Business

You do get what you pay for: why we should embrace paying for online services

July 26, 2021 by Mark Davis

Everybody loves a good freebie from time to time. There is a certain satisfaction to getting a product or service and not being asked to pay for it. Wouldn’t it be great if everything was free? Well, no. If you really think about it, it might not be such a good idea at all.

“There’s no such thing as a free lunch”, “You don’t get something for nothing”, “You get what you pay for.” The English language is full of proverbs and sayings that warn against relying on freebies, and for good reason. In the world of B2B, free online services have their limits and can actually damage a business’ performance. Things can be free, but still not worth it.

This article explores the limits of free services, or rather, the benefits of actually having to pay.

 

The race to the bottom: a trap worth avoiding

As consumers, when we shop online, there are usually at least three options open to us:

  • filter by most expensive first;
  • filter by least expensive first;
  • filter by reviews and comments.

It’s the same principle for professionals. There’s a price war raging online. The « Freemium » model (free trial of a Premium service) that can be applied to digital services is enjoying growing success, especially amongst startups.

It’s not about cost or price. It’s about worth

The race to the bottom price-wise is showing signs of coming to a halt. A growing number of businesses are accepting having to pay for a B2B service. A higher (yet still reasonable) price is a sign of quality, reliability and reactive customer service. These things do cost money, and so they should.

For entrepreneurs paying for these services, the stakes are high: the point of a “premium” service is that it improves a company’s performance on a day-to-day basis. Business owners and managers would rather avoid paying several times for a mediocre service or waste their time with something that just doesn’t do the job at all. If the service brings value, then it’s worth whatever price is being paid for it.

💡 Let’s take as an example a team in charge of a company’s SEO performance. Their goal is to get as high up in search engine results as possible. There are plenty of free tools out there but the risk is that the team will spend time wading through them all without ever really progressing in terms of strategy. Paying platforms, on the other hand, will offer all-in-one dashboards that provide a richer choice of key words, or even advanced features such as simulators and ongoing training as the search engines’ algorithms evolve. Beyond simple SEO performance, the premium tool may even enrich employees’ skillsets.

When "free" actually means "cheap"

When it comes to B2C business, many consumers consider that their health and well-being, their safety and that of their families come first. There's a similar vision in the world of B2B, because the limits of free services become apparent very quickly. It’s better to invest in a product that costs money if that product proves its worth in decisive moments by keeping the business healthy.

Take your business, for example, and ask yourself the following questions: 

  • How far would you accept to lower your own prices?
  • What image would that project of your company? 
  • How do you perceive competitors who undercut market prices?

One of the first things that usually spring to mind is a doubt over the quality of the product or service in question. "Free", like "cheap", is a word that can carry negative connotations.

💡 As another example, imagine you’re in a marketing team that communicates with customers via a newsletter. Some providers propose a subscription that is free unless you want to add graphics, images or tables, in which case you need to pay a supplement each time. This can generate another cost further down the line: if you ever want to change your newsletter provider, you’ll have to pay a princely sum to transfer all the email addresses and other data from one supplier to the other.

 

The B2B subscription model that has true worth

Among the plus-sides of the paid subscription model is peace of mind from the customer's perspective: you know exactly what you’re going to get in advance because you can test it first; if it doesn’t meet your needs, then you can cancel your subscription; if it does everything you want it to, then you know exactly what you’ll be paying. There are fewer unknown or variable factors.

By contrast, free or discount offers may, in fact, turn out to be expensive if they are to satisfy all your own needs and those of your customers. Each little extra feature not included in the package comes with its own cost. You may have no idea at the start of the month how much you’re going to pay at the end in order to use the service. The ad hoc nature of the free service makes it more difficult to plan with precision.

When it comes to a digital tool for a B2B company, a no-obligation subscription means it’s possible to test drive all the features and functionalities of the platform before committing to payment. Whether the tool is for managing finance or accounting, social media followers, customer relationships or online reputation, you get to try before you buy.

A subscription model also promotes good customer satisfaction and allows the service provider to invest in R&D, to make the offer better and better over time. If a company provides a paying service with transparent and fixed prices from the outset, it’s in that company's interests to maintain quality; its customers pay, so their expectations are high, therefore the value provided must not drop. The service needs to be improved continually to meet its customers evolving demands.

It’s an old saying that remains as true today as it ever did: you get what you pay for. A free option might turn heads initially, but it’s very possibly just a short-term win. Quality inevitably comes at a cost but if that quality comes with value, then it’s worth every penny.

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