SaaS Companies and Holding Users Hostage

Much has been written about building “stickiness” into digital products.  The battle cry of “Users over profits” have echoed far beyond Silicon Valley and have led thinkers and writers (most notable among them being Nir Eyal’ of “Hooked” fame) into a kind of rebirth about the whole purpose of digital products.  Traditionally, engineering has driven the tech sector understanding of products as being created to help people do things they want to do.  Recently however, marketing and business driven organizations have made clear that products also exist to create value for the companies that build them.  

You may have noticed the change in the way software has been marketed over the past ten years.  We’ve quickly moved from expensive one-time purchases (think CD’s) to low upfront cost subscriptions with free trials and small, monthly payments.  Software is more available, cheaper to dabble in and easier to move between competitors than ever before.  Books like “Hooked” have helped a generation of Software-as-a-Service entrepreneurs realize that the best way to maximize customer lifetime value was to keep them in the subscription model as long as possible.  Eyal’s Hook Model cycle (Trigger, Action, Variable Reward, Investment) was an influential way of understanding how to do so most effectively.

First, the trigger prompts a user to use the product (think an Instagram push notification).  Then the user performs an action (opens Instagram in their phone).  They’re treated with a variable reward (a multitude of unpredictable people and visual stimulation).  Finally, an investment ties some of their future to the product (posting a photo).

Investment usually requires users putting something into the product in expectation of improving their experience next time.  Investment is supposed to make the user experience more personalized, simple, and enjoyable.  

Think of Facebook.  Many people have invested time into combing their friend list and crafting an online image that aligns with their hopes and self concept.  Given this investment, a user wanting to leave Facebook has to weigh the pros and cons of leaving all that investment behind.  We all make these calculations when deciding to abandon or continue using a service, or pursuing any course of action more broadly.  Sometimes we decide to leave a service behind, and sometimes that service does everything within it’s power to “convince” us to stay.

Try to delete your Facebook account (don’t worry- Facebook will only hide it from people and you’ll still be able to sign in).  Just after you tell Facebook you want to leave, you’ll be confronted with photos of your closest Facebook friends.  “Jessica will miss you!” they implore, citing ‘memories’ the two of you have ‘shared’ on the platform.  Facebook will put words in the mouth of friend after friend to manipulate you into not disabling your account.  They’re acutely aware of the emotional need their service fills, and they know that the people you’re connected to (a large part of your ‘investment’ in the service) are the best way to steer you away from leaving their product.

Screen Shot 2017-07-23 at 6.01.20 PM
An example of Facebook’s retention tactics.


Emotional manipulation.  Facebook holds users hostage with their own feelings.  Features like these are born from meetings built around increasing user retention and decreasing customer churn, and it’s easy to see how a conversation about user retention can lead to one about keeping people from disabling accounts.  But a fine line has been crossed.  There is a fundamental difference between convincing and coercing.  There’s something gross about algorithms using your own soft spot for human connection to help maintain a user base to advertise to.

Emotional coercion is not the only way some SaaS companies hold users hostage.  Much like database hacks where hard drives are locked down until a ransom is paid to keep from losing all your data, some SaaS companies use your data to force you to remain on platform.

A company I work with has recently decided to move off a patch-work web solution we’ve created on Squarespace into a more full-bodied CMS and design solution with Webflow.  While attempting to export our existing site data, I found out that Squarespace does not allow the exportation of content from their webpages.  We did it anyway, with our data essentially held hostage by the platform.  Squarespace knows it’s a hell of a lot easier to export a Zip file with a website than it is to extract hundreds of photos manually and copy/paste over 100 blog posts into an Excel file, and that that difficulty will “convince” a certain percentage of users to stick with their platform.

I searched “Can I export my Squarespace website?” in Squarespace’s knowledge base.  The answer was a thinly veiled version of “No.  We’d bleed users if we allowed that.  Well, you can export to WordPress.  But only because they don’t have a native visual builder.”

I’m in the business of helping startups and tech companies grow and retain their user base.  I understand the thought behind these kinds of decisions.  There are revenue and user numbers these people are accountable for.

But what about the users?  Building a product for revenue at the expense of user experience is a dangerous game to play.  If the measure of a product is it’s ability to deliver value,  then its ability to serve its users can be guessed at by the hostility it shows them.  Hostage taking and deliberately user un-friendly behaviour aimed at holding onto wayward users might boost monthly numbers, but can hardly be assumed to build good will.

Email marketers have long known  about the magic of the double opt in.  Clearly, one can have a larger mailing list if one doesn’t require subscribers to confirm their email.  However, once confirmed, one double opted in subscriber is an infinitely stronger lead.  By allowing the uninterested and unconvinced go without hostile retention tactics, companies and marketers are better able to serve the people who really want their product.  The double opt-ins.  The passionate.

Who do you want to serve?