Michael, Why not offer him a discount off the next year support if he doesn't use up the support this year:
Example: $1000 for the yearly contract up to a maximum of say 10 hours - actually quote him your hourly rate for emergency call out. At the end of the year give him a reduction next year in monetary value of 40% of whatever support he hasn't used this year. He can then opt to take the discount or use your services for an equivalent amount of time equal to the 40% in monetary value for say a systems audit or discussion of the "next phase". This means you get paid an amount and the customer doesn't see the payment as "wasted" in that he feels he is getting something for nothing. I used to use this approach when I was self employed and the customers seemed to like it. Also, it makes them think about how to use your expertise in progressing their business which they wouldn't have done otherwise. Also, it means that they don't want to cancel the next yearly contract for fear of losing the accrued discount! Obviously, I have only used the figures as an example and you can pitch them where you feel is appropriate. Dave Crozier -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of MB Software Solutions General Account Sent: 21 July 2008 16:37 To: ProFox Email List Subject: [NF] Yearly maintenance fees/support versus maintenance billing bythe hour A client has been using FabMate Lite for 5 years without any further expense than the initial software. It's been "courtesy" hours in the past 5 years, and probably not even 10 hours per year. He calls me on Saturday and says they can't get into the program now. I'm virtually certain it's not my problem, as nothing has changed in years. However, I told him that I can't offer him free support any more. I'm now giving away the FabMate Lite software for FREE and only charging for an annual maintenance/support contract should they choose to be supported. (If it works for them "as is", then by all means that's fine too and free for them.) So I basically told this client (who really hasn't paid anything to MBSS since Fall 2003 other than a few hundred for something the db guy did to screw up some files) that he'd need to buy a support contract. He doesn't want to, and just wants to pay the hourly support rate. How would you respond to this guy? I'd really like to get those yearly support contracts (for approx. $1200/year), but this guy doesn't want to spend anything, and while I understand his point (...that he'd rather pay $150/hr for 7 hours per year than $1200/year as he's still ahead then in numbers), I want to make a smart business decision here to help drive revenue for FabMate Lite support (which is the only revenue stream for that product now). Your advice appreciated! tia, --Michael [excessive quoting removed by server] _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[EMAIL PROTECTED] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
