I need to rant about something…
We live in the greatest time in history for having access to tools and information.
It’s astonishing how many incredible tools and services are available to us right at our fingertips, many of which are completely FREE.
Yet instead of being grateful, many people have become totally selfish and entitled…
Which is why I believe that FREE IS BAD FOR BUSINESS!
Let’s look at the example of Evernote, a software company with over 100 million users.
I’m a big fan of Evernote and I use it every single day.
How about you? Do you use Evernote? Let me know in the comments at the bottom of this post.
So a few months ago Evernote made an announcement and people were FURIOUS about it.
Evernote announced that they were changing their pricing model (and in a very nominal way, I must add).
They announced that their Basic plan, which traditionally was free, would remain free…
However, users on the Basic plan would now only be able to sync their Evernote account to TWO devices at a time.
HOW DARE THEY, RIGHT!?
Seriously, people lost their minds.
For context, the upgraded plan costs less than 4 bucks a month, and Evernote’s most expensive plan is less than 8 bucks a month.
Now, normal, everyday users getting upset is one thing; for every change that a big company announces, there will always be naysayers.
But the fact that many of the people who were upset were business owners themselves, absolutely blows my mind.
How do you think Evernote affords to serve over 100 million people? Many of whom are using the service for FREE.
They’ve got to generate revenue from SOMEWHERE!
So the issue here isn’t that Evernote switched their pricing model, which they had every right to do.
The issue here is ENTITLEMENT.
Why do we think we should get everything for free?
Who does that really serve?
Here’s what I really think, and I would love your thoughts on this.
Free is bad for business. And there are three reasons why:
If you are offering a widely used product or service, you need to dedicate a lot of time and resources to supporting your user base.
I learned this in a big way while running my software company WishList member.
We had tens of thousands of customers. It took a TONNE of support.
Offering great support to all of your customers isn’t cheap and it isn’t easy, but it’s definitely necessary.
If people are using a company’s product, it’s in their best interest that the company continues to invest in developing and improving that product.
This ensures a great user experience over a long period of time, and lets the product adapt to the changing demands of the market.
This type of ongoing development is a huge financial investment.
If a company is giving the product away for free, where does this money come from?
If you’re giving your product away for free and you are funding the support and development of that product, both of which are essential, the money still has to come from somewhere.
So you would need to invest your time and energy pursuing funding or other monetization methods, both of which distract you from your main objective of supporting your customers and developing the product to fit their needs.
So yeah, free is bad for business.
Every business needs to generate revenue, and if that money isn’t coming from the product itself, it must be sourced from somewhere else.
And like I said, that takes the focus away from the product itself, which is bad for both the business and the end user.
If you are a business owner, I want you to remember this.
The big lesson that all of us should take from this is:
BE THE CUSTOMER YOU WANT TO ATTRACT
If you don’t want whiny customers, don’t be a whiny customer.
If you want to attract high-quality customers, be a high-quality customer.
It is crazy the hypocrisy displayed by some business owners…
People who sell coaching but have never hired a coach.
Or they sell courses but would never buy one. Or they sell memberships but would never join one.
You get it.
Let me repeat: BE THE CUSTOMER YOU WANT TO ATTRACT.
When you have this mentality, it changes a lot of things.
At the end of the day, I am happy to pay Evernote for their highest priced plan. Because I use Evernote every single day.
For me, the value of Evernote far exceeds what I’m paying.
And I want to pay them to support their business because I hope the product they are offering will be around for years and years to come.
And that’s what I hope my customers think, too.
I hope that if my customers like what I provide and want to see more of it in the future, they will continue to invest to support the development of what I’m offering so that I can continue to serve them for years to come.
Those are the kind of customers I want to serve, so that’s the kind of customer I choose to be.
When a business is paid for their product directly, they can focus all of their energies on supporting and developing their product, to continue serving their customers.
In this scenario, everybody wins.