Yesterday, my go-to Twitter application, Hootsuite, decided to go ‘freemium.’ Without getting into the pros and cons, I’ll just say that while they are still offering a free service, it is very limited compared to the rich features I’ve been enjoying for a long time. This has created quite a backlash amongst their users, with accusations of bait & switch. If you’re interested in seeing some of the sentiment – just search on Twitter for ‘Hootsuite’ and you’ll see the range of reactions.
The bigger lesson here is to start thinking about how this applies to customer service, and how it could apply to your own business when you have to change the model or create revenue streams, and even to bloggers who want to monetize their sites.
Some thoughts sparked by this whole debacle:
1) No matter what business you are in, if you willingly provide a service to people for free, those people are still your customers and deserve to be treated as such – not as second-class citizens.
2) If you build a business model on the information, feedback and support you got from a free user base – don’t take that for granted. Instead think about how you can continue to support them. Just saying ‘well you got the services for free for a long time and now it’s time to pay’ – is not acceptable. Can you ‘grandfather’ them in to your new service rather than alienate them, or somehow reward your loyal users?
3) The line between a profitable business model and treating your customers like commodities is thin. In Hootsuite’s case, I understand providing a limited free service, but wanting to hijack people’s Twitter streams with ads – that’s a disrespectful step too far and devalues the whole point of using the service. Remember that ‘users’, ‘readers’ or whichever term you use, are actually people – not just numbers. [update – Hootsuite’s site is unclear on whether the ads will be broadcast as updates to your followers, or if they will be integrated into the layout of Hootsuite, but not broadcast ]
4) The moment you make people feel disempowered, cheated or excluded, you’ve lost them.
5) Are you OK with sacrificing the good will of a chunk of people for the purpose of your monetization strategy? Scaling a business can be difficult – Hootsuite has to make money and to do that they have made the decision to sacrifice the good will of some people. You can’t please everyone all the time and in your business you may have to make tough decisions about which people you want to continue to please and acknowledge that some will be upset. What could you do to minimize the growing pains?
6) Hootsuite are charging for the features that made it unique and awesome in the first place– now the free service is no better, and in some ways worse than a lot of other free apps. How can you monetize your business without diluting the unique thing that made it appealing in the first place? If you trade in your unique-ness then you’re giving people an open invite to look elsewhere.
What has been your experience with a service that has gone ‘freemium’? And what can you apply to your own business to continue to foster loyalty and good will amongst your customers?
*header image courtesy: http://www.flickr.com/photos/jemsweb/19612191/