Gil Hale RR wrote: > I do not sell annual or other maintenance plans, and avoid that kind of > terminology like the plague. It makes it too easy for folks to unplug a > nice revenue stream. I do not sell my software solutions either. I provide > "maintenance" (support) on a No Additional Charge basis! What the hell? > Read on... > > I license my software solutions with an initial setup/config fee which is > minimal - really minimal. Sometimes no initial fees at all. Then I charge > a reasonable monthly license fee, where over the course of a few years I > recoup what I would have gained with an initial full fee for a single pay > billing. But, for the remaining months/years I keep receiving these monthly > payments for a client having the right to keep using my software, and > gaining income benefit far in excess of its monthly license fee. I also > provide support/maintenance on a No Additional Charge basis for clients > paying me a monthly recurring fee. I can come in very inexpensively for my > clients with respect to how their cash flow gets hit, and in the longer run > I end up generating far more revenue from my offerings. For instance, I > have one client who has been paying me $1,000 per month for 43 dealerships > to use my software (very inexpensive on a per store basis). They have been > with me since 2001, just about 8 years, 96 months. Do the math. I could > never have charged them that kind of money for that solution, despite it > being well worth the investment. This kind of arrangement makes my software > cost effective on both a monthly cash flow and a return on investment basis > for my clients. And it gives me monthly incentive to keep doing the best > possible job I can for them. When they request upgrades or consulting I > handle those items on a no additional charge basis, whether it is directly > related to my solution or not. For all the months I have had to do nothing > for the income as they keep on using it internally with their own personnel, > a few weeks here and there for special projects is fine with me <g>. The > name of the game now-a-days, more than ever before, is client retention and > revenue stream protection. This is how I am accomplishing it, providing > excellent solutions for beyond reasonable pricing, and not trying to nickel > and dime a client at every turn. I get my recurring revenue stream from > multiple clients, they get my attention whenever they need anything extra - > plus make and/or save money using my software in excess of the revenue they > provide me. If they begin to clip services in a tough economy I am betting > I will be the last vendor standing as I not only make them money, I ask for > relatively little in return. But when I sum the income from all clients > each month I find I am doing just fine, without having to chase the next > dollar while needing to ignore my current clients in the process. > > Of course, one can't simply flip a switch and migrate to this kind of model > unless there is enough cash on hand to survive the initial lean months as a > core client base is built. I was lucky in being able to bide my time as I > built my business around this model. I know another FoxHead who chimes in > once in a while in ProFox who has begun to adopt this kind of business > model. He has a full time (or more <g>) job, and can afford (from what I > can tell) to take his time in building up his client base on the recurring > fee and minimal initial charge business model. If he continues to do an > excellent job for his clients, and he grows his business a bit at a time, > keeps his overhead low (work out of the house), his "side income" may well > exceed his employment income in time. Other folks may have a spouse whose > income can help with the reduced income as one transitions from full up > front billing to a smaller initial billing with recurring fee billing model. > For others yet it may have to be a matter of offering the smaller initial > fee with recurring fees on a situational basis for some offerings, but not > all. > > It is not for everyone, but from where I stand this is the ultimate win-win > for myself and my clients. > > My two cents...
That's where I'd like to take my offerings, too. No (or low) cost up front, then host the data on my servers for them. If they want out, then I create an export data file for them (...should be very easy) and that's it. BUT, my concern is the way I've built software---rock solid. This one client is the perfect example--it works great, they need no changes, so they don't want to pay anything more for the software. The key to driving home your ideal solution is to make it clear that they are paying for the LICENSE to use the software. If your client wants to stop, Gil, do you give them the data? Otherwise, the question becomes: "who owns the data?" By hosting the data on my servers and just giving them a license, I think that entitles ownership (somewhat) to me, but of course many client-side advocates would argue otherwise. -- Mike Babcock, MCP MB Software Solutions, LLC President, Chief Software Architect http://mbsoftwaresolutions.com http://fabmate.com twitter: mbabcock16 _______________________________________________ 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.
