How a Free Product Builds Customer Loyalty

05/07/2015 02:00 pm ET | Updated May 07, 2016

In 2009 I was running a small web services business in Paris when I decided to take a chance by shifting away from services to a software model. Within a month, my software -- which allowed users to set up their own online stores -- had been downloaded thousands of times, and I knew I was on to something. Today, PrestaShop boasts 230,000 users around the world in 165 countries, and our users have sold over $15 billion worth of products online.

What's the strangest part? Our software is completely free and open-source, which means that not only have we managed to build a profitable company based on a free product, we've also built a community of about 800,000 users around the world who actively contribute to improving our open-source code. At any given moment, around 2000 people are volunteering their time to improve our platform.

Here's what I've learned about earning customer loyalty through my experience building and monetizing the PrestaShop platform:

Monetize Indirectly

We don't charge users to launch a store on our platform or take a percentage of sales. Instead, we make money when users pay for additional features to improve their store, either from PrestaShop directly or one of the many vendors who also operate on our platform.

This means that our profit depends on our customers being satisfied enough with the software to want to invest money into it, and on vendors being confident enough in the platform to build products with it. By giving it away for free, we're helping customers to feel like they're part of a community, not just sources of revenue.

The massive size of our open source community is a testament to the dedication that our users feel towards the platform's continuous improvement.

Democratize Decision-Making

When you're asking customers to dedicate their time to improving your product, it's critical that they feel they have a say in the direction of the product. We accomplish this in a couple of ways.

One is by making our plans for the software open to the community. We try and be as clear as possible in establishing our roadmap for the project, and ensure its continuity through constant reinvestment.

We also issue a monthly survey in which all users and community participants can make their opinions known on proposed changes to the software, leading to democratic decision-making on the issues and features that are most critical to the community.

Speaking of community, I believe that a community has to be united by more than a common goal -- there must be a common identity. To that end, we host user meetups all around the world so that users, who otherwise remain faceless, can truly connect on a personal level with other individuals who are as actively engaged in the project as they are.

Practice What You Preach

As the company's CEO and Founder, I believe that the company's spirit of openness and community starts with me. I have made it a personal goal to connect personally with as many users, big and small, as possible.

I have met merchants at the Grand Canyon, in Alaska, and across the world. Hearing stories of how these small merchants have been able to reach a global audience for their products completely validates my belief in what we're doing as a company.

I think that by working hard to reach users personally, wherever they are, helps to set an example that no one in our community is more important than the community itself.

The overarching effect of all the efforts I mentioned above is that our users are of equal value to the company, regardless of size. I see our customers as valuable collaborators and sources of inspiration long before I think of them as sources of revenue.

Whether your product is free or not, I believe that giving customers the power of self-determination and instilling them with a sense of community can go a very long way towards building long-term loyalty.