A little while back, Gmail, the webmail service to which all others must be compared, started offering email forwarding. Several people were a bit confused about this – a common cry was “hang on – how does this support their advertising business model?” After all, it stands to reason – if people aren’t viewing your pages, you aren’t making any money.
The answer, is that someone at Google reads Joel on Software (or, alternatively, they are as smart as he is and figured it out for themselves, which I suppose can’t be discounted ;-). Way back in 2000, he wrote Strategy Letter III: Let Me Go Back!, which is also reprinted in his book (which is where I read it). The first point of the letter is that to make people switch to your product, you need to eliminate barriers to entry. So far, so fairly obvious. However, near the bottom, he makes a far more interesting point, which is this: “you can get more customers by eliminating the barriers which prevent people switching away from your product”.
So how does that work? Rather than attempt to explain myself, I’ll quote. Amazingly, he even uses email as an example:
Let’s take a more current example: ISPs, a highly competitive market. Something that virtually no ISP offers is the ability to get your email forwarded to another email address after you quit their service. This is small-minded thinking of the worst sort, and I’m pretty surprised nobody has figured it out. If you’re a small ISP trying to get people to switch, they are going to be worrying about the biggest barrier: telling all their friends their new email address. So they won’t even want to try your service. If they do try it, they won’t tell their friends the new address for a while, just in case it doesn’t work out. Which means they won’t be getting much email at the new address, which means they won’t really be trying out the service and seeing how much better they like it. Lose-lose.
Now suppose one brave ISP would make the following promise: “Try us. If you don’t like us, we’ll keep your email address functioning, and we’ll forward your email for free to any other ISP. For life. Hop around from ISP to ISP as many times as you want, just let us know, and we’ll be your permanent forwarding service.”
Of course, the business managers would have fits. Why should we make it easy for customers to leave the service? That’s because they are short sighted. These are not your customers now. Try to lock them in before they become your customers, and you’ll just lock them out. But if you make an honest promise that it will be easy to back out of the service if they’re not happy, and suddenly you eliminate one more barrier to entry. And, as we learned, eliminating even a single barrier to entry can have a dramatic effect on conversions, and over time, when you knock down that last barrier to entry, people will start flooding in, and life will be good for a while. Until somebody does the same thing to you.
And that’s what Gmail is doing.