What’s The Value of Convenience?
A discussion in the comments section of my recent software project update raised the question of convenience. Dennis Edell says that fees should not be too high just for convenience sake. Specifically we were talking about Shoemoney’s IM tools for which he charges $99 a month but I think the subject is interesting and warrants further discussion.
What is Convenience Anyway?
Convenience can mean many things. Generally it saves us time and hassle. Personally I hate hassle, I hate wasting time and I love convenience and I am prepared to hand over my cash for it. There are many examples in the offline world. Internet banking – how convenient is that? I can log in anytime and get my accounts, I can pay myself from my business account online. I never go to a bank – ever, and I like that! Internet Banking just happens to be free but if it wasn’t, I’d pay for it!
When it comes to things like Internet tools, take the example of something like Market Samurai. This is a keyword research tool that taps into the API of Google packages it in a way that is easy to use and quick but it doesn’t really do very much that you can’t do yourself manually by using Google’s tools directly. I bought it for the sheer convenience.
Who Can Afford Convenience?
Paying for convenience is a choice. For example, let’s say you want to learn about making money online. You might want to get into blogging or affiliate marketing, writing ebooks or whatever. We all know that there are thousands of blogs and other resources out there with oodles of information that can give you everything you need to know completely free. The downside? You have to sort through the rubbish to get to the good stuff and that’s inconvenient. That is why marketers like myself charge you to teach you these things in a more concise way. You can choose to go the free route or pay for the convenience of learning what you want from a trusted source.
This choice is partly determined by cirmunstance but also by mindset. There are some people who value money more than anything else. If they can get something free or do something themselves they will. I am not one of those people. Can I wash my own car? Sure! Do I? Hell no! I pay somebody else to wash it for me! These people are what I have referred to before as ‘freebie seekers’ and they are not your customers and neither will they ever will be. They choose not to buy not because they can’t afford to but because they prefer to use only freebies. There is nothing wrong with this – it is simply a personal choice.
There are some people who are obviously restricted by financial circumstances and this is affecting more and more people in today’s financial climate. If somebody is literally scraping by and can barely afford to feed their children, they are not going to pay for convenience – at least not right now. But that might change later on if their financial circumstances change.
Lastly there are people who have money and are prepared to spend it for convenience – people like me :-) These people are your customers and you can charge these people! I pay $67 for Unique Article Wizard. Does it do anything I can’t do myself? Well yeah it kinda does but that’s not why I pay for it – I pay for it because it’s simple and saves me a ton of time.
Who is Your Target Market?
If you are in a position where you have a product that you want to charge for and you are considering the value of the convenience that your product offers, then you need to consider who your target market it. Let’s take the Internet Marketing niche as an example as that’s a real easy one. Okay, forget the freebie seekers to begin with and let’s concentrate on those that have the right mindset.
I would suggest that if you have a product that somebody wants, his chances of paying for convenience will be largely determined by how much money he is already making. If you have a business where you are making thousands of dollars a month and you see a tool or suite of tools that you know can save you a ton of time, $99 a month really is nothing. It’s a solid investment because that marketer knows that the time saved by those tools or products can be invested back into the business to make more money.
On the other hand if you have somebody who is only making a few hundred dollars a month or even less – this person is still at the hobby stage. It might be that the extra convenience won’t help them as much because they are not yet able to translate that convenience and time into additional profits. People who are still struggling to make money will be more reluctant to pay.
How do the big guys in the IM world make money? Who are they targeting? Most of the big guys target other successful marketers and the reason is that they know these guys have both the money and the mindset to pay for convenience.
Now how does that translate into other markets where you are not selling a ‘make money’ type product? I think the same principle applies – you have to find what it is that makes your product convenient or saves time and then market that. I’d love to hear your opinions on this topic so please leave your thoughts in the comments and thanks to Dennis for the post inspiration!
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Oh it’s on now! There will be a cross post… ;)
Actually, I’m all for paying for convenience, I do it all the time; and even charging for it, but haven’t gotten to that yet. lol
It’s the immense dollar signs in the eyes of the slightly less then ethical (hidden continuity anyone?).
And no, we can all save the nasty replies and emails as I am not calling the shoe-man unethical; it was just the 1st example that popped into my head…..I’m surely not the first to think $100 per month for his selection of tools is a bit over the top. :)
Dennis Edells last blog post..Who Wants To Sponsor May’s Comment Contest!
Hi Caroline,
as you say what people will pay for convenience, depends on who they are and what their time, and frustration (let’s not forget frustration) is worth to them.
But I think these days it is rare to just offer convenience.
What often seems to happen is more like a “mash up” (in software widget terms), where taking several conveniences (sources) and putting them in 1 place, creates something actually new and unique and not just a convenience any more.
For example, you could sumamrise CNN news for people on the go, perhaps making it a mobile phone summary. Some busy people would even pay for that. But take 10 industry news sources as well, and suddenly you have something bigger than CNN and offering more value.
But to be honest I think it goes beynd mash up of sources. I think you pay for personality and take. (ie in above example adding your private eye satorical editorial view)
I mean I could get a list of wordpress plug-ins from anywhere. Even word press. But knowing what ones you were using, would be more significant, because I presume you use them in a particular way, that is not apparent even from the horses mouth.
So it is not just a convenience. It is not just a mashup. It is your take, even your very selection from the noise, which adds value.
What that vlaue is worth becomes more complicated, because it depends how much of my attention you deserve.
For just a list of wordpress plugins, probably no more than £1 per year :-)
But if I also can come to you for say membership type tips and blogging tips, then I may join “you” for £1 per month. 12 x the value.
I’m only picing £1 as an example. Obviously people are easily charging $27 per month, (even $97 month for nothing but occassional over the shoudler IM groupies).
Where there is some hope the clients can earn more than what they are paying, from using what they learn as a member, it’s no longer a convenience, or an expense, but part of their own infrastructure.
Nea huh?
Peter
Hi Caroline,
I would love to pay for Shoe’s tools but I don’t have the time, but I want to make the time badly. But I also feel like I’d be too beginner-ish for his stuff. I know it would take a lot of time and a person would want to commit time if you were paying that much a month.
Paying for convenience is a must once you can afford to and put your time in to benefit from it.
I’ve been trading options since 1999 and at one point was paying $500.00 a month for research for a bit over a year. Researching companies sucked and took a lot of time. Once I found a good options-specific research company that also had targeted options trading recommendations it was well worth it.
So yes, if people have the money and time to put in and the drive to make it work, I definitely say paying for convenience in a lot fields is worth it.
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@Dennis, you’ve raised another point there – the matter of price. That’s something else I could ramble on about for some time – I might have to write another post about that :-)
@Peter, hey long time no speak! Yes I totally agree on the mashup thing – it’s a form of integration and we’re seeing that everywhere. These days there’s so much to do, so many tools, so much information that we do need more ways to digest all that more easily. And yeah paying for a ‘person’ is something else that adds value but thats a whole ‘nother subject!
@Bill, so you want to buy Shoe’s tools but don’t have time… hmm that doesn’t make sense. Surely his tools would save you time?? Or do you mean that you think it would take time to learn how to make use of them?
There’s a few things going on here but I’m not sure the root of it is convenience.
People buy things because of the job they need them to do. Most of your examples are about saving you time (Market Samurai) or giving you the freedom to do things when or where you want (internet banking), or to do more interesting things (instead of washing your car or standing in line at the bank).
This implies that the only people who might buy something are those who have a job they need to do. (Let’s not get into the psychology of need.)
Assuming there is a need, who will buy? Not the freebie hunters, forget them. The market is amongst those people who value fulfilling their need more highly than keeping cash in their pocket.
Will they buy? Maybe. Having to “sort through the rubbish” online sometimes means sorting through the rubbish we’ve paid for, which is why I think you nailed it when you said people will pay for “a trusted source.”
In other words, we buy things we trust will do the job, when the value outweighs the price.
Big IM guys, like the big guys in any field, make more money than most in two ways. First, just being a market leader will put you on most buyers’ short list (because none of us want to look stupid by buying something bad, we go for safety in numbers – “10,000 other users can’t be wrong”) and second, because they often charge a premium (which they can get away with because they’re on everybody’s shortlist, which is sometimes a shortlist of one if someone is looking for the easiest choice).
I’d argue that convenience only really enters the frame when it comes to choosing who (like the guy I already trust) or where (like the corner shop I’m walking past anyway) to buy.
Most importantly though – I think trust is hugh.
Am I mad?
I think you have hit the nail on the head Caroline. Paying for convenience is definitely a matter of the money you make and therefore most new people (or people that makes very little money) will not want to pay for it.
But another important part is the mindset. I think that a lot of people don’t yet have the mindset of actually envisioning what it can bring them? If you told them that they could pay $100 a month and in return you would promise them that they would be making $1,000 in return then everyone would do it.
This is often the result id you actually use what you buy but…. most people don’t ;)
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@Nick, I think the word ‘convenience’ could be used as an umbrella term for all of those things you described. And yes I agree that the trust factor can also be very important.
@Mikael, well that could come down partly to trust but also to the skills of the purchaser. Taking Shoe’s PPC tools as an example – if I paid $99 a month for them I’d just lose $99 a month because I’m no good at PPC but in the hands of a PPC expert they could make lots of money presumably.
@Caroline, that is true. I was thinking of tools that were actually teaching people how to do stuff (which means that they don’t have to be experts). I don’t know Shoe’s product so I can speak of how it is.
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It’s like I learned in my economics class, as long as the convenience you are paying for, is something that you would be better off with, and you don’t lose but actually gain with it, then yes its worth paying for it. It’s that sample principle, that makes countries import and export goods.
I meant it would take time to learn the tools. There’s so much to learn, experiment and try.
Then I compare what I hear about Shoe’s tools and wonder how close they are to Market Samurai. However, Shoe’s forums sound pretty cool.
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@Mikael, I think of teaching and tools as two very different things. Yaro has just released his membership site mastermind and I have noticed that the emphasis is on creating membership sites that teach something. Whereas I think of tools as being actual computer tools like a calculator that you use to do a job. In the IM niche there are loads of tools – keyword research tools, PPC tools, submission tools, and so on.
@Bill, Market Samurai is great but it only covers a fraction of Shoe’s tools – he has a massive suite of tools especially for those doing PPC which MS doesn’t touch on yet. And yes I see what you mean, there’s always going to be a learning curve but that’s where the tool developer needs to ensure they create good quality training materials.
pay for the convenience is good as long that is helping you to learn something new or to increase your skills, knowleged, etc… But really gets a wrong side when you are paying for convenience just for get out of bad situation, and in that case in my point of view you are not using the convenience you are using the corruption thats is two different thing that people always whant to mix just for convenience.
Reminds me of my site analysis. Many try to improve their sites by making random tweaks on their site with no real reasoning other than they think it’s good. They dig around online looking for free ways to improve their site, and the results often make little difference. They went for a convenient/free fix, and the ROI was about the same.
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Seriously “web design SEO” – don’t you feel that spamming a blog can become too obvious? If I were Caroline I would ban your IP.
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