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You expend a lot of effort getting people to buy your product and they’re happy with it.
You then go back to your satisfied customers and tell them what they have is now mediocre, so they have to move onto your latest and greatest product version. You see this everywhere, from washing powders to family cars, so it must work for enterprise software, right? So why are your no-longer-happy customers now chasing you with pitchforks and burning torches?
One could argue that manufacturers of washing powders are an unfair comparison with enterprise software; their products’ purpose and benefit is far simpler to articulate. Pour this stuff in your washing machine, it will make your clothes clean. Job done.
It’s clearly not that simple. The market for domestic products is fiercely competitive, brand loyalty can be easily displaced and price cuts only erode already-slim profit margins. Take into account the need to attune the product messaging with the prevailing consumer mood – who in their right mind would be a product or brand manager for washing powder?! Yet they manage to get their customers to ‘upgrade’ to the latest version. What are they doing that you’re not?
Another example: let’s think about car manufacturers. Different product, different problems. Here there’s an even more compelling reason for customers to stay with their current ‘version’. Automobile build quality and reliability are excellent, admittedly both plus points for manufacturers; however, short of irreparable crash damage or total neglect, a car will keep going for far longer than car companies would like them to, meaning there has to be a good reason for the customer to trade in and upgrade.
So how do they do it?
A few observations:
1. There has to be something in it for the customer.
Is the upgrade primarily for your or the customers’ benefit? You might need to kill off an old and increasingly difficult-to-maintain codebase, or the old version of the product doesn’t serve as the foundation for the future product direction, or the old version isn’t branded right and Marketing are shouting at you to change it. Guess what? The customer couldn’t care less about your problems – get over it. If your so-called upgrade offers nothing to the customer, it’s pretty likely they won’t buy it, figuratively and literally speaking.
2. The benefits (not the features) of the new version must be compelling to your customers.
Remember that new functionality is not in itself an incentive to move; what are the benefits that the new feature brings to the customer and are they compelling enough? Note that we’re talking about benefits, not simply features. With washing powders, it could be the ability to clean at lower temperatures (saves energy, shortens the washing cycle, good for the environment), or the ability to wash more clothes with less detergent, thus implying that the customer will save money.
With car manufacturers, these benefits could be incremental (better safety features increases chance of survival in a crash) or a result of solving an entirely new customer problem (iPod dock or USB port for all that music we carry around these days).
3. Make the transition as easy as possible for the customer.
This is one of my all-time pet hates. Nothing stirs greater extremes of emotion than software upgrades. Get it right and I’ll love you even more. Get it wrong and I’ll seriously consider ditching your software even though I was perfectly happy with it yesterday.
As a bare minimum I want you to remember my settings (because I can’t), tell me what’s different and why (because I hate having to re-learn stuff I was already good at), oh and to UPGRADE WITHOUT CRASHING / FAILING / KILLING MY INSTALL. And relax. Do you have any customers like me? I bet you do.
4. Don’t ever claim your product is “crap”, even if it’s old.
Gerald Ratner wiped £500m in value from his jewellery business back in 1991 by describing a sherry decanter sold in his stores as “total crap”. Other businessmen have ‘done a Ratner’ since then with predictable results. Your customers won’t like being made to feel like idiots for believing your sales pitch when they bought your product first time around.
Both washing powder and car manufacturers clearly differentiate their newer version from the older ones without being disparaging. Learn from their example.
You might also want to take a look at the following article: Why they don’t upgrade (and what to do about it)
 Okay, even with enterprise software, you should be able to articulate your product’s purpose and benefit in a simple sentence, but that’s a discussion for another time.
 The obvious snag is that ‘most’ people (or maybe just stupid, stupid me) use the amount dictated by the size of their washing machine compartment, i.e. too much, or use exactly the same-sized measure as before, resulting in spending more than before. Natch.