Isango8 - providing project management and accounting support for SMEs in the South and South West

There’s no such thing as a free lunch – 6 ways that free cloud apps aren’t free

We’ve all heard the expression that ‘there’s no such thing as a free lunch’ but it’s true that a significant amount of people think that the cool app that they have just started using in the cloud is somehow magically paid for by the fairies! This post is designed to help you spot some of the ways that cloud software companies will use to part you from your money.

The cloud has brought a huge amount of really useful tools within reach of even the smallest companies. I confess to having love for Mailchimp, TeamworksPm and GoogleDocs. I’m getting into a load of others too and I’m using them all on their free plans – but  ‘FREE’ doesn’t always mean free.

So how do companies charge for their services? Here are some of the business models;

1 – Subscriptions – This is possibly the most up front method that a company will use. You pay a set amount from day 1 of using the product. That’s it. Nice and easy to understand but often companies won’t give you a free period to see if you like it. Consequently if you sign up, enter all your data, train your staff then find out you don’t like it then you’re stuck. Bigger developers will use this and probably ally it with sales people.

2 – Advertising – This is the easiest to spot and is the method used by companies like Facebook. Seen all those annoying ads next to your profile? Well they are paying for your software. Marketers pay to advertise next to people who share similar interests and values to the product or service they are trying to sell. This is sometimes combined with the subscription model so it’s free with ads or if you pay a subscription the ads disappear.

3 – Reduced functionality – Want our app for free? Yes of course but if you want to do all of the cool stuff that it is capable of then you’ll have to pay. Apps like Prezi and Batchbook and TeamworkPM will give you the ‘lite’ version to get you using their product but when you want to do something a little more advanced then you’ll have to buy a subscription. This is a great way to get into an app but beware – some may not let you export your data if you decide to move away later.

4 – Restricted activity – This is the easiest to disguise. The app works absolutely fine in all respects but only up to a certain level of activity.  Want more users? Want to upload more times in a month? Want to send out more invoices? Then you’ll have to pay. Apps like Box and Dropbox use this model.

5 – Time limited – Everything but for a trial period only. The trial period is designed to let you have a look, play, get some stuff going and form a habit. Once it gets switched off then you can’t access your stuff and you miss it. Videoscribe use this but to be honest 7 days trial is too short in my opinion.

6 –  Composite methods – Some or all of the above. You’ll find that the more you pay the more users you can add, the more functionality is available and the more like a custom made application it becomes.

The cloud has led to a massive increase in the amount of apps available. The quality is variable to be honest but the one common theme is that they haven’t all been designed out of the goodness of people’s hearts!* If you are unsure then carry out a Google search, do lots of research and work out how you’ll use the service or alternatively see the advertisement below.

Let’s be fair, some of these companies have spent millions bringing to market a superb application that will make your life a lot better so they deserve to be paid for their effort and they are honest and upfront about the whole thing. (look for a page on their site called ‘Pricing’ or ‘Plans’). Some though aren’t totally transparent and users only find out what they have to pay for when it’s too late.

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This is what I do for companies. If you are thinking about buying software then call me first. I give an independent and impartial view as to whether it’s a good move for you or not and it’s a lot cheaper than making the wrong decision.

 

*  Yes Linux,open office etc. HAVE been designed out of the goodness of people’s hearts but in general the majority of the stuff you come across in internetland will be trying to work out how to get into your wallet.

Isango8 - providing project management and accounting support for SMEs in the South and South West

What buying behaviour is and why you need to know

We all want people to buy what we are selling right?

But I’m a firm believer that we can’t make people buy they have to choose  to buy.

If we understand how people choose to buy then we can put in place all the information they need to make a positive choice. Buying behaviour is all about the steps people go through when they are making that choice.

Think about the last thing you bought. How did you decide who to use or what product to buy?

Oddly, although we’re all different, research has shown that humans make buying decisions in the same way. We may take longer or shorter time, gather more or less information but we still go through the process.

There are 5 steps in this process and the great news for businesses is that understanding these steps allows them to make it easier for the consumer to choose their product or service.

These are the steps that people go through when they are thinking about buying something;

  1. Recognition – people realise there’s a need either on their own or they get prompted.
  2. Search – when they realise there’s a need our prospective buyer will do an information search. They’ll probably do an internal search ( memories of good/bad experiences, recommendations that friends have made, ads they’ve seen) or they’ll do an external search by checking Google or asking around. They’ll look at all the features of something they want to buy and maybe subconsciously will rank them in order of importance.
  3. Matching – they’ll make up a short list of possible buys and then match them against the ranking that they made up in the previous stage.
  4. Choice – They’ll form a short list and then make a choice based on the results of their matching process
  5. Purchase – they actually go through the process of buying

However there’s something important that businesses need to know. A buyer can choose to either re-start or leave the process at any time. So if your prospect gets all the way through to stage 5 and your purchase process isn’t smooth and intuitive then they can easily drop out and go and find another supplier. Similarly if no product gets through the matching process they may go back and do another more detailed information search.

Stage

What buyers do

What you need to do

Examples

Recognition

Realise there’s a problem – decide whether to do anything about it

Prompt people to realise there’s a problem or create a need

Insurance, car cam belts, gas boiler servicing

Search

Look for information on solutions both internally (memories) and externally, develop assessment criteria

Make sure you are around and that they can find information, make sure that you are memorable so that you are stored internally

Google, tourist information,key fobs, Meerkats, loyalty schemes

Matching

Assess features and benefits of each against their criteria developed in stage 2

Ensure your benefits are clear and that you compare favourably. Factfind. Give incentives or bespoke

Mobile websites, comparison sites, comparison charts

Choice

Decides which (whether) the product sufficiently matches the criteria

Spell out how your product meets the need, answer request for further information, bespoke your service

Statement of benefits, Car websites

Purchase

Goes through with the purchase then evaluates their experience and stores it in memory for next time

Make sure it’s easy to buy

Repeat orders, shopping lists

The process is longer or shorter depending upon how important the purchase is. The more important a decision, the more consequences or the more expensive then the more information the buyer will seek. Would you look to do a structural survey on a shed? Probably not. The consequences of getting it wrong won’t be as disastrous as choosing which house to buy and it doesn’t cost as much money so consumers won’t look for as much information and won’t view as many alternatives.

As an aide i’ve included some questions below, see if it gives you any inspiration for marketing your business or product

Stage

Questions

Recognition

  • At what point do your customers realise their need?

  • Is location important (A kebab shop outside a pub)?

  • Is timing important (Buying a cycle helmet with a new bike)?

  • Can you induce need (Telling customers that they need to get their boiler serviced)?

Search

  • How would a customer find out about you?

  • Are you memorable?

  • Would they recommend you?

  • Are there any places that people always look for your service?

  • Are there any times that they look for information?

Matching

  • How do you show your customer that you match their criteria?

  • What methods are available to help the ‘ticking off’ process

  • Is the customer able to bespoke your service?

Choice

  • Are you able to spur a customer into choice?

  • How do you avoid your customer going round again?

Purchase

  • Do you make it easy to buy?

  • Are there any blockers to buying?

  • If there are can you remove them or make them easier?

  • Is it easy to repeat buy?

These are the steps for a personal purchase and we’ll usually make them in isolation but often the business buying decision can be the same or similar. It may have more formal steps, it may be longer but it’ll still contain the same basic methods although it may well include more people in the decision making process.

If you tailor your service or product to the way that people buy you should have happier customers. Happy customers will come back (because of their information search) and you’ll have a busy business. Everyone’s a winner!