Question 46 of 365: How do users become customers?

I don’t usually use these terms, but I have continued to use them after reading a really interesting white paper on why Freemium models don’t work. I believe that we are all users of lots of products, services, schools, and ideas. We are much more selective as to what we become customers or consumers of. While this means that we are definitely more discerning when things cost us money, that is not the only kind of customer I am talking about becoming. I believe that if we invest ourselves into a product or service, we are a customer. If we offer something in exchange for the use of that service, whether that is our input, our content, or our network.

In that sense, I believe that I am a customer of Slideshare, even if I don’t pay for a premium service. I have invested enough into it that I upload my slide decks to it on a regular basis. I would be happy to pay for the service if they asked me to (and that is one of the major points of the Freemium paper, more companies should ask you to pay them for their service. i.e., more freeMIUM and less FREEmium.), but the simple fact that the service could be set up to accept my content as payment is something that I am ready to invest in. I would happily give over more rights to my content if I knew that the service could be free for a longer amount of time. I would be happy to let Slideshare use my slides for their own purposes (so long as they continue to attribute according to their TOS). They provide value to me. Why shouldn’t I provide value back.

The problem is that there isn’t enough consideration of bartering and payment in the groups, organizations and companies that we exist in. We do not see schools as a simple 1:1 relationship between teacher and student, or school and student. Because public schools are paid for by the public, there is very little individual incentive for a particular student to feel that they owe the teacher/school something and there is also very little to make the teacher feel beholden to an individual student for a paycheck. I’m not saying that all students should pay for their schooling because that sounds a lot like charter craziness or privatization. What I am talking about is making the transaction between student and teacher much more tangible for both. We need to actually talk through what the “business model” or learning equation is for our schools. What is it that the student is truly responsible for giving the school, and what is the school responsible for giving the student? This must be a two way street.

The only way that we will turn our kids from users of eduction to consumers of education is if they are fully invested in their own learning. If they see some direct benefit, they will pay for it, with effort and with creating portfolios of learning processes and products. When students no longer see schools as operating on a Freemium model (the majority of it is free, but you have to pay to be a part of the interesting clubs or sports or to get ahead with AP tests), they will start to take it seriously. Too often the method of “payment” is a grade. While this may work for a while (take the foursquare badges as an example), there must be a more permanent way to make the transaction of learning more concrete for everyone involved.

The world of business has been turned on its head so much by the whole idea of Freemium, the value of information, and massive user bases that it really has no way to think through just what kinds of transactions are taking place. Because Google can make money from advertising and offer useful products for nothing to the average user, we no longer see the transfer of funds for our time and our loyalty.

My contention is that we need to make the contract with companies and with individuals much clearer. We must state what is at stake for the consumer and the provider every time that we create an account. People must stop being so flabbergasted when Facebook changes their privacy settings because they don’t pay for the service in the first place. If the contract were easier; if we paid for the ideas up front, we wouldn’t have to worry about them “changing” the rules in the middle of the game. We should either give our content to Facebook in exchange for using the service, or we should pay for the service and be done with it.

That is why I propose that there are three different kinds of social contracts that we make with online services:

  1. Money for service
  2. Content for service
  3. Service for service

Money for service would be the easiest to understand and the one that perhaps the fewest people would immediately consider. It is the one that takes money out of your pocket and puts it directly into the pocket of the company that provides the service you are using. The second idea is that you should be able to provide your content to the provider as the fee for using the service. That would be like my Slideshare example above or the idea that Twitter is a content company and not a microblogging platform. The third type of payment is really much more akin to what Aardvark asks its customers to do. By asking its customers to pay their own way into the Q&A system by answering other’s questions, they are charging you an access fee that really only consists of you engaging in the process of providing service to others. Now, I do think that they could make it even more concrete by stating that until a user answers questions she cannot ask them. This is a tit for tat mentality that our online world is severely missing.

While I do not believe that this kind of concrete contracting is anything new, I do believe it is something that we need to consider desperately. If we are to survive economic and intellectual crisis, we need to be able to figure out just what we are paying for. And why.

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