Here’s a classic product management question for you: how well do you know your customers? I mean, do you know then REALLY well? We all like to say that we know what our customers are looking for, but do we? The product managers over at the online gaming company Zynga (you know, the one that went from nothing to $600M in revenue overnight) can say that they do know their customers very well. They’ve got the analytics to prove it.
Fishville: A Case Study In Product Management Analytics
So product manager, how will you come up with your next product? If you are like most of us, you’ll study the market, try to guess what your customers will be willing to buy, create a product and then roll it out and hope for the best.
Over at Zynga, they’ve got a different approach and their game “Fishville” does a good job of showing how this all works. Zynga starts with an idea – we think that some people might like a game about fish. They have their developers quickly throw together a fish-based game and then they quickly launch it.
Guess what – some parts of the game work, and some parts don’t. In the case of Fishville, Nick Wingfield reports that the Zynga product managers noticed that while playing the game people were using the game’s virtual currency to purchase a particular type of pretty translucent anglerfish 6x as often as any other type of fish.
Those clever Zynga product managers then had their designers whip up more fish that looked like the pretty anglerfish and offered them to game players for real money: $3 – $4 each. People snapped them up.
What’s amazing about all of this is that Zynga’s products are in a constant state of flux. Zynga product managers spend their time combing through mountains of data as they search for ways to tinker with their products in order to make them appeal to more people and to get them to play longer once they “get them”.
Just to make sure that you understand what’s going on here, there’s one important fact that Wingfield uncovered: 95% of the people who play Zynga games never spend a cent. It’s that other 5% that buys the pretty fish for real money that has allowed Zynga to rake in over $600M last year.
How Zynga Has Worked Analytics Into Their Product Development Process
The game products that Zynga makes are not like games made by other companies. In fact, they’re really pretty lousy games. Lots of people have commented that Zynga games are made up of simple graphics and require little skill to play. However, the Zynga product managers point out that they are developing products that will appeal to the largest possible customer base.
In all honesty, they seem to have accomplished this goal pretty well. The secret to Zynga’s product manager’s success has been their extensive use of analytics in order to understand what their customers really want.
Zynga is always performing “A-B” tests in which some of their customers see one configuration of the product (with blue fish) and others see a different configuration (with red fish). Depending on which experiment produces the results that Zynga is looking for, the game is changed and the next round of experiments starts.
Analytics data has revealed some interesting insights. It turns out that game players are more willing to buy things that have a limited availability such as holiday themed tractors in their hit “Farmville” game. It’s Zynga’s ability to mine its customer data and extract such hidden gems that has allowed its products to grow into the monster hits that they have become.
What All Of This Means For You
No matter how you feel about that Facebook thing, I think that we can all agree that Zynga has ridden Facebook’s success and has become a phenomena in its own right. The question that product managers everywhere need to be asking themselves is “how did they do it?”
Yes, there was some luck and some “right place / right time” involved in Zynga’s success. But the real secret lies in how effectively they’ve gone about using the mass of customer data that their games collect. They realize that they really can’s design the perfect game – and they don’t try to do this. Instead, they believe that they can tweak any game that they make and by using customer analytics they can turn any product into a winner.
The rest of us really need to learn a lesson here. Living in the 21st Century has provided every product manager with access to an almost unlimited amount of data storage and processing capacity. We need to start to use the resources and customer data that is available to us in order to finally, really understand our customers.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that you need to notify your customers that you will be collecting all of this data on them?
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What We’ll Be Talking About Next Time
As product managers we all dream of the day that we could muster up the courage to actually raise the price of our product. Just imagine – we wouldn’t have to do any additional work, and we’d be able to bring in even more money! Apparently the product managers over at Netflix had the same idea because they decided to dramatically raise their prices. That’s when bad things happened…