For a long time, the Law of Reciprocity worked pretty well in business. What is the Law of Reciprocity? Basically, if you or your business do well by someone, they naturally should want to do something nice for you.
In our case, let’s talk about doing something well for a prospect with the hope that they will be so impressed that they will become a paying customer.
The free software trial
You have undoubtedly taken advantage of a free software trial. Dropbox became a market leader by giving away free storage up to a certain amount of storage space. Individual cloud storage was fairly new and skeptical users (like me) tried it out and fell in love with the ease, simplicity, and peace of mind. The word spread fast because people could “gift” colleagues and followers a free subscription.
It worked really well. I even remember who I got my initial subscription from.
The limited access upsell
Of course software companies have developers and employees and vendors they need to pay, so they have to make money. If they have a free version, there needs to be an upsell where users are enticed to pay a subscription or one-time license fee for access to additional features. The free version may only be good for some time period, after which a user needs to pay, or there may be a very limited version that is always free.
Another way to generate revenue with a free version is to have ads. Power users may be willing to pay a subscription fee for ads to be blocked. I do this with YouTube and Spotify. I am sure you probably do it with some of your services.
The feeling of entitlement
What I have seen lately makes me feel sad, and a little bit sick to my stomach, if I am honest. I am starting to wonder if people will take the step from a free to a paid version of the service, even if the service is great, reliable, and did a huge public good at a time of crisis. Is our collective spirit of entitlement killing the Law of Reciprocity?
What has me thinking hard about this is Zoom. During the peak of the pandemic and stay at home, Zoom was a literal lifeline for families and businesses trying to stay connected. I have been a happy paying customer for years. I couldn’t run my business without it. During 2020, everyone else caught up. While you could always have a free Zoom account and host calls as long as 40 minutes, Zoom dropped that limit for a while, providing a huge service to our global community.
Please note: This was not free to Zoom who scrambled to scale technology and employees to support this insane surge of usage. Realizing they were asking their employees to really step up, they gave every employee a special stock grant.
“In June 2020, Zoom had just finished the craziest quarter of its business. While some companies had handed out office stipends or extra time off, Zoom took it a step further. Last summer it gave every employee a special stock grant, with the exception of Zoom’s CEO Eric Yuan, who declined the award.
For U.S. employees, the value was worth roughly $63,000, according to an SEC filing. But thanks to Zoom’s stock boom as the pandemic dragged on, the value of those shares has nearly tripled, and are worth around $171,000 today.
The goal of the special stock grant was to reward employees who had been under intense pressure during the pandemic, and also to convince them to stick around during a critical time for the business, the SEC filing states.” (Zoom gave employees stock to stay during the pandemic. It’s turned into a windfall.)
So, not only did Zoom step up to support its user base and prospective users, it tried to do the right thing for employees.
This is in stark contrast to companies who beat up and overwork their employees because they feel they are replaceable.
This is why I almost blow a gasket now when people complain that Zoom has gone back to the 40-minute limit. I have asked multiple people why they don’t just pay the very nominal monthly subscription fee for a product they have used extensively and loved. They say they don’t want to pay, or that they can use some other service for free, while also admitting that the quality of that service isn’t close to Zoom’s reliability.
I think those of us who had Zoom happy hours and family meetups and watched our favorite artists streaming music should consider the Law of Reciprocity and stop being entitled jerks.
Photo by Chris Liverani on Unsplash
