Nothing is cleaner and more behaviorally pure online than a transaction.
I’ve been zeroing in on the where and why of transactions as key to figuring out models, market opportunities and customer acquisition channels.
Perhaps it’s part of my recent quest for the measureable and actionable, letting the purity of transactional models just suck me in like comfort food. Perhaps the antidote to too much social backslapping and an overdose of vanity metrics.
Possibly it’s also a reaction against free as a model.
Not that Freemium doesn’t work, just that, by definition, it is a ‘go big or go home’ model. It takes so so much free to create anything of monetary value that it’s perhaps more aspirational than it is feasible in today’s market.
Creating value from connecting behaviors and aggregating people at a Facebook, Twitter or even Linked In level is, perhaps, yesterday’s dream. But these monoliths have an Achilles Heel–they are commerceless. Devoid of transactions. It may not hurt them with media as their financial model but it opens a huge doorway for the rest of us.
That’s where the opportunity lies.
As community and commerce designers, as consumers ourselves, transactions are the bright shiny thing in the grass. People on the web don’t only want free and it’s not true that we’ve spoiled them away from reaching for their wallets. People pay for value, though very rarely for the promise of it.
Transactions are a reality sandwich for marketers.
Grasping onto data as truth in the form of market dynamics, traffic patterns, unique visitors and influence matrices gets level set quickly when you focus on where in the value chain the transaction happens. Where is the customer’s role in sharing it, and the company’s role in brokering and owning it.
That is why I love the community marketplace model.
Marketplaces live between search and SEO on one side, social on the other. They leverage the ubiquity of Google and Facebook to supercharge their models. Marketplaces thrive where products need to be sold (think Etsy and Kickstarter) rather than bought as commodities, like at Amazon. They connect buyers and sellers using the entire web as their personal social network.
A perfect model actually.
My bias for commerce design at the earliest stage is making the transaction a value add to the process, not just a gateway that let’s you slide down a chute towards a ka-ching at the end. Even with the understanding that everything may indeed change.
Transactional-based models are anything but simple, but they are clearer.
They are clearer because you have tangible metric for success. Clearer because shopping and deciding to ‘buy it’ is a pure and basic human behavior. And clearer because shopping is not an abstract ecommerce activity, but a core social behavior.
You may need volume in your business to be solvent, but you don’t need volume in order to have something to sell.
Transactional models are as varied and many as the types of people who use them– with every possible permutation. There’s no one formula, just customer behaviors and exceptions to the rules.
In abstract, the farther you are from the transaction itself, the less sticky the model, the less substantial the play in the long term. And owning the transaction itself feels naturally correct.
I don’t think this holds true in every circumstance though. Reality is more random.
Some businesses broker connections and work well, even though referrals are a tenuous commodity to platform. Businesses that broker sales leads I think are in serious trouble even though some are tied into the transaction.
Coupons, abstract and old school as they are, are a great business despite being simply a lead gen tool that becomes valueable only at the time of transaction. And the dream of retail brands of embedding transactions in catalog items sent everywhere over the web as both social and financial objects that breaks down completely the idea of ‘where’ the transaction happens at all.
I work with client’s models that need millions of users before value has an outline. Where the transactional exchange is clear from day one, but where there is no value till the customers are acquired. And models where platforms let other businesses touch their own customers in a new way, and the transaction is an embedded subscription itself.
Take a at the model of your business and rethink it with the transaction as not the end of the chute toward dollars, but at the center that you can build to.
This post is a nudge towards rethinking value as tied to payment, both within and without communities on the web. To see whether the transactions are a natural part of the experience that bubble up and feel good to ask for, or an afterthought that just never quite fits.
