Zillow fmr Product Lead on Low-Velocity Products (Part 2)
More than any other factor, the most interesting aspect of managing low-velocity products is taking on complex issues for users. In other words, these products may not be habit-forming or used daily. However, they make a huge impact on people’s lives when they are in use. For example, managing a new house purchase or planning a wedding represents an incredibly demanding (and often painful) process. As a result, product managers have an opportunity to create meaningful solutions on a unique stage.
That said, there are plenty of challenges that come with trying to solve these problems. First, the high-stakes nature of using your product leaves very little margin for error. Said differently, you need to get customers hooked right away on the value or solution that you’re providing. If you don’t, they’re quickly going to find another product or service that meets their demands.
Along these lines, acquisition costs are significantly higher for low-velocity products than habit-forming products. For example, an online tax service (H&R Block) or real estate platform (Zillow) is used at key points during a given year. With this, product managers need to get creative with retaining users. First, you need to get them excited about the initial experience. Then, you need to cultivate users in between their engagement (which can be several months or even years). As you can see, retention for low-velocity products is much different than products we use daily.
Most importantly, it’s very easy for customers to find alternatives to these solutions.
In other words, you may use H&R Block this April – but could very well move to TurboTax for any number of reasons. As a result, product managers need to constantly come up with ways to acquire new users. However, you need to also focus on people that you already have in your community. In my experience, the best way to ensure success for low-velocity products is to focus on retention as much as possible. Simply put, the long-term cost of retaining loyal customers is significantly lower than constantly re-upping with new customers.
In summary, the key for low-velocity products is to dial in your overall experience to make it impossible for users to think about going elsewhere. As I mentioned, this means that the margin for error is much lower for making sound decisions that lead to positive results. Ultimately, product managers face the same high-stakes decisions as the users that need to use their product or service. That said, it makes the whole process that much more interesting and fun to solve in coming up with a new approach to solving problems.