand business. Once again, this wasn’t even a consideration when Hastings started the business, but a natural outgrowth of a going concern started by an entrepreneur who took action.