Thursday, April 26, 2012

LinkedIn and Freemium: Why Overselling a Premium Trial Is Bad For Brand

It's the dirty little secret that many online subscription services want to hide -- if they can get your credit card number and commitment to a 'membership', they can leech off of your bank account, probably for longer / significantly more cost than the amount you might have been willing to spend on the service. My most recent reminder of the audacity of this scam practice, was with LinkedIn and their 'premium' membership.

I mention LinkedIn in the title of this post, not because I consider them the worst offender. I think that the worst of the worst are pretty solidly in the neighborhood of scams that cloak the subscription commitment process (see the Scamville posts). In this case, LinkedIn is up front in informing you of the subscription, but it's the what you get for the price that got them this post.

LinkedIn initially got their hooks in through a free 30-day trial. Initially, the promotional email pitched it as a different version than their normal premium package. I remember reading it and getting the impression that this was a new program that they had started that would cost less and add some unique features that I might use. Considering that I had been active on LinkedIn for over three years before they targeted me with this program, there is an implied notion that this program was different than the premium package that I had already chosen not to pay for.

And so, for 30 days, I got the opportunity to see who had looked at my profile, the chance to send 10 introductory emails through LinkedIn -- something that I hadn't used any of the default five of -- and LinkedIn's tribute to virtual goods, a badge on any resume submissions that I sent out. And, while it's pretty cool being able to see who has viewed your profile, the package is certainly not something that I would run down to Fry's and buy for $30 if it were in a box. In fact, at $30, I would never buy these features -- but I might 'forget to cancel' a trial of the service. Thirty days out, I might even have forgotten what the price was that you initially quoted. And so, hooks in my wallet, LinkedIn proceeded to suck money and destroy any brand equity that they had built with me.

LinkedIn Premium ran in the background for over a year. I didn't really think about the cost until the other day when I happened to be looking at my bank statement and saw the LinkedIn charge. A sense of outrage came over me. They sucked $360 out of my account over the course of a year for a 'product' that I wouldn't have spent $30 on. $360 for a stream of trivia about who viewed my profile.

Ethical Business Practices Don't Operate This Way
Contrast this practice with Basecamp. Several years ago, I first signed up with Basecamp to share files and collaborate on projects. At the time, there wasn't really anything quite like it. Since then, competitive solutions for aspects of the service have come online. Sometimes, I'll go through a month or three where I don't use the service. But I still maintain a subscription.

Each month, 37Signals emails me a receipt for the charge. Each time I receive it, I ask myself whether it's worth continuing the service. It's been over five years. This is what an ethical business practice looks like. This is one reason why I have a tremendous respect for the team at 37Signals.

Subscription Pricing
Nobody ever forgets the cost of their subscription. At $60 per month or more, depending upon the edition, it's not something that you forget. Even within the corporate budget, the question repeatedly comes up, "What about Do we need to keep paying for it? Are we really using it?"

At the other end of the spectrum, you have the subscriptions that try to disappear and hide invisibly. Remember when AOL moved from being your go-to dial-up ISP to an afterthought in the broadband world. They dropped their subscription pricing to $10 per month -- keep access to your email and use dial-up if you need it was the pitch. Eventually, they dropped the cost of maintaining an email account to free, but they made you jump through hoops to get them to stop charging. Think about all of those people who sat there -- and for how long -- with AOL leeching $10 or more a month.

Now look at some of LinkedIn's premium pricing options. At $30 per month (or $20 per month for the API connection), it's high, but not necessarily reaching the level of a something that you question the cost every month -- particularly if you're not being reminded of it. It's the cost of buying lunch for your colleagues. And yet, it's also almost a "how much can we get away with" price. And when you consider what you get, I don't think it's something that every user would benefit from -- more likely applicable to a select set. So, basically, you're dumping these crap features on me, leeching from my bank account, and testing the threshold of what I might tolerate? Congrats. You crossed that line.

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