What Chipotle Just Taught Us About Packaging Digital Products
I don’t know about you, but I’m pretty excited to find inspiration in Chipotle that I can apply to my work in tech (and that isn’t just because there is a Chipotle on the first floor of my office). But if you aren’t a Chipotle fan, then just trust me that you’ll still find this helpful.
At the start of 2019, Chipotle started a fairly brilliant marketing campaign where they created bowls tailored to specific on-trend diets:
New year begets new diets. On the surface this is just an opportunistic, smart marketing campaign. So why am I bringing it up in the context of digital products?
Look again at those bowls and you will find that there are no new materials or ingredients. Chipotle managed to create four new products without any new materials. While there’s nothing new about this approach with food because there are many things you can do with ingredients, digital product teams often forget this approach when it comes to packaging software.
Look at materials as code (in Chipotles’ case, the bowl), and the ingredients as product features. Then the names are branded packages targeted to a particular audience.
As digital products scale, often the first instinct is to continue building new features. This often works for the first few years because you’ll still be chasing what the market needs to build a solution that captures significant market share. But at some point, adding new features becomes expensive and often isn’t the most cost effective way to grow your product’s revenue. As you start gaining traction in a market, growing revenue becomes a game of product packaging.
How this applies to digital products
Okay, if Chipotle isn’t resonating, let’s use an actual software example to drive this home. One leader in packaging is Asana. Take a look at their footer to get a sense of how they package their product. They actually group their packages into workflow and team solutions:
I can’t vouch for all these product packages but they mostly share the same functionality. And given that they haven’t made any (public) acquisitions, it’s reasonable to assume that they’re packaging much like Chipotle: By reusing existing code and features to create user-focused products.
Understanding your consumers
It’s worth pointing out that packaging is more than just thinking of random names and seeing what sticks. As I imagine what both Chipotle and Asana did, it’s important to research both how your existing users are using your product and why potential customers are not buying it. My guess is that Chipotle did both. Customers can customize their bowls already — they’ve been able to create these bowls for years. Chipotle can easily study that and see what the common combinations are. In addition, they probably know that it’s challenging to sell their product at a time when many Americans become very diet-conscious. Boom, create packages inspired by existing customers, targeted at non-customers, with zero overhead.
It is likely Asana did the same thing with their team and workflow packages. Like Chipotle, they still have their standard product and features pages, but these packages let them tell more specific stories to capture new markets.
- Find common workarounds in your product. How can you build feature packages around these workarounds without writing new code?
- Identify specific segments or sub-markets you struggle to sell to. Are they asking for features you already have?
It’s worth noting that product packaging works best when you are targeting specific sub-markets of your existing target market; hyper-targeting makes product packaging extremely effective. When you are changing industries, or moving into much larger customers (say from SMB to Enterprise), often packaging can only get you so far because new markets will require new features. But for most startups trying to scale within existing markets, packaging is a killer growth and cost-saving technique.
I often use fast food to illustrate product packaging to software companies but never have I seen a more brilliant example than what Chipotle did on New Year’s 2019. While I have a hard time believing I could ever lose weight while keeping Chipotle in my lunch rotation, their diet bowls have me thinking it’s possible. But most importantly, I feel comfortable that Chipotle gets me as a consumer. And that is exactly what product packaging can do for digital products: It can help you find new ways to market your product at very little cost, while speaking more specifically to your potential customers’ needs.
When I’m not teaching you how to package SaaS products like burrito bowls, I’m the Executive Design Partner for Innovatemap. Or I’m busy helping designers get more efficient at UX Power Tools.
