A while back I signed up for a KODAK Gallery Account to view a friends photos. Otherwise though, I’ve never used it. Then the other day there was an email in my inbox entitled “Important: From the Gallery’s General Manager‏”. Curious, I opened it. In part, it read (bolding is my emphasis):

Let’s put the issue right on the table: nobody likes paying for something that they thought was free.

I recently received some strong responses from Gallery customers after we asked them to make a small purchase in order to continue enjoying photo storage benefits. This may be a non-issue for you. However, if you’re not feeling good about it, please read on.

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The fact is, we store billions of photos for our 75 million members. The quality storage service the Gallery provides is significant in terms of our business costs.

To help offset storage costs, it’s long been our policy that Gallery customers make an annual purchase (of as little as 15¢) in exchange for unlimited photo storage and sharing. Even so, our customers who regularly buy Prints, Photo Books, and other products have essentially been subsidizing those who don’t shop the Gallery.

So that we can provide the highest level of service, we’re now asking all Gallery customers to make an annual nominal purchase in exchange for photo storage. We’ve modified our Terms of Service policy accordingly: if your Gallery photo storage equals 2 gigabytes or less, we’re asking you to spend $4.99 annually; if more than 2 gigabytes, $19.99 annually.

In return, you’re able to enjoy unlimited access to your photos while continuing to benefit from our efforts to make our service even better, including these latest feature enhancements

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At the Gallery, we believe in choice—including your right to unlimited access to your photos—and fairness: the benefits of photo storage enjoyed by all come at a cost that should be shared by all.

I often remark to my partners how shocked I am at some of the customer inquires we get. Detailed Image is hitting a size where we start to see everything. Customers seem perfectly fine with trying to manipulate our system to squeeze every last penny from us. This especially happens when we’re running a huge sale. Nothing is good enough - the 20% off or the free shipping or the 25% back in gift certificates (which have no minimum spend and can be used towards tax/shipping). They want us to honor old specials, they want us to give them our “highest discount available” (as if the promos we have out there aren’t), they complain that we’re profiting from shipping when we clearly pull quotes directly from FedEx and USPS (with our free shipping promos we definitely took a loss on shipping last year), and of course if all else fails and they don’t get what they want we (somewhat routinely) have customers blackmail us by threatening to issue a chargeback if we don’t meet their demands.

I think we do what any good business tries to do in these situations. We are constantly improving our policies and terms, particularly how we explain short-term sales to customers. We have discussed a strategy with our lawyer to handle the blackmail customers. When we do get inquiries, we stick to our policies but still treat the customer with respect and generally try to be fair and go above and beyond to come to an amicable solution.

Sometimes I wonder if we’ve done something to encourage this behavior. When I read this email from KODAK though, I realize it’s not just us, it’s everyone. Kodak did a great job with this email. It’s one of the better emails of this type I’ve ever read.

Consumer expectations need to change. In the offline world, but especially in the online post-web2.0, post-recession economy. If an organization wants to give something away for free because it’s open source or ad supported (or they’re Google), than great. By all means take it while it’s there. But 99.99% of online businesses can’t operate by giving everything away for free, and I suspect that the number of web services that are wholly free will drop significantly in the next few years and consumers will have to adjust their expectations to meet reality.

What KODAK requested is beyond reasonable. $20/year in photos for unlimited storage? Flickr charges $25 and you don’t get to have the prints from your $20 purchase. Yet people still bitch and moan and scream at the big corporation. Do they not understand how much providing free image hosting costs? Do they not understand that KODAK is a business and has employees to support? No one likes our current economic situation, but demanding everything for free just makes it worse in my opinion.

I brought this up to my partners the other day and they seem to think it happens in the offline world too. I don’t shop all that much offline, and when I do I’m in-and-out in as fast as possible, so maybe I’m naive. I don’t know if it’s a lack of understanding that a business is run by other humans who need money to survive, or a lack of respect for people in general, or just consumers who get off trying to take companies for every penny they can get regardless of the headaches caused. Whatever causes it, this behavior comes across as childish, overly selfish, and unnecessarily increases the expenses of the business. The customer service expenses for dealing with people like this are astronomical. Which in turn just raises the costs of the product/service for the majority of end users who are civil human beings.

We have made it almost impossible for people to call us, not because we don’t want to offer phone lines, but because we’d get several absurd 1-2 hour calls/day. People who call over and over again until they get what they want. As a four person company we’d be eating 1/4 of our work time on servicing a few bad customers. It didn’t make business sense. Let them email us and we’ll do the best we can to help in the manner we see fit.

I don’t know about you, but I’m happy to pay for and support the things I enjoy, whether it’s buying legit music or buying food from a local farmer or shopping at a local store instead of the national chain that’s 10% cheaper. If I can’t afford something, I don’t buy it. If I don’t read the terms of service before buying something, that’s my fault and I’ll pay the penalty. I value other people’s time and only get involved with customer service if absolutely necessary. When I do, I understand that the customer service rep is not the one who caused my problem, so no matter how bad the situation I try to be overly polite to them. It just seems like these things are common courtesies. Things people would do in any other situation, so why do they suddenly act different as consumers?