The Curse of the Freebie Seeker…
“reactivate and turn off auto renew scumbag”
“Those who spend the most complain the least.” – The Four Hour Workweek by Tim Ferriss
This isn’t new information to me.
Probably isn’t to you either.
But I was reminded this week just how true it is. Those who spend the most do complain the least, it’s true. But the inverse is also often true.
Those who spend the lease (or God forbid, get everything for free) complain the MOST. Almost constantly.
They get angry and spew personal insults. They make ridiculous demands.
And here’s the thing…
We’re to blame for this.
Businesses, and especially conventional “customer service” people LIVE to cater to these people. They’re the worst customers a business can have, often costing MUCH more money, time, hassle, anguish, and energy than they contribute in dollars.
A company I’m working with recently did a special $1 trial offer for their monthly service that normally costs $300 a month. The regular price for the trial is $7, so this isn’t even much of a discount.
The existing members who stuck around after the $7 trial and now pay the $300 a month are (generally) great, happy, engaged customers. Why should this be any different?
People say cheap is the new free…
I think they’re right. They might mean it as a positive, as a strategy. And certainly some of these $1 buyers will stick around. The thing will be profitable.
But there’s a dark side to cheap. Even worse than free in some cases.
It takes a real special kind of bad customer to complain about something that’s free. These people are out there.
But when you charge them, even $1, now they’re ENTITLED To something.
One upset $1 guy I talked to had an issue where he bought the $1 offer and immediately cancelled.
So, shockingly to him, it seemed, when he cancelled… his service was cancelled.
He got mad and invoked the big PAYMENT that he made.
“thats dumb…. when i cancel I should still have the trial that I PAID for”
It was when I explained how it worked that the insults started. But that’s not what this post is about.
It’s meant to be an insight into the mind of a freebie seeker. By understanding how this parasitic enemy thinks, we’re better able to defeat him.
Because he PAID, he felt entitled to make demands.
In the conversation, he clearly said that his plan all along was to cancel at the end of the trial. He knew he would never become a paying member. He just wanted it because it was $1.
How many trades do you think he’s going to place?
How much money do you think he has?
The screenshot at the top of this post is real.
“you’d make more money if the rate was $10 a month
justsaying”
Yes. By reducing the price (that many people happily pay) by almost 97%, profits would increase magically.
The only thing that would increase is the number of low quality, high maintenance customers like this guy. I’d have to hire more customer service agents (creating jobs?), and have a harder time keeping good ones because let’s face it, nobody with options wants to be abused by guys like this all day.
More customers at a MUCH lower rate is not necessarily better, even in the highly unlikely event that, on paper, it looked like it would be more profitable.
People who pay more are a MUCH better group of customer. The same company has another product that sells for $2500 a year. And there aren’t a HUGE number of customers yet.
But guess what? We almost NEVER hear from these people. They buy the thing, use it, benefit from it, and don’t require constant hand holding and ego stroking.
Big difference from the $1 guy.
To be clear, I’m not writing this saying that the $1 promo was a bad idea. It’s far too early to tell.
But I am saying that just like you get what you pay for, in business, you get the kind of customers you charge for.
I answered a question on Quora today about how to keep cheap customers from wasting too much of your time. If I had to add anything, I’d say that the best way is not to waste their time by attracting them in the first place.
If you must, or if you get some anyways, the only answer is to give in to none of their demands, and make sure they know if they don’t like paying for valuable things, they’re welcome to leave.
So many businesses chase the low end, but there’s a lot more fun (and money) on the higher end of things.
Decide where you want to be.
–Mark
