Why The Products With The Worst UX Win The Market
It’s a myth that companies choose software based on user experience. Yet PMs are primarily focusing on the UX. So, what’s going on?
The Software Selection Process
This is how the typical software selection works:
- People become aware of the problem and the software category that might solve it
- They google the software category broadly (“best CRM tools”, for example)
- They browse several of the top results on Google
- They make a (mental or physical) note of the most reoccurring software solutions on those top Google pages (let’s say Salesforce, Hubspot, Pipedrive)
- They try out the cheaper ones first (let’s say Hubspot and Pipedrive)
- For testing, they just do a single test run of adding one contact, one sales deal etc.
- Everything else being more or less equal, they go for the one with a free plan (Hubspot)
Note that pricing plays a huge role in this. Essentially, users can be touched by several different growth loops (SEO, paid ads, software comparison websites, etc.). But pricing is always on the user’s mind (maybe with the exception of enterprise software).
(Recommendations by peers can override steps 2–3 but oftentimes peer recommendations are part of Google results in some way or the potential buyers will google anyway just to be sure.)
In this very common scenario, there are two mistakes. One is done by the users which leads to choosing the wrong product. And another one is done by the software providers which leads to losing business to competitors.
Users Don’t Test Out Actual Use Cases
Potential customers test out software only partially. Let’s take sales tools as an example.
Adding just one contact says nothing about how easy it is to add multiple contacts. Emailing one lead says nothing about how easy it is to email multiple leads. Adding just one sales deal says nothing about how easy it is to browse between multiple deals. But in reality, the latter is what users will be doing most of the time.
During this very limited test run, most problems related to workflows don’t come up (unless something is very wrong — but in that case, these apps wouldn’t likely be the top-recommended apps in the first place).
Similarly, when buying a chair, people sometimes just sit on it for 10 seconds. The chair might be nice and cushy but it says nothing about the back pain you’re going to experience later on because the chair is too soft and has no proper back support. Conference chairs are a prime example of that.
This situation is often made even worse. The testers (and buyers) are often not even the end-users. This is especially true in B2B software where you’re dealing with different roles and multiple people. Nor are the functions tested together in a meaningful way.
To continue with the furniture example, a usual problem with hotels is that the chair in the room is too high for the table and there’s no room where to put your legs. It’s because chairs and tables were bought separately and never tested out together.
Going back to the software — even when the problems turn up sometime later with extended use, it’s too late now. The data is already in the system. And the software has already been paid for (the bigger the company, the longer the contract).
Even if you have a short contract and can export the data, you can’t export the integrations or automations. Companies also don’t want to re-train their employees to use another tool.
Software Providers Think Superior UX Will Win
The second error is that of software providers. Many product people and designers think that superior UX will result in more customers. It’s part of the mantra that the best product wins the market.
In reality, all the users will start going through the user activation flow. But most users never reach even the a-ha moment, not to mention testing the software out with habitual use. So, they have no idea which product is functionally the best one.
Think Pricing/Distribution First, UX Second
What matters in a competitive market is matching the pricing options of competitors and putting a lot of focus on distribution (growth loops).
If there’s just one competitor out there, who has a freemium plan while others don’t, that company will get the majority of customers even when the UX is worse. The same goes for having a free trial and cheap plans.
(Recall that users usually shortlist the choices before making a choice about which ones to try out first. That choice comes mostly down to pricing in mature markets where solutions have similar features — on paper at least.)
If there’s a single competitor out there, who has an inferior product with superior distribution, that company will get the market.
Slack vs Microsoft teams is a grave warning to everyone who thinks the opposite:
Microsoft Teams overtook Slack overnight because it could be bundled together with other Microsoft software and basically given away for free. So, they had both an advantage in pricing and in distribution.
(Check out also the teardown of Microsoft Team’s user onboarding for more context and entertainment.)
Changing Pricing Gets More Difficult With Time
When a startup is small, it’s easy to test out pricing. Heck, no-one knows what they’re doing anyway and they usually admit it. So, pricing gets changed a lot. There isn’t much to lose either way.
As the company grows, it will get increasingly difficult to change pricing. You’ll have to get approval from most departments. The C-suite has to sign off on it as well. Although the possible upside is huge, the downside can be big as well. No-one wants to be the reason for a multi-million dollar mistake, so, pricing decisions get passed around like a hot potato.
So, for product managers, it’s easier to concentrate on the UX (features) than on pricing. UX is something they can control whereas pricing isn’t as straightforward. But pricing can have a way bigger impact for growth than feature changes.
There’s an especially huge difference in the traffic you’re going to get that comes from having a freemium vs just a cheap plan. Users will test out the cheapest solutions first (unless your software belongs to Veblen goods) and only then move to more expensive ones if their minimal user testing brings out some big problems. But most users don’t get to that point.
Conclusion
Your potential customers will shortlist software based on pricing first and UX second. The UX testing they’re doing ranges usually from minimal to none.
Pricing and distribution are interlinked. The price determines whether one solution gets more traffic (and therefore customers) than another one.
So, pay at least as much attention to pricing and distribution as to UX. A great UX will get your users to share their excitement, but it won’t stop anyone from discovering cheaper alternatives.
Check out more free startup advice along with the most popular mental models from Product Loops.
