Atomz responds

Freshness Warning
This article is over 13 years old. It's possible that the information you read below isn't current.

I had a nice email exchange with Isaac Newton from Atomz sales and Mike Thompson, Atomz’s CTO and co-founder today. Apparently my recent missive on Atomz’s wasted marketing opportunities was passed around the company yesterday. What I discovered is that the free service offering isn’t a marketing blunder, but rather a generous decision to continue supporting legacy users after the companies business model changed.

When Atomz first launched, the focus was on providing search tools to small and medium businesses with prices ranging from free to $1000 per year. Hundreds of sites a day signed up for the free search service, quickly giving Atomz tens of thousands of users, both free and paid. The free search engine was designed to provide users with an introduction to the paid service. As people discovered the limitations of the free services, Atomz hoped that they would transition to being paying customers.

Like many other companies, as the tech economy started to slide and the VC money dried up, Atomz found that most of their free users were unwilling to sign up for paying accounts. People receiving a free service often place no real value on the service, and there are plenty of substitutes on the market. Someone using a free search service often doesn’t care very much about the quality of their search results, so they have no problems with switching to an inferior service. Mike Thompson told me that “despite the fact we had tens of thousands of customers using our free service, any effort on our part to get a portion of our free customers to pay for the service simply chased them to competing services — even if the alternate was an inferior product.”

Most companies, when faced with this reality, change their focus and begin to market to higher value clients. They alter their strategy to provide services to the enterprise market because that market has money to spend and understands the value of what they are getting. Atomz pursued this strategy, choosing to focus their product on the needs of their existing enterprise customer base. This allowed them to increase their pricing and sell into companies that were willing to actually pay for the product.

Initially Atomz tried to continue selling their low-end search product alongside their enterprise offerings. What they discovered was that the high-end customers they were targeting would often choose to purchase the products that were aimed at the low-end of the market. The features were just too similar. “We would have to cut so many features from our low cost search offering it was no longer competitive or we would be unable to sell our higher cost services because of the quality and features in the low cost product. Customers would typically choose the least expensive option even if it didn’t always suit their needs and our low cost products prevented us from selling our higher priced products at a price point that actually supported our company. “

So Atomz decided to stop marketing their low cost search products and sell exclusively to enterprise customers. When most companies do this, they notify all their free customers that they are discontinuing the service. Sometimes they suggest alternative services, but many times the just kick their free users to the street corner. What Atomz decided to do was different. Even though there is no legitimate business case for doing so, they continued to allow existing customers to use their free service. They also grandfathered in all their paying customers and continue to provide them services at their existing pricing levels.

Atomz decided to show some loyalty to customers that had been with them in the early days, even though they make very little money off those customers. Mr Thompson says there are “more than 60,000+ customers who continue to use our free search service. Providing server space, bandwidth and technical support to these customers is not a trivial cost and adds up to a substantial amount of money each month. Admittedly, the viral marketing we get from these customers is not ideal because very few are ever likely to upgrade to our current price points from a free service. However, we feel it would be wrong to simply yank the service from these customers and we kept the service going even at times of great fiscal belt tightening elsewhere in the company. We greatly de-emphasized our free service on our web site, but we do continue to offer it to those who may find it useful and we have every intention of doing so into the foreseeable future.”

That’s a refreshing viewpoint. Treat your customers with respect. Eventually Atomz may start offering a lower priced search service. When they do, they have 60,000 potential customers who are already familiar with the product. And even if they don’t, they have 60,000 people who are familiar with their brand. One of them might be managing a site large enough to require the search, content management, or promotion services that Atomz provides.

So if you are using Atomz search currently on your site and you fall within the 500 page limit, continue using the service. You are getting high-end search services for free.

Dan F
June 20, 2003 8:54 PM

Nice. It certainly is refreshing to see a site that cares about the customers.

Trackback from Compendium
June 26, 2003 6:07 AM

A vendor that cares

Excerpt: Adam Kalsey uses Atomz's free search engine on his site. He recently ran up against the company's 500-page limit for free search engines and complained (on the site, natch) that the next step up was a $15,000 service. ...

Trackback from E-Business Weblog/Newsfeed
July 2, 2003 7:27 AM

AtomZ

Excerpt: Kalsey ber das Geschftsmodell von Atomz....

VJ Billings
November 16, 2004 5:45 PM

Today, I went to search for a page on our site and found Atomz has put supported links of our competitors on our site. RESPECT????? I think not, I would rather have been warned that we needed to locate an alternative. I have no idea how long this has been on our site or how many customers of ours have gone elsewhere. Lawsuit sounds good.

Pip Wilson
October 5, 2005 12:53 AM

This is an old post that I'm commenting on, but I only found it just now, via Google, so please excuse but I had to express my view and thanks. I'm one happy free customer of Atomz. Not only do I get an A-1 search feature on my big website, but even in 2005 I have had Support requests answered within one day. I'm very impressed, and grateful for the customizable search pages on my site.

Dave Barnes
August 28, 2009 3:36 PM

This is an old post that I’m commenting on, but I only found it just now, via Google. I was one of Atomz first customers way back when. I had a dozen paying accounts with them. One day, I went to upgrade a customer from $75/mo to a higher level and found out that it would $1250/month. Yikes. Atomz basically told me to go away. So, I did. Now, I have 20+ paying accounts with FreeFind and am very satisfied with their service. And, I see that Atomz has changed their strategy again and offers low-cost service directly in competition with FreeFind. I guess that "large enterprise only" thing did not work out.

Your comments:

Text only, no HTML. URLs will automatically be converted to links. Your email address is required, but it will not be displayed on the site.

Name:

Not your company or your SEO link. Comments without a real name will be deleted as spam.

Email: (not displayed)

If you don't feel comfortable giving me your real email address, don't expect me to feel comfortable publishing your comment.

Website (optional):

Follow me on Twitter

Best Of

  • Google on the desktop Google picks up Picasa, giving them an important foothold on people's PCs.
  • The importance of being good Starbucks is pulling CD burning stations from their stores. That says something interesting about their brand.
  • Lock-in is bad T-Mobile thinks they'll get new Hotspot customers with exclusive content and locked-in devices.
  • Newly Digital Newly Digital is an experimental writing project. I've asked 11 people to write about their early experiences with computing technology and post their essays on their weblogs. So go read, enjoy, and then contribute. This collection is open to you. Write up your own story, and then let the world know about it.
  • Rounded corners in CSS There lots of ways to create rounded corners with CSS, but they always require lots of complex HTML and CSS. This is simpler.
  • More of the best »

Recently Read

Get More

Subscribe | Archives

13

Recently

My Travel Coffee Setup (Jan 20)
What my travel coffee brewing setup looks like, and how you can build your own for under $100.
Turkey Legs (May 30)
Product naming gone awry.
Speaking for Geeks: Your Slides (Dec 17)
Tips and tricks for creating great slides.
Speaking for Geeks: Writing Your Talk (Dec 14)
Don’t wait until the night before the talk to write it. Crazy, I know.
Speaking for Geeks: Tell a Story (Dec 13)
Telling a story keeps your presentation focused, keeps your audience interested, and makes it easier for you to remember your talk.
Speaking for Geeks: Where to speak (Dec 11)
You've got a great idea for a talk. How do you find conferences to submit it to?
Speaking for Geeks: Getting your session accepted (Dec 10)
Your conference speaking submissions are not getting accepted because they're bad. Here's how to make them better.
Speaking for Geeks: What Should I Talk About? (Dec 9)
Don't wait for that conference to come calling before you start planning for it.

Subscribe to this site's feed.

Elsewhere

Tropo
Voice and communications platforms, including Tropo and Phono. Work.
SacStarts
The Sacramento technology startup community.
Pinewood Freak
Pinewood Derby tips and tricks

Contact

Adam Kalsey

Mobile: 916.600.2497

Email: adam AT kalsey.com

AIM or Skype: akalsey

Resume

PGP Key

©1999-2017 Adam Kalsey.
Content management by Movable Type.