Tuesday, March 30, 2010

The Rise of the "Fanmium" Products

Social media has led to a wealth of new ways of thinking about business. One of the most interesting, and most discussed, is the ceding of control of the market message to our audiences. While we as marketers may want to get out there and promote the value of our products and services, the most effective way by far is to have our audience do it for us.

This leads to an interesting paradox. We as marketing teams have energy and resources that we want to devote to making noise about our products and services, there is no longer an easy path to spending those resources in order to get the desired results. Covert tactics to pay people to write nice things about you are usually discovered quickly and backfire badly.

The "Fanmium" Strategy

However, there is one technique that I think is interesting and has merit; the “fanmium” strategy. This is a twist on the “freemium” product strategy, but involves giving away licenses of your product (or an equivalent) to those who provide coverage. Coverage could be anything from blog posts, becoming a fan on Facebook, or joining an online community.

I have seen this strategy being used from time to time, but most recently came across this strategy being used by a company called Cerebrata, which offers a product called Cloud Storage Studio. In various discussions on Windows Azure forums, I had seen mentions of the use of Cloud Storage Studio, probably coming across references to it 6 or 7 times. Finally, I had a problem that I had seen them mentioned as providing a solution to, and I downloaded a free trial.

What caught my eye though, was the way they structured their licensing:

- A trial version, feature complete, time limited (30 days)
- A development version, feature limited
- A professional version ($49,99)
- And most interestingly, a “Fanmium” offering

To be more precise, here is what they say:

(full disclosure, I bought a full license to Cloud Storage Studio, and am doing this post only because I found the “Fanmium” concept very interesting).

In looking back on what had caused me to find Cloud Storage Studio in the first place, all of the reviews and mentions were very accurate, and none had been overstated. The product is an excellent product, and well worth the price tag (it saved me about 5 hours of work the first time I used it), and without that the strategy would not work.

The key to this strategy, I believe, is looking for honest exposure, rather than trying to buy favorable reviews. Cerebrata is very clear on their desire for honest reviews. They are, luckily, able to achieve favorable reviews on the merits of the product alone.

Looked at from all perspectives, this appears to be a very good strategy:

o $49.99 for each bit of exposure is a very reasonable price to pay
o Investing in product, rather than advertising, makes this strategy viable

o Providing an honest opinion on a product in exchange for a free license is a good deal
o $49.99 of value is not enough of an economic motivator to risk alienating the audience you have grown by providing an inaccurate review or false praise

o Finding the uses for Cloud Storage Studio in context of discussions of the problems they solve was much more helpful than high level advertising
o Free trial version allows independent assessment of product quality, regardless of reviews

What are your thoughts? Have you considered a “fanmium” offering? What do you think the constraints are on when it would/wouldn’t work in a B2B environment?
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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trish bertuzzi said...

I think it is brilliant.. it is really back to the good old days of bartering isn't it? You provide me with this service and I will give you this product. Kind of like bartering carpentry for fresh eggs or something...that is the upside.

The downside comes in two potential formats. First, what if the product gets bad reviews? Nothing is worse than something for free that still doesn't work. Even one bad review could spoil the bunch.

Second, and this is from the consumer side, is a review really a review if it doesn't compare multiple products? Also, with all the new laws regarding online disclosure, the reviewers have to legally disclose that they received the sw for free. Does that taint the pool?

Interesting concept to keep an eye on. Looking forward to hearing what other think!

Steven Woods said...

Thanks Trish - good questions. It was interesting that in my experience with this particular company, it was really the "awareness" rather than the "review" that was of value. ie, I saw reference to their solution in order to achieve A, B, and C solutions, which led me to download the free trial.

My own experience verified that A, B, and C were true/good, but I might never have heard of Cerebrata if it wasn't for the awareness that they had generated.

trish bertuzzi said...

Hmmmm....but they are asking for a review "your reviews will help us most" so don't the two downsides stand as potential threats?

Also, I get the need to create awareness (and no one is better than Eloqua at that so congrats!) but awareness means nothing unless it converts to revenue. Which leads me to my next question...do reviews lead to revenue?

Just thinking out loud...interesting topic!

Steven Woods said...

great points for sure. I think the downside is there. If the product is bad, the reviews will be bad, and the strategy will definitely backfire. I think this approach only works if the product is very good and useful. If so, there's an opportunity to invest resources in "fanmium" licenses, rather than outbound promotion.

It's interesting that there IS a disconnect between what they explicitly ask for "your reviews will help us most" and what ACTUALLY gets written. I never came across any "reviews" per se, just posts on solving particular problems, with a "I used Cloud Storage Studio to do X and Y." That was all I needed in order to think that it would be worth looking at.

Gaurav Mantri said...

Hi Steven,

Thanks a lot for writing about our company and product. It's much appreciated.

Let me pitch in about how this approach has helped us in improving our product. We knew from the get go that even though we had a good product it was not the best product and in order for us to be the best product, we have to solicit honest feedback. We got both good and negative (I would stay away from word "bad") reviews about Cloud Storage Studio and what we found that people are pretty honest about giving feedback if they want to give one. I think in general people are willing to give you another chance if you acknowledge the problem and try to work towards it and that's what we did.

we took the bad reviews and tried to fix those. I guess the trick is not to be "defensive" but "open" about your shortcomings and acknowledging it. We contacted every reviewer/user who found shortcomings in our product and tried to address their concerns. So in essence, negative reviews should be thought of as more specifications for your product.

Even now we know that there are a number of things we need to do in our product and we try to get in touch with users of our products because those people are the best source for defining your products.

Here is one link where the vendor screwed up big time: http://ayende.com/Blog/archive/2009/02/02/open-letter-to-xheo-that-is-not-a-good-way.aspx. I had their item in my shopping cart on their website and then I tried to search for a coupon for their product and ended up on this link. Needless to say, I didn't buy the product.

I think I am digressing too much from this discussion so I will just shut up now :)


Gaurav Mantri
Cerebrata Software