Looking at "Freemium" business models

I'm looking forward to participating in the Garage Technology Ventures' "Revenue Bootcamp" on July 10th, discussing, amongst other things, freemium business models, digital goods, and affiliate programs.

What is Freemium?
A business model where a company combines both free and paid services. The free can be:

1. A feature-limited version of the site, with a feature-rich version available for upgrade
2. A "try before you buy" version of a product, with a required time-period to buy the product
3. A customer-type limited version of a product, where certain customers qualify for a free version, and others must pay
4. A seat-limited version of a product, where a certain number get the product for free and over that number, payment is required
   

Examples in the real world:

1. Feature limited, versus premium: Photobucket, Flickr, LinkedIn, YouSendIt and many, many others.
2. Trial version: Quicken.com, Audible.com, Rhapsody.com, Pandora.com
3. Customer-type limited: BizSpark from Microsoft
4. Seat-limited: SocialText free for up to 50 users
   

I’m going to focus here on the first type of freemium. That’s the one I’m most familiar with, and the model adopted at Photobucket.

In my experience at Photobucket, having a free offering, and a super-simple, quick registration process, allowed the company to welcome tens of thousands of new users every day, day-after-day. This large registered user powered a terrific network effect. The free offering at Photobucket is subsidized by advertising and print services.

When does freemium work?
A freemium business model can work when the following conditions are true:

• You have a free service that offers enough real value that you build a large, active user base of free users that you can market to
• You have a good balance between free and paid features. (As Josh Kopelman of First Round Capital says “Too many freemium models have too much free and not enough mium.” So watch out for this!
  
• The price point you choose for paid features match the willingness your target premium user segment are willing to pay (see “What to charge for premium” below).
• You practice good marketing techniques at every decision point to convert free users to paid users -- it’s like a friendly “bait and switch.” Hook them for free but work hard to ‘sell up’ to paid.
  

Some advantages of a freemium model:

• There’s a reduced risk for the buy – it’s free! Users will try it because it’s easy to commit.
• Free has shown to be a great way to get lots of customers in the door! Photobucket has over 80 million registered users for their freemium service – that’s a big base to market to!
• The free service becomes a fantastic test-bed for new features and building a better product – early on, users have a high-tolerance for bugs if they know it’s free. However, conversely, when a free product becomes mature (certainly in the case of Photobucket) high standards are expected by users. At Photobucket, we used a totally different site – www.tinypic.com -- as a feature test-bed site. Photobucket had become so mature that our users didn’t want to be experimented upon too much. So we tried things out on Tinypic, and, if they worked there, moved the code to Photobucket.
  

Evaluating freemium: Revenue
It’s mandatory to clearly calculated advertising revenue to your free base, to your other sources of revenue. Some calculations to make:

• Active user rate, or the percentage of your registered user base active in a month.
• ARPU (Average Revenue Per User). To get your average monthly net revenue per free and paid subscriber, divide your net revenue in that period by the average number of subscribers in that period.
• Churn, or how many users you are losing in a period. To get your churn rate, divide the number of subscription terminations by the total subscribers at the beginning of the period. For example, if you get 10,000 subscribers on January 1st, with 100 terminating in that month, your churn is 1%.
• Your advertising revenue/user, compared to premium. For example: Your site has $1.00 CPM. That's $0.001 revenue for each user's visit. Say a user visits an average of 4 times/month (or 48 times/year). That's $0.048 in revenue/user/year from advertising.
  

Once you have these numbers, look at your active user rate as a percentage of your overall users Then estimate upgrading 1-2% of your active users to premium as a start, and model the result.

Evaluating Freemium: cost
Do you have a break-even, or close to break-even model for your free users? In other words, is your advertising revenue pretty much offsetting the costs of offering your free service to your users? You have to know this. It’s healthy when you are pretty much keeping your marginal costs close to zero (costs are offset by advertising) because then you can really focus on your premium services as your money-maker.

If your marginal costs are significantly above zero (it costs more to offer the free service than is offset by advertising), then you have to look at your free service as one big marketing funnel to drive people into the premium service. In this scenario, you may look at free service more as a cost of acquisition, and a cheaper cost than other methods. This can also be healthy, but it’s critical that you focus major efforts on pushing people up to premium.

Expected conversion rates
Historically, people have considered getting 1% of your installed base to upgrade has been healthy. But many companies are seeing much higher percentages of upgrade. Longtail.com reports these interesting numbers:

• Club Penguin: 25% monthly uniques pay, $5/mo per paying user
• Habbo: 10% monthly players pay, $10.30/mo per paying user
• Runescape: 16.6% monthly uniques pay, $5/mo per paying user
• Puzzle Pirates: 22% monthly players pay, $7.95/mo per paying user
• Flickr: 5-10% monthly users pay, $29.95/year
• Ning: 3% of its 500,000 social network creators pay for premium
• Xing: 8% of its 748M user base upgrades to premium services (see Xing profile below)
• Shareware: typically less than 0.5% of users pay
  

Encouraging upgrade to premium

• Don't make the "free" version too rich
• Survey your most active users, and find out the features they find most valuable on the site
• Get in front of users and talk to them! Any way you can. In person. Via Twitter. On profiles. Ask them what they'd pay for.
• Be up front, and explain why some things are charged for. Most users understand that free can't include everything. You'll lose some users who will never, ever pay. But you'll endear yourselves to those users who are willing to cough up a buck or two if they understand why.
  
• At every decision point -- even at first registration, educate on the fact that there's an upgraded, premium service and what's in that service
  
• Testing, adjust, test again to find out the messaging that is working -- do your users want to be identified as a premium user to the world, do they just want the feature, or both? Keep iterating.
  
• In lists of features and functions, try 'greying out' the features that are unavailable to free users -- they see the feature, but they can't 'get at them' without upgrading
• Make sure users know when they've reached their limits, or are close to reaching limits; at Photobucket, if bandwidth is exceeded, then all images posted on other sites are replaced by a "bandwidth exceeded; upgrade now" message. Harsh, but effective.
  

What to charge for premium?
Here are some simple ways to start the decision-making process:

• Review your competitors, as well as products in adjacent spaces; compare pricing models
• Consider opportunities for more than one tier of offering; can you do three-level price point? That may be complex enough for a start: free, medium, and high-end. Give yourself the flexibility to move features around as you measure your user behavior and feedback
• If you already have free users, conduct a survey of those users. Pricing surveys can set you back tens of thousands of dollars -- hard to swallow for a small startup -- or even a large one. Take a look at some of the templates available through Mineful, or SurveyMonkey and try them out.
  

Bloodhound tracking … sniff out every metric that makes sense
The article here “The metrics we track and report: example for freemium products” by BuzzGain is a good place to look at the kind of metrics you should consider tracking. This should become a monthly published dashboard of its own. (See post in this blog “What’s on your dashboard?”)

Profile: YouSendIt
YouSendIt has been successfully marketing with a Freemium model since 2006, and claims 100,000 paid subscriber. In this interesting case study of their freemium model provided by Andrew Chen, they provide the following advice:

• Adopt the freemium model wholesale and focus on it success. Don't just consider your model a free service with an 'optional' premium offering. Devote your energies to pushing users up the funnel.
• Users may call you a 'sell out' if they're never prepared to pay. Users who are willing to pay will likely encourage similar users -- a healthy thing.
• Measure everything you can! See metrics section in this post.
• Work on your pricing model. See what to charge section in this pot.
• Look for lots of 1% conversion lifts. They're easier to find than 10% conversion lifts!
  

Profile: Xing
Xing is a European competitor to LinkedIn, and a public company. So we can look at their reported results. In Q1 2009, they reported revenues of 10.8M EUROS, with their number of Premium users counted as 8% of their user base of 7.48M users (600K premium users).
They have the following revenue streams: upgraded premium accounts, Xing job services, and advertising. While their advertising revenues suffered the same decline almost everyone is feeling, other revenues grew for the company. Job seeking is big business in a down economy!

Profile: LinkedIn
As they are not (yet!) publicly traded, it’s harder to get validated figures about LinkedIn, though a number of articles put their revenue at a profitable $100M, with revenue approximately equally divided between their three revenue streams: upgraded premium accounts, hiring services, and advertising.

You can see how they compare features for free on their site. They clearly focus on making sure connecting is unlimited (thus growing the user base), but if you want to really lean on the email and messaging features, you have to pay for it.

Profile: Socialtext
SocialText, now free for up to 50 users. Press release: (June 23 2009). Their new free offering aimed at mainstream user for up to 50 people in an organization to collaborate using Socialtext’s social software platform.

Turning Generosity into Profits

Reading "Favor Enhancement: Real gratitude can be profitable. How, then, to create it?" in the New York Times magazine. In this article, the author Rob Walker highlights a new program by Hyatt Hotels whereby staff members 'randomly' perform acts of generosity towards their customers. Hyatt may pick up your bar tab. Or your massage bill. Or maybe your super-expensive, but much needed late night Snickers bar.

The idea behind this marketing campaign is that customers who feel you have been unusually generous will become loyal, repeat customers.

I have had this experience personally. A un-asked for act of generosity by British Airways made me a lifelong customer. I was in a terrible car wreck on my honeymoon in Italy (not a brilliant start to married life). After a wobbly few days in Venice, I called BA sobbing "I want to go home now!" They not only changed our flights for no fee, they also upgraded us to first class, and the airline staff were unusually gracious. I was hooked as a customer, and have been ever since.

Robert Palmatier, an associate professor of marketing at the University of Washington and author of a coming paper in the Journal of Marketing tells us that making a customer feel truly grateful directly correlates to opening their wallets. For me, I've spent thousands and thousands of dollars on flights with BA in the 16 years since my honeymoon, flying my family of five back and forth between San Francisco and London.

In what ways can you make your customers feel grateful?

• Do you know their birthday? Send them a virtual gift, a coupon or even a card.
• Do you see a customer with a problem on their blog, or on Twitter? Answer. Respond. Fix it. Give them their money back. Without being asked.
• Do you ship goods to your customers? Include a little freebie or two. I buy product from a Yon-Ka retailer who always includes goodie samples; I go back time and again to the same retailer so I can get those teeny-tiny free goodies that are perfect for two-day business trips.
  

Could Hyatt's program backfire? What if someone hears about the program, and their bar tab isn't picked up? Will they feel that's unfair? I think not. I would like to think doing the right thing, being generous, and taking care of your customer on a personal level will generate goodwill and good word-of-mouth of the best kind.

Update on July 24, 2009: OMG, I'm loving this story about Triscuits: "How to create a culture of buzz" by John Jantsch. What's your equivalent of sending Triscuits to Fiji? That's what I'm talking about! In the "old days" such acts of generosity wouldn't have gone far beyond Suva. But today, your generosity could be talked about anywhere in the world.

What social media sites should you take a look at?

Just reading "50 Social Sites That Every Business Needs a Presence On." Just in case there's any doubt that you really need full-time staff -- even if you are small -- to manage your social presence, this article should convince you that yes, it is a very full-time job. This article offers a great check-list of places to check out. But you don't need them all initially. Pick the big ones, measure and understand, and then keep adding. And wherever you can, use aggregators like PixelPipe to help update multiple sites simultaneously.

How one crazy guy becomes a movement

Oh heavens, how I love this. A perfect example how one crazy out-there dude becomes a movement. The video is the perfect embodiment of how trends take off! See this post from Seth Godin.

Postscript April 2010: Check out this video at TED about how this same video is used as an example of how one guy starts a movement.

How much cooler could Flip get?

I have to admit it. I'm biased. Not just because my life-so-far-partner Peter Winer is the lead engineer on the new Flip Channels product. But because I think the Flip video camera is just the perfect juxtaposition of cool and functional. It's like the iPod of video cameras. (I'm presuming they wouldn't mind me saying that.)

This past winter, I took my Flip camera up to Kirkwood, and managed to take great ski videos without taking off my ski gloves. That's enough for me! It fit in my ski pants pocket and turned on in a couple of seconds.

Well done on the release of Flip Channels, Pure Digital! How cool is that!

Marketing your business with your blog

Most sensible advice from Darren Rowse "13 Tips for Marketing Your Business With Your Blog." Easy, simple, obvious advice. But if it were really obvious, more companies would do it. So I guess it's not that obvious. Thanks, Darren.

Do you know who your real friends are?

Reading the New York Times' piece "What Do Friends Mean."

Quote: "Today’s idea: The rise of social media and the downturn in the economy have people thinking long and hard about the value and meaning of friends — psychologically, socially and economically. Upshot: confusion."

I am pleased that I can categorize my friends on Facebook, and that I can hide people who are purportedly my friends and those who, frankly, are not. They litter up my newsfeed with blather and froth and nonsense. But I do occasionally want to stalk them.

Both my teenage children have had experiences where they have built friendships from passing acquaintances in "real" life, to closer friendships in "online" life. And then when they come to connect with those friends in real life it all goes completely pear-shaped.

It's what bingly-bongly parents call a "teaching moment." (Ick.) But it is vitally worthwhile to talk and think about. Don't mistake or confuse relationships in your social graph for those real, real friends in real, real life. There is simply no substitute for the nuanced choreography of a conversation. The facial and hand expressions. The voice inflection. The choice of words you use ... in sentences very frequently in my case (as I am often teased about) of way more than 140 characters.

On the other hand, having social network "relationships" with my work colleagues has opened up new avenues of connection that would otherwise have been impossible. Many of the people I work with are hundreds of miles away. I see them only rarely. But I connect with them daily on Facebook. I see their families, their hobbies, their frustrations. That I like. It's human.

But my real, real friends, in real, real life? I almost never talk to them online. They are strictly for face-to-face secrets and gossip. And that's never going online for me.

What's on your dashboard?

One of the most useful things marketers can do is help colleagues measure the activity and behavior of our users. To that end, two monthly dashboards are recommended: a financial dashboard and a marketing activities dashboard. Both should be put out as close to the beginning of the month as possible, measuring the previous month.

Apart from all the usual, expected measurement metrics about logins, activity, upgrades, and so forth, it's very interesting to also try to combine social conversation metrics in combination with more traditional metrics.

For example, if a new feature announcement announcement includes blog posts, email blasts, and press releases, try counting the Twitter mentions, influencer blog mentions and Facebook posts right alongside the click through rates on email and ad campaigns. Also measure the increase in numbers of followers, friends, and blog comments.

In addition, one should obviously try to cross reference those measurements against the increase in the number of people actually using the newly announced feature. This all helps to provide a more insightful picture of the success of that feature release, as well as how it is being received in the user community.

A note of caution though: all this requires a lot of work, and a dedicated, experienced resource. Don't under-estimate the amount of time needed to measure a 'hit' on any of these networks. Your results may not hold up perfectly well under close scrutiny -- there's always a bit of a fudge factor in how things are measured. But they are worthwhile nonetheless, and as measurements on these platforms improve, your actionable insights will improve too.

Social conversations -- the shock of the new

I have learned more from being the official Photobucket tweeter (http://twitter.com/photobucket) in the past few months, then over two years of watching customer service reports, following Yahoo Answers, searching blogs for our brand and more. The immediacy of reply, and the "stalker appeal" of just searching for my brand's name is captivating and not just a little bit addictive.

But when I come to report back to colleagues and management the results of what I've found in listening to the Internet pulse, I find it very hard to quantify the data I found. Where's the formality in my approach to collecting, analyzing and reporting on what I hear? What can I judge it against?

The Dizzying Speed of Social Conversations
The volumes of customer conversation is so huge, and so fast, it can be a bewildering task to uncover the trends and commonalities in customer sentiment. Some are easy to spot and shoot up over night -- look at the Motrin debacle. But some are much harder because the come and go, or might not be spotted immediately. Plus, marketers have to combine and analyze those more subtle responses and trends in social conversations and measure them against the data they are collecting from site visits, site behaviors, transactional data and other sources into a meaningful analysis that can be relied upon.

The Shock of the New
When I was a history student in 1980, I studied Robert Hughes "The Shock of the New" -- a series and book that changed the way people think about modern art, its relationship to speed and change in modern society, and the worship of anything that's "new" for the sake of being new.

Sound familiar? I feel parallels to that story today as a marketer in a social media world, with all kinds of shiny new tools and widgets at my disposal every day. Will these shiny new toys hold up to the cruel light of history? Will they be considered worthy and important 6 months, a year, or even 5 years from now?

One of the problems I see is that the new social media marketing platforms are so new that there are few touchstones we can use to judge the quality of the results we see. If I see 5 tweets a day on the same topic about a brand and 10 posts on Facebook a month on the same topic, is that a lot, or not? I need to compare it over at least a year. And I need to be able to measure it as I go along. Do I count them up as I go?!

As I said. Bewildering.

But not hopeless. The tools will catch up. The benchmarks will form as social networking matures and brands build some historical data online. New job roles are already forming, with expertise in the measurement of social conversations and brand tracking. It cannot be ignored, or sub-contracted off to an agency. The best marketing groups will have this expertise in-house, and their results should be watched, respected and acted upon.

Which brands get it right (and wrong) when trying to reach youth

Here are some interesting live insights taken from a panel of 8 teenagers at the YPulse Conference, watching advertisements and giving their feedback live. The teenagers were diverse in ethnicity and interests, and came from different parts of America.

Refresh Everything by Pepsi
The ad shows a variety of scenes from different ages, drinking pepsi, to the tune of "Talkin' 'Bout My Generation." It links to the site www.refresheverything.com. It uses a development of the Pepsi logo that recalls the Obama campaign logo.
Watch it here.

Responses:

• Seen it before; the tune is old news; nothing that's going to make them drink a pepsi.
• I feel catered to, don't do that.
• Pepsi isn't being consistent with their logo usage.
  
• Portrays youth as party people, and they're more than that. Add some social activism in there.
• Pepsi should come up with something that's theirs; not just take Obama's logo and re-use it. You're not going to get youth by borrowing Obama's logo. Be unique.
• Berlin Wall coming down, and flower power people didn't resonate with this panel.
• This looked like a re-hash of older commercials, like Britney's old Superbowl advertisement.
• One panel member liked the invitation to be a part of the new story.

Happiness Factory by Coke
Shows the journey of a coke bottle through an imaginary world that looks very Pixar-like.
Watch it here.

Responses:

• Looks like Pixar made a tool video. They aren't trying to be relevant. They're trying to be fun. They aren't trying as hard as Pepsi.
• Creepy and disturbing. A little to acid trippy.
• Fun, but would like to watch the commercial again. He found the Pepsi commercial more realistic, but he would watch this commercial again.
• Feels it's like a depressing version of Willy Wonka and the Chocolate Factory.
• The gamer panel member didn't understand the gaming aspect of the commercial.

Overall the group felt Pepsi won, but neither ad appeared to make the panel want to drink either Coke or Pepsi.

Mac Versus PC Advertisement by Apple
Showing the team the ad about customer care and the Apple versus the PC guys.
Watch it here.

Responses:

• Loves ad series, but not sure the message holds true. Doesn't think the Genius Bar is any help at all.
  
• It's not diverse ... two white guys doesn't appeal.
• Hates this campaign altogether, and feels that this is really bad for Apple.
  
• Doesn't like that the young Mac guy is too cocky, and is pandering to youth.
• Thinks the ads is funny, but doesn't like playing on someone's weaknesses rather than their own strengths.
• Generally all very "down" on the ad series.
  

I'm a PC by Microsoft
Many different people, using PCs in different ways, all over the world, with the phrase "I'm a PC."
Watch it here.

Responses:

• Loved the diversity. Not making fun of Apple.
• Felt it was mature of Microsoft to do this.
• Didn't feel the commercial affected them. Didn't know what the ad was about, unless you knew about the Apple ad. Didn't give any special information about why to get a Windows PC.
• Thought they got it. They took pride in taking a PC.
• Connected more to lower income individuals, because they are a diverse range of individuals. A PC is for everyone, and liked that.

Candie's, for Teen Pregnancy Foundation (PSA)
Shows two teenagers making out in a car. They're told to stop and think. They're handed a baby by Jenny McCarthy through the window and told "welcome to reality."
Watch it here. (Click on Jenny McCarthy ad.)

• Felt it was just talking to girls, and not to boys.
  
• Didn't talk to boys as participating in the decision making.
• The baby came way too fast. This isn't realistic.
  
• Uses a celebrity in the ad, and they didn't notice who it was.

Above the Influence, Partnership for a Drug Free America
Shows a teen schoolboy fitting or not fitting into cardboard cutouts.
Watch it here. (See "Fitting in" ad.)

• Really liked it, because it was human tetris, but didn't think it was effective
• Does not have any impact about drugs
• Had no message at all; just walls falling down; they're always hearing about not smoking pot; but there was no message here.
• Showed fun imagery, but totally irrelevant -- there was no message about smoking pot here. You're labeling people, and not helping.
• It's not always about teenagers fitting in. There's more to it than that.
• Not an effective anti-drug message to talk about 'fitting in' only.
• Doesn't feel the message connects, but there are other abovetheinfluence.com messages that are better ... for example, the talking dog is much more effective. (See "Dog" ad.) They should address risk levels.

What struck me in particular about these teens is that they are very sophisticated about how they are being sold to, they see what brands are trying to do, and are frequently derisively dismissive of the messaging. Don't talk down to teens. They know what you are doing! Be honest, authentic and real and these teens will believe you more.

Corporate responsibility affects teen purchasing decisions

Things are changing for teens with regard to purchasing decisions. Teens have lost the abundance of discretionary income. Teens are going to be smarter shoppers, and they are going to really question how much they need the item. New versus used? Upgrades and updates?

Teens might love a particular brand, but there are other associations that help decision making. For example, corporate responsibility and social cause awareness are added into consideration mix. Corporate malfeasance is an issue. Teens will know if a company is not behaving ethically with regard to their products and workforce.

This information courtesy of Jacqui Lane at SurveyU. I worked with Jacqui when she was at C&R Research. Lots of energy, and lots of enthusiasm for her subject.

An immersive marketing program for Partnership for a Drug-Free America

How do you get teens involved when you want to show them something they don't want to hear about, and aren't really interested in?

This was Premise Immersive Marketing's issue when working with a Partnership for a Drug-Free America. The Partnership works hard on research-based educational programs, and their focus has historically been on parent education. They have now launched a youth program, including programs such as Time to Talk.org.

Teens weight two attitudes towards drug use: the perception of risk, weighed against social approval. If there's a high risk, and high disapproval, use goes down.

The Partnership needed a youth marketing program designed by an organization that really understood youth, including youth that never used, used occasionally, and used frequently.

Youth don't respond to being preached, especially by adults. Peer-to-peer communication is ideal. It's the #1 source of trusted information. It's important to understand different learning styles too: auditory, visual, by reading and writing, and kinesthetic.

The program devised by Premise Immersive Marketing involved:

• 10 min video that appeals to visual learners; created in partnership with A&E and interviews real teens with real stories
  
• Card game appeals to kinesthetic learner; the goal is to facilitate a conversation in a group; four outcomes of the game: checked, wrecked, checked your friends, and intervention. The winner is the last player standing. So for example the group is asked if they'd take a pain killer prescribed for someone else. The answer is discussed.
  
• Group discussion for people that read/write to learn using the online resource. The Check Yourself web site allows the teens to follow up and get advice, for themselves and for their friends.

The results:

• Gets people involved, in engaging and talking
• Authentic and relevant to their lives
• It's easy for an adult facilitator to use

The Web site is: http://www.checkyourself.org.

Is your perception about what works for teens accurate?

Study by Fuse Marketing's Bill Carter: "Teen Advertising Study" May 2009.

Teens were asked these questions. The percentage represents the number of teens who confirm that belief:

1. TV is the best way to reach them -- 75% agree
2. "Friended" a brand on a social network -- 30% agree
3. Think in-game ads work and are effective -- 10% agree
   
4. Approve of text messaging by brands -- 10% agree
5. Think magazine ads are effective way to reach them -- 50% agree
   
6. Think use of celebrities/athletes is an appealing way to reach them -- 20% agree

Sometimes your belief about brands can be inaccurate when you actually talk to what teenagers are saying.

The last question about celebrities is interesting.

Teens want to see ads that include "people that look like me." They don't want to see celebrities and athletes. The Verizon "can you hear me now?" guy has been a very effective ad since 2002. That character, and those commercials, ranks as the #1 most effective ad that teens say works for them in the mobile category. (My thought: maybe the celebrity distracts from the message? Do you look at beautiful Catherine Zeta-Jones, or think about the message of the ad she features? She is mightily distractingly beautiful.)

Bill believes that the teens think the use of celebrities maybe too excessive. Maybe they think they are too cool for that. More study needs to be done as to why celebrities in ads apparently turn off the teens.

Please, please, BBC and Google.... make it so

Read this on the Telegraph today: BBC and Google in talks to launch international iPlayer site.

Please say it's so. The BBC has the best content ever, and we could all benefit from it. Once again, the BBC leads the way. They were one of the first, serious, grown-up news organizations to adopt RSS. They really do get it.

See my post in March "I want my BBC." Do you think they're listening?!

Josh Shipp, Advice Slinger, HeyJosh.com at #ypulse2009 Conference

Here's a summary of his talk.

1. Teenagers do not give a crap about your brand
They're not thinking about you, your next product, your next app, your next innovation. You have to make yourself distinguishable and authentic. This gives you the right to be heard. Josh says to his teenage audiences: "if your life sucks, it's because you suck."

2. What matters to teens:

• Dating
• Parents
• Friends
• Identify

3. Be as skeptical as a 15-year old.
What do I buy into? What is corny? Use that mind as a filter. The best products for the teenager were made by older people, but shaped by skeptical 15-year olds. You need to have a skeptical 15-year old on your payroll? If you don't, you should. Do you have the right to talk to me? What irritates this audience is that they tell you how to make your product better, and you do nothing about it.

4. Be realistic
Try something. You may fail. It'll suck and it'll cost you time and money. But you'll learn and be better.

5. What do teens care about?
They care about your story. They connect, relate and trust a story. They don't trust companies. They trust stories and individuals. They like the Jonas Brothers, but not Columbia Music. They care about their iPod, but not Apple, Inc. Does your brand have a story? And is it worth re-telling? Does it have a story that I'd put in my Facebook status? Does your product make me look funny, stupid, smarter, more beautiful? Because if it does, your audience will tell your story for you. Your audience will market for you.

6. What if your brand isn't interesting?
Even if you think your brand isn't interesting or dynamic, or you believe it isn't, you can be successful. You need to build a story that people can relate to. You need to see your problems as an opportunity. Your biggest problem may be your greatest asset.

7. When your audience is engaged with you, they are listening
So perhaps they are laughing at you. But they are listening too. What will you say? You should add value to your audience's lives. If you don't add value to your audience, you should not exist. Your audience should trust you, and they will if you add value. Help teenagers with their aspirations and dreams.

8. Some knowledge biscuits:

1. Free stuff rules
2. My email address is dead. Have a plan for mobile phones.
3. When all else fails, don't underestimate the power of girls and free cookies

http://www.heyjosh.com/ypulse. This site includes a free book that you can download.