I’ve spent my career in the B2B “corner” of the software industry, but I’ve always felt that there was much to learn from the seemingly far more popular and profitable B2C, gaming arena.  Measured by user count, revenue volume, customer loyalty, customer usage (in gaming it’s more like addiction) and just about any other metric, the software game suppliers certainly seem to be the “big brother” of the industry, (ok, maybe B2B wins in revenue per customer.)

And it hasn’t slowed down a bit, in fact, since moving to the cloud and the advent of the social game genre, it’s accelerated a thousand fold it seems.  Take Zynga that boasts 215 million (yes that’s million) monthly active users and 50 million daily active users, I’d say that’s quite a following.  For those of you not up on what one out of ten people on the Internet worldwide doing every month it’s playing one of Zynga’s 55 games like Farmville, Cityville, Cafe World, Mafia World or the newly announced Empires & Allies.  The company has raised over $200M from some of the top VC firms and is currently valued somewhere north of $10 billion now and who knows how much more if it makes it through a successful IPO.

So, back to my question, what is there to learn from this kind of company?  Mark Skaggs, Zynga’s SVP of Product spoke at the recent Game Developers Conference this last February in San Francisco about Zynga’s approach to product design and development as they’ve evolved over the years.  Several interesting “key learnings” jumped out at me from this talk.

First develop fast; while the typical game is developed in a two+ years by hundreds of developers, Zynga develops their games with small teams (typically less than 30) in a few weeks to a couple months.  

Second develop light; a variation on the Minimum Viable Product approach.  The point is get the game into the gamers hands to start learning how they use it as quickly as possible.  Then respond fast (hourly) with changes to the game to shape it by direct, customer usage.

This all leads to Zynga getting it right.  They cleverly use A/B testing with each new feature - some users getting the feature some not and then they monitor the play to see how well the feature performs.  High “click compulsion” and the feature makes it into general use.  Brilliant!

Of course, a critical enabler to all of this is, you guessed it, the software is in the cloud.  Pretty tough to do all of this in the traditional, on-premise software delivery model, where development cycles are typically long, user feedback is limited and feature bloat is common.  But not impossible, there are ways to monitor the customer’s software usage and experience with on-premise software.  User experience monitoring tools in near real-time gather actual usage data from customers using the software in “real life”, remotely.  Sage’s Peachtree development team has productively used just such a tool to improve their offering in their quest for a more user-centered design & development approach.

Software, B2B or B2C, has the capacity to achieve high levels of customer value and loyalty, but only if the company stays in close touch with the customer’s experience.  Seems obvious, but how many companies fail to learn and respond consistently and in a timely way.  Do you know what your customer's experience when using your software?  Social, online games are ALL about the user experience and the competition is fierce for customer attention with so many alternatives available and such low “switching costs”.  Quickly responding to customers with high value experience is the only way to keep them coming back for more.  

So on-premise or online, B2B or B2C; knowing the customers’ experiences and rapidly responding with timely improvements is one of the key paths to creating ongoing, superior, customer value.  The rapid response part of the equation - what I call value delivery - requires, potentially a whole new approach to software development.  Slow, waterfall-ish development practices don’t cut it.  But, that’s a topic for another day and blog post.  

As usual your comments and feedback are welcome!  

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    John Geffel

    Value is a much abused, misunderstood and misused word, everyone thinks they provide it but so few show real evidence that they do!

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