Free business software products and services.
How much does free really cost?
We live in an age where one company’s core value product or service is another company’s free give away. Free products and services as “enticers” or “add ons” have been with us for many generations, particularly within the retail consumer market, but now they are becoming ubiquitous and in many cases completely replacing core systems, products and services. We now have a generation of professionals who expect their core social and business services to be “free”; from openly advertised services such as e-mail, Facebook, Twitter to the less transparent issues of obtaining access to music and film that is the copyright of others.
However we also see the free, or freemium model of business starting to become popular within business. The objective of this article is to attempt to create a framework to evaluate how “free” any particular product or service may be and if this “free”dom is appropriate for your needs (and there are many products and services where this is the case).
We are all aware that there is no such thing as a free lunch. The end User always pays in some way; from something as simple as parting with personal information, giving their time to try a particular product or service, agreeing to be accessible to advertising to the (for some) less palatable issues of release of privacy or access to friends and family. Very occasionally there is also the insidious drive towards parting with ever increasing amounts of real money as the buyer of the free service finds that with just a little more money they will actually get the product/service they thought they were “buying” in the first place.
As online marketing models become increasingly sophisticated and targeted there’s no escaping the subtle variations of free offers that entice us to connect with new suppliers at every click of the mouse. Even in my industry, if you’re considering something as important as using a free 360° feedback system (at least I like to think its important!) for your client or company, just like any other business service, it’s wise to take a good look at the real cost of the offer to avoid finding out if it’s cost you more than you bargained for.
I’ve put a checklist together to help you work out the true cost of ‘free’ products. I’ve designed it so you can use it to assess the cost of free business software of any kind, not just 360 degree feedback tools. There are ten questions to help you balance the risks and benefits of buying into free.
1. Is the free product peripheral or core to the developers’ portfolio of products?
If the free product is peripheral to the main product offering, it’s unlikely to be supported or easily adapted to the needs of your business. If the free service is related to the providers’ core product, it’s likely to be supported and may have some custom features too (but check on both). What’s more likely is that it’s a limited version of the paid service.
On a separate note. If you’re looking for a 360 degree feedback tool and aren’t quite sure on what your needs are, I’ll be sharing what I’ve learnt on understanding your organisation’s 360 feedback philosophy and use of behavioural development programmes in future posts
2. What are the user limitations?
You may find that only a small number of users can access the free product. Do you know how many users there may be now, or a year from now? Will the limited access cause problems now or in the future? Perhaps the paid service could repay itself in productivity gains from wider access
3. What are the project limitations?
Free products may limit the number of projects you can work on. If your business is small this may not be a problem, but for larger companies this is likely to reduce the value of the product. If you think you will need capacity for more projects in the future, check how you upgrade to the paid product or service without loss of data.
4. What are the time limitations?
Your free service may be time limited, giving you access to the product for 30 days for example. After this trial period you will need to upgrade or stop using the product. Will you lose data, or have difficulty restoring data to your previous platform? Remember, you may also lose the value of initial data entry costs, only having to key the data into another system if you choose not to upgrade.
5. Who owns the data?
Loss of control of business data can be damaging and costly. Find out if any of your data is stored in the cloud or on a remote server and what terms, conditions and privacy apply to that data. If you decide the product isn’t for you and want to change, how would you get your data back or protect it – can you download it or delete it? With sensitive data from a 360 degree feedback system this may be a critical issue.
6. What’s your investment in the relationship?
You may only be asked for your contact details, but you may become tied in through your investment of time, data and integration across your network or team connections. Make sure you know the extent of your involvement with the supplier and how much contact they expect to have with you.
7. What standard features are missing from the free product?
Are all the features expected as standard in your industry included in the product? If you’re not sure, ask if any standard features are missing from the product and what might be expected as standard in your industry. The answer should give you confidence in your decision to trial the product or not.
8. Is the product supported?
The product may be entirely suitable for your needs, but may not offer any direct customer service, may only give limited service or may give a full support service but only in an unacceptably long time frame such as 48 or 72 hours. Unsupported products can cost businesses dearly in lost time and productivity. We’ve found that ongoing, one to one support for our customers helps them make the best of their 360 feedback system.
9. Can the product be upgraded?
Some free products are stand alone and once you start using them that’s pretty much it, with no option for an upgrade. If you outgrow the capacity of the product, or if your needs change, you may have to write off your investment and start all over again with a new system. It’s worth asking what upgrades are available and how easy it is to upgrade.
10. How easy will your exit be?
If you’ve uploaded or formatted data, trained staff and integrated software your exit may be difficult and costly. If the data remains with you, the system doesn’t need any staff training and the system stands alone, then your investment may be sufficiently low for exit not to be an issue.
These questions should help you work out if the potential risk from using free products is outweighed by their value to your business. If you’re looking for a behavioural development system, please talk to us. We’re always happy to learn more about what our customers want from a 360 feedback system and want them to get the right system for their needs.
Only when you understand the level of your investment in a free product can you judge if free is a price you are willing to pay.