What exactly is sticky software? What makes one software more sticky than another? And as a software consumer, what should you know about stickiness?
As the name implies, sticky software refers to any platform or solution that’s difficult to remove. Like a wad of Juicy Fruit in your hair, it’s tangled into so many parts of your business that to find a new solution would be too difficult or too costly to be reasonable. Whether you like it or not, you’re stuck with it.
Software providers and their investors, ever conscious of their sacred client churn rates, love being sticky. But as a consumer, you should be able to differentiate between a healthy relationship and the irretractable claws of a clinger. Here are some of the clues.
1. Long-Term Contracts
Probably the most obvious way a provider can become sticky is by locking buyers into long-term contracts.
By doing so, software providers buy themselves time to prove their value. They no longer need to prove their worth on every deliverable and interaction – they just have to convince you to renew by the end of your contract.
What to look out for: For complex and difficult solutions, the long-term contract commits you to struggle through the steep initial learning curve. They don’t need you to get value immediately. You may also notice a lot more attention from your account manager as the 12-month mark comes around.
2. The Initial Investment
The long-term contract also plays directly into another sticky concept: the idea of commitment and consistency. The concept, brought to light by Robert Cialdini, is well ingrained in influence psychology literature.
Essentially, we all innately want to honor our commitments and remain consistent in our choices. If we invest $36,000 and three months of employee training in establishing a software solution, we are more likely to then believe the sacrifice was worth it.
To justify the painful adjustment and learning period, we stick with the software we chose. After all, we can’t just give it up after all the time and money we’ve put into can we? And can we really now imagine undergoing that adjustment period all over again with a new solution?
All of the sudden we believe these solutions are always going to be complex and costly to implement. The prospect of jumping ship becomes unthinkable.
What to look out for: when there’s an intensive onboarding process, training programs, or upfront setup cost, you should know you’re not paying for immediate value but rather for long-term setup or commitment. Third-party review sites will usually indicate what the onboarding process looks like.
3. Historical Data and Learning
Software that uses clients’ historical data become stickier as that historical data become referenceable or the software uses it to improve its services. But hoarding data is also a way companies can deter competitors and limit your options.
Imagine transitioning all of your CRM data from Salesforce to HubSpot, NetSuite, or Oracle. Or recall transitioning your entire iTunes library and playlists over to Spotify. Migrating that data can sometimes be difficult or time consuming and can inhibit your ability to make a transition.
In a similar vein, the likes of Google, Google Maps, or Facebook’s News Feed learn from your past searches to get better at knowing what you want (or at least what you’ll click on). Once you’ve witnessed the benefits of a machine that’s trained on your data, it becomes more difficult to consider leaving it to retrain a new provider.
Storing historical data and learning from it is generally good for consumers. But if there’s anything to learn from this post, it’s that knowing your exit strategy is an important part of your adoption decision.
Consumers are starting to demand control and access to more of their data – you should too.
What to look for: machine-learning and historical data storing can be really beneficial for you. Still, find out what the process of migrating data into other software is. It may be a warning sign if there isn’t any.
4. Software Integrations
If you’ve never seen Chief Marketing Technologist’s “Martech 5000” diagram, take a look.
One thing should be immediately clear: it’s crowded. While some softwares aim to create an “all-in-one” solution, the market has allowed specialized “point solutions” to gain prominence. The idea of a point solution is that businesses buy the best software for each individual problem. Of course, this is only possible because they can integrate with one another.
To be fair, integrations can be great for buyers. After all, more available integrations means more power and flexibility.
But integrations also make products within a software stack more difficult to replace.
Firstly, when your solution has to integrate with multiple other softwares, it limits the available alternatives. And building those integrations with a new software introduces a whole other level of complexity. In a way, it’s another form of an initial investment.
But secondly, integrations can help mediocre software survive. As long as it fills a need within the stack, a second-rate software can be used to simply support a better solution.
What to look for: be wary of your software stack becoming too complex. Consolidating software vendors should be the default unless there’s a good reason to go the route of point solutions. Recognize when you’re “stuck” with a solution because it fits in your stack.
A Healthy Partnership
The best way for a software to maintain clients is not by being sticky, but rather by consistently offering value to its users. As a consumer, this is obviously what you want to see – software that more than delivers against its costs, software that informs or supports business decisions to make you more competitive.
As a software provider, repeatedly providing value is the only way to survive in the long-run.
What to look for: Your team is an advocate of the software. You often hear the software cited for facilitating smart business decisions. When it comes time to cut the budget, teammates come out of the woodwork to ensure that platform stays in place.
Why Are We Here?
It’s a question every software provider must constantly ask themselves: why are we here?
Software that stays in place simply because the process of removing it, either because of complex integrations, long-term contracts, unreasonable replacement costs, or large upfront costs, should get back to developing.
While times are good, these software businesses may seem healthy – but come budgeting time, they’ll be the first to get cut.