Are Free Customers Disposable?

Image by CC Chapman via Flickr

Phil Wainewright writes on ZDNet.com about how web giants are treating their customers

More
than any of these acts, though, the most constructive change would be
to get rid of the mindset that leads these Web giants to belittle the
circumstances of its ‘consumers’. Is it unreasonable of us to expect to
be notified if our account is being cancelled, or to want to know how
long you think is acceptable for us to have to wait for a satisfactory
answer to a support request? We are individuals — many of us with
serious business dependencies relying on our usage of your services —
and if you don’t treat us with respect then sooner or later we’ll take
our patronage elsewhere.

In fact, his entire post is worth
reading because it brings into focus the role of customers,
particularly the free customers in either the freemium model or
advertisement based model, in the SaaS ecosystem. As pointed out by
Phil in his post, many vendors are not taking the grievances of free
customers seriously. Usually, there is some response from them only if
the affected party is a well known blogger like Robert Scoble or someone’s blog post has reached Techmeme as in the case of the user in Joel Spolsky’s forums.

Even
though the prevailing opinion is that free users are just freeloaders
sucking up the blood of the vendors, it is not exactly true. Free users
add value to the vendors in many ways. In the case of Google, the major
part of their revenue is from the free users of Google search engine.
In the case of social networks like Facebook or Twitter, absence of
free users (network effect) will make these services absolutely
worthless. Even in the case of vendors offering a freemium model, the
free users add substantial value to them in the form of feedback and
word of mouth advertising. There is no way these vendors can consider
free users as just freeloaders adding no value to them.

I do
agree that the paying users are the ones who supply the oxygen needed
for the survival of a business. I also agree that these paying users
deserve higher priority support from the vendors. I have absolutely no
problem with it. However, it doesn’t mean that free users are
disposable. Just because someone’s business uses free Google Apps or
some other free offering from a SaaS vendor doesn’t mean that their
business is unimportant. Whether a business belongs to the Fortune 100
club or it is a small business operating in rural North Dakota, they
are in the game to serve their customers and their time is as important
as the CEO of a Fortune 100 company. Just the scale of the business
alone doesn’t make it insignificant. Plus, as I mentioned in the
previous paragraph, they also add value to the SaaS / Web Service
provider. Finally, and more importantly, they are the ones who will
eventually turn into paying customers in the future.

If a
vendor is not interested in taking care of free customers, let them not
play the game of Freemium or Advertisement based models. Let them not
think that they are doing charity to the free users. As Phil mentions
in his post, if the vendors do not treat the free users with respect,
they will take their patronage elsewhere and add value to the other
vendor. The ultimate loser will be the vendor who didn’t respect their
customers, even if they are not directly paying for the service.

Having
said that, I also want to point out that there are many SaaS vendors
who treat the free users like how they treat the paying customers. Just
visit GetSatisfaction.com and you will know how many service providers
have human representatives responding to the questions and grievences
of their free users. Phil’s post should serve as a warning to the
complacent web giants and other providers who have no respect to their
users and the value added by them to their service.

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