Having Paying Customers

by Krishna on May 13, 2007

I have started trying more of Zoho products. Zoho Sheet is a good online spreadsheet application. I tried importing one of my existing Excel worksheets which contained statistical data and a graph. It imported everything almost perfectly. The only problem was with the graph – apparently, it doesn’t allow you to select non-contiguous columns. I solved the problem by changing the columns, but one final problem remained: Any calculated numbers appear with decimal places in the graph even when they can be formatted as integers in the sheet.

However, I have to repeat: Zoho has a much better pleasant user interface than Google’s offerings at this point. They have to do a better job of marketing as well as staying ahead on functionality. And while I understand that making Zoho Writer and Zoho Sheet free will help marketing, but not having a premium offering is really going to kill them in terms of necessary funding for future development.

Having paying customers also fuels better features. Why? Usually, people have to be motivated enough to give you good or bad feedback. When you have a free product, people will put up with a lot of problems and try to work around them. When they are paying money for a product that frustrates them, angry phone calls and emails result. Although this is not pretty, it does put pressure on the development team to fix the issues that hurt customers more.

Typically, product companies have their prioritized feature set of what they think their customers want. Such lists may be based on heavy market research. But once the product is released, it is as important to keep the existing customers satisfied (within reason) as it is to gain new customers. Getting good feedback is a challenge, but you can increase the chances of that happening by a paid version of your product.

Another problem with free products is that people easily jump from one product to another. A few months back, I used Technorati extensively, particularly its blog search. Nowadays, I use Google Blogsearch 99% of the time and I only use Technorati for specific information about a particular blog. When I use a service for free, I have no emotional investment in that tool. When I pay for a product, I am personally committing to the product in addition to backing it with my money. I am more inclined to work through the problems and be patient a little longer.

And if the company displays responsiveness to my feedback, I feel I am taken care of and become more emotionally attached to that company. That builds a relationship. This is possible with free products, but lack of money will be an obstacle in allocating enough resources to handle this appropriately.

Some options for gaining paying customers are:

  • Having a premium version of the product: Many companies go for this option though it feels risky if your competitor offers the same feature for free. However, your competitor probably will not (and usually cannot) be offering support for free. Your competitor will not be able to make the same advances in the product for free.
  • Ad-supported strategy: Sometimes, ads can be obtrusive and cheapen the product. But they could be done right. For example, offer ads relevant to the content that is being displayed. Ask customers what type of products (household, sports items, etc.) they want displayed in the ads. Make the ad strategy clear and how privacy concerns are being addressed.
  • Donations: Not viable for every product, but it is not an option to be discarded. Customers who donate are more likely to do product evangelization and be its fervent supporters. The only problem is if one or more customers donate a lot of money and demand features that are inconsistent with what most other consumers seem to be wanting.

{ 4 comments }

Sridhar Vembu May 14, 2007 at 9:18 am

Thanks for the review of Zoho. On the business model front, yes, we hear you, and we will offer a paid version, on top of a generously featured free version. Zoho CRM is an example of this already: first 3 users are free, and then from the 4th onwards, it costs $12 a month.

The reason we haven’t offered a paid version on most Zoho offerings is because we still have some features in mind, and once those are completed, we will provide a subscription option. The limitation you encountered in Zoho Sheet with respect to multiple column ranges is an example of the kind of stuff we are working on.

On the marketing front, your point is valid, and we need to do more.

Thanks for the kind words and the feedback.

Sridhar

Krishna May 14, 2007 at 9:46 am

Thanks for your comments, Sridhar

Wishing you all the best with your efforts. And will continue to post more feedback as I use your products.

Thiyagu May 15, 2007 at 5:02 am

Hi Krishna Kumar,

Thanks for trying out Zoho products.

Regarding charting issues faced by you with ZohoSheet:

1. non-contiguous columns
Actually it’s possible to specify non-contiguous columns. You have to give the contiguous ranges seperated by a ;(semi-colon). Say you have data in ranges A1:B10 and D1:E10(so no data in column C), you can specify the chart ‘Data Range’ as A1:B10;D1:E10

2. Number Formatting in Chart
Right now, the format of numbers in charts is fixed. Going forward, may be we shall use the same format as set in the cells itself. Thanks for raising this.

Kind regards,
~ thiyagu

Krishna May 15, 2007 at 8:34 am

Thanks Thiyagu. The semi-colon seems to work fine

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