Two Ways to Influence Business Growth with API Documentation
Two Ways to Influence Business Growth with API Documentation
How can you drive business results with good API documentation?
You can argue that developers are the only beneficiaries of good API documentation. However, the power of a well-documented API touches almost all parts of a business. Keep reading to see two examples of how you can use API documentation to positively impact your business.
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Reducing the cost of API support
Let's begin with something many of you find important these days: reducing costs. One way of reducing API-related costs is being able to control how much you spend on API support. Did you know support is the number one source of spending during the whole lifetime of an API?
In "Building an API Product" I wrote a whole chapter dedicated to API support. It's interesting to notice that while "maintenance costs will have peaks whenever there’s a new release or a fix to the API code, support costs will keep growing over time until they become almost 100%."
Why does that happen? Design and implementation costs evaporate as soon as an API is "finished" and consumers are using it. After that, the only thing that still matters to consumers is that the API behaves as it should. If not, they'll look for ways to fix the challenges they're having, and that's where support comes in.
Unless consumers can get all the information they need from the API documentation. If the API documentation can be the preferred method consumers use to troubleshoot their integrations, then you'll end up spending less on support. There will be less hand-holding required as consumers can fix their issues by themselves.
A good example of an API product with good documentation that reduces support costs is SendGrid. They offer a full API reference, an onboarding guide, and quick-start guides in programming languages like Go, Node.js, and Python. They do offer support, however, they try to provide everything they possibly can to help consumers fix their challenges by themselves.
Increasing retention
Another way to create a positive influence on the results of a business is to increase consumer retention. Retention has a direct impact on revenue because it's used to understand the lifetime value of each customer. The Customer Lifetime Value, or CLTV, depends directly on the amount each customer spends and how long you retain them.
Increasing the amount a customer spends translates into a linear growth of the CLTV. However, increasing the retention rate linearly translates into an exponential growth of how much customers spend over time. You should see retention as a sure way to increase the success of your API product.
One of the factors that influences API retention the most is the experience of consuming it. I like to break down the experience into two areas. First, let's analyze how developer experience, or DX, can impact the way an API integration is built. Then, let's look at how API integrations directly influence the final user experience, the UX.
You can see DX as the inverse of API friction, something I describe as "the resistance that an API offers to anyone that wants to integrate with it." You can directly mitigate some part of API friction by providing good documentation. Factors such as the difficulty in understanding what the API does, the pain of testing an integration before going live, and the lack of SDKs are things you can fix with good documentation.
A positive DX leads to integrations and third-party applications that offer a good UX. Since the final users are the ones who generate retention, keeping them happy is crucial. Whenever developers create a positive experience through their integrations with your API, end users will certainly have a positive perception of your product. That, in turn, will lead to an increased retention.
Shopify is a great example of a company that cares about the relationship between DX and UX we were just exploring. Not only do they offer API documentation that includes all the elements that make developers comfortable, but they also care about the experience end-users have when interacting with their API. To do that they provide a stack that "includes a set of opinionated components, utilities, and tools that represent Shopify’s best practices for building custom storefronts on the web."
By owning the whole end-to-end experience they guarantee they have the best chance of influencing DX and UX. Developers have easy-to-use tools and SDKs available to build Shopify's storefronts. On top of that end-users feel a consistent experience across all storefronts built on top of Shopify. In the end, everybody wins and Shopify gains an increase in retention and business results.
Summary
To conclude, both the cost of API user support and customer retention can be positively influenced by good API documentation. While the cost of support is directly related to how developers interact with an API, retention measures how users of third-party applications indirectly consume an API. By providing good API documentation you can influence both factors and drive the success of your business.