Box. The Marketing Model for the Next Wave of Internet Success

I recently tweeted about how Box saved me a good couple of hours by erasing my mistake of overwriting an earlier version of a presentation that I did not want to.  I simply right clicked on my file in my Mac Finder, selected Dropbox, and it gave me a list of all previous versions.  I then downloaded the version I wanted and voila...problem solved.  The experience did get me thinking about how impressed I was with Box from start to finish.  I recalled that this model is not a new one...but the experience was always clunky, prone to errors, and generally frustrating.  Remeber X Drive anyone?  

Not only does Box do a phenomenal job in what it was designed to do, provide reliable backup and storage, but they also do a great job from a marketing standpoint.  Particularly their business model being completely intertwined into new customer acquisition and customer retention.  

Allow me to explain...

simplicity

Everything about Box is simple.  The interface, well, it's about as clean as you can get.  The value propositions between the consumer, business, and enterprise are clear and easy to understand.  It also integrates directly into my experience on my Mac and also gives me the flexibility to 1-click into the web experience for a more granular view of file versions, sharing options, and more.  From a usability standpoint, the fact that I have no complaints is a sign that they are making a lot of great steps.  Everything from sharing folders to obtaining previous file versions is one click away.

it's contagious

Not only does Box do a phenomenal job delivering on their value proposition, they have successfully integrated a referral mechanism into their value proposition.  There is nothing simpler than setting up a  folder to share with colleagues, friends and family.  Every time you do that, the generous folks at Box provide you with more storage space.  Not something they have to do, but it is definitely an example of "delighting the customer".  Nothing makes customers happier than a company that goes above and beyond to the customer's benefit.  In the process, Box has probably generated at least 20-30 new customers from me just based on this feature.  So if it cost Box $100 to acquire me as a customer, the effective cost is now roughly $4 when you factor in the other customers I've generated (assuming they were not already loyal customers themselves).  Not bad from a business model standpoint.

it's predictable

By providing the value that they do, Box has a predictable revenue stream.  They create a high level of dependency (now that I can't live without it), the monthly subscription price is reasonable but it can add up to quite a bit over time, and the cost of providing the storage services should go down over time.  Having worked in the online dating sector where a subscription life closely resembles single life....you subscribe for a few months, then you meet someone and pause your subscription, then it doesn't work out, then you are a subscriber again.  That translates to a pretty rocky subscription life and tough to predict the future against.  Also, if the online dating service works as intended, then you will eventually no longer need to be a subscriber.  Obviously, Box carries the advantage of subscription life and predictability both for their internal forecasting but for their employees and shareholders.

freemium...perfectly executed

Box offers a 5GB version of the service for free.  While that size constraint does not satisfy the storage needs of most, it definitely can give a great taste of the value.  For me, it was enough for me to sync some files between work and home.  I was in the position where I was addicted to Apple's iDisk, which they killed in the iCloud transition.  Once it was close to the kill day, I need another solution and the Box free trial provided a great chance to try the service.  I can assume that this 5GB offer has very little negative effect to Box's profit line and it is enough of a taste to showcase the value.  Overall, it is a nice addition to the marketing model

In summary, Box executes all of the best practices of an online subscription service flawlessly.  It has also ensured that the value proposition ties directly into their growth and customer satisfaction.  While that seems logical, there are businesses that run counter to perpetual growth (Groupon???) 

Well played Box.