5 Tips for Getting Your Business into Virtual Goods
To some people, it seems like a silly idea to shell out actual cash for things that don’t really exist. After all, how many times will you take a dip in your Frontierville Fancy Gold Hot Tub? (You can only get it by spending 430 American Express membership reward points.)
Nonetheless, the virtual marketplace is growing: With the rise of online games ranging from World of Warcraft to Zynga’s Facebook-hosted Farmville and Frontierville, growing numbers of players are willing to pay, and pay a lot, for an enhanced game experience. And all those bytes add up to big profits: According to Inside Network, the virtual goods marketplace is currently worth 1.6 billion (real-world) dollars.
That’s great if you’re Zynga… but how can you make money through selling virtual goods through your own website? Here are a few tips.
1) Make your virtual goods stand in for real-world symbols. For example, dating site HotOrNot charges users $10 to send virtual flowers to the objects of their affection. That’s far more than you might pay for a real flower, but it works because it serves as a romantic symbol, and recipients are likely to respond positively. It is, after all, the thought that counts.
2) Incorporate the virtual goods marketplace as an essential element of the product you’re offering. For instance, if you’re building a new social network (good luck to you, sir), give users the option to dress their avatars in custom clothes available in your virtual shop as soon as they create their accounts, not months later.
3) Listen to your users. You’re relying on your site audience to consume your virtual products, so pay close attention to their feedback. You might even consider giving them the option of designing their own virtual goods, as social networking site IMVU and online world Second Life have done. This strategy has helped IMVU build a database of more than four million virtual goods.
4) Create a virtual currency system. Few people are going to buy your virtual products if they need to type in their credit card number every time they want to purchase something. Start your users out with free virtual currency that will allow them to buy a set amount of goods without spending their own cash, then encourage them to purchase more virtual credits in blocks of $10 or $20. To outfit your avatar on your Xbox, you first have to translate your real money into points, then spend the points on the avatar’s attire, all part of making the transaction easier to justify psychologically for the user.
5) Don’t do it alone. Unless you’re a skilled designer and software engineer, you’ll likely find yourself way over your head when it comes to developing virtual goods. Find a skilled developer with past experience in the field to help you get your bearings in this bold new virtual frontier.
Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.