Loyalty, My Dear Customer

by micah rich • March 2011 • Reading time:

A lot of companies lately have been sending me emails, saying they're discontinuing the free version they once offered me, and that I need to either stop using their service or upgrade and start paying.

I know a handful of people that promote exactly this: if you have a free plan on your freemium app, or are offering a beta version for free, transition everyone into a paid plan. If they don't want to pay, you didn't mean that much to them in the first place, and then you're not wasting time and energy on unpaying customers.

It seems okay from a wide angle. As a service owner, I definitely understand the sentiment. A Good Portfolio has 6x more free users than paid users, and moneybox.me doesn't even have paid users yet. Are those statistics good? Hell no. But will forcing users to either pay or leave make them really want to be customers?

The North Wind and the Sun were disputing which was the stronger, when a traveler came along wrapped in a warm cloak. They agreed that the one who first succeeded in making the traveler take his cloak off should be considered stronger than the other. Then the North Wind blew as hard as he could, but the more he blew the more closely did the traveler fold his cloak around him; and at last the North Wind gave up the attempt. Then the Sun shined out warmly, and immediately the traveler took off his cloak. And so the North Wind was obliged to confess that the Sun was the stronger of the two.

Love & Whirled Peas

Business isn't about money; business is the art of relationships. If you tricked someone into going on a date with you - "It's a whole group of us going, you should join us!" - they're not going to want to do it again. Let alone agree to start going out with you every week.

You want your customers to want to be customers. If they don't want to be, it's your job to convince them. People who are good at relationships, whether friendly, professional, or intimate, are the people who can figure out what each individual needs, and give it to them. We have such an immense power with the shit we work with in that we can individualize our software, so that we can target whole groups of similar people while still making them each feel like they're the only one in the room.

But Let Us Talk Benefits

You may be marginally convinced by the argument so far, but believe it or not, having that free tier can honestly help. Every account is a person, paying or not, who was interested enough to make a connection with you. You have their ear, and that's half the hard part about convincing someone to buy. Find the right nothing to whisper in her ear, and you have a customer you wouldn't have had turning them away. And that may well count for your other ventures, too. Assuming you're using the same Don Draper mentality and not pitching music boxes to people signed up with your motorcycle service, you could well cross-sell them on an entirely different venture.

These people, too, can offer valuable feedback about how you're doing, and in my experience will do so excitedly when asked. They know they're getting something for free and will often jump aboard an opportunity to repay you with something other than money. Trust me, beta testing and feedback are valuable if you want to learn what would turn someone from a free customer to a paying one.

And lastly, if you treat them right, like they're paying customers - as in, treat them as if they're the only person in the room - you will be rewarded with virality. People will tell friends, blog, and tweet about how quick your customer service is, even for free users, or how delighted they were when you surprised them with the feature hey needed. That's not advertising, that's better. People actually listen to recommendations.

In The End

Providing value for people is what we pay for. But we want to be in control of our own decisions. Don't offer free and take it away. Treat me like my opinion of your business is more important than any other part, and I will reward you with loyalty, recommendations, and an attempt at my wallet.

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