[AccessD] Client Payment Methods

Dan Waters dwaters at usinternet.com
Sat Apr 23 12:11:51 CDT 2005


Gregg,

Do you have an approximate ratio between the 'lump sum' payment and the
monthly payment?

Dan Waters


-----Original Message-----
From: accessd-bounces at databaseadvisors.com
[mailto:accessd-bounces at databaseadvisors.com] On Behalf Of Gregg
Sent: Saturday, April 23, 2005 11:32 AM
To: Access Developers discussion and problem solving
Subject: Re: [AccessD] Client Payment Methods

It's a very good idea.  Removes most of the sales objections. Allows the
customer to kind of try before they spend a lot. Makes the purchasing
decision nearly a no-brainer.

The only downside I can see is if their expectations are far different that
what your software delivers, you will either have to make modifications
quickly and essentially for free or they will be tempted to shop around for
another solution.

I have done something similar.  Our software is totally custom for each
customer so our end product is almost all programming by the hour.  This
year I was able to convert 4 long-term customers to a regular monthly
billing. We still track hours and make adjustments when necessary but now I
can count on a regular monthly check.  It's been good. 

Also, I have noticed a change in their mindset about asking for additions
and enhancements.  In the past there were mini approval processes where they
would get an estimate of our labor before proceeding.  Now, I guess because
of the monthly payments, they tend to think of it as a maintenance contract
(where requests are seemingly free) even though I have been very clear that
it is not.  Now, from their perspective its a budgeted, yearly commitment
(once-a-year decision) even though they are free to get out at any time.  
  ----- Original Message ----- 
  From: Dan Waters<mailto:dwaters at usinternet.com> 
  To: Database Advisors<mailto:accessd at databaseadvisors.com> 
  Sent: Saturday, April 23, 2005 10:18 AM
  Subject: [AccessD] Client Payment Methods


  To All,

   

  Yesterday I had a business planning meeting with an advisor.  He brought
up
  the idea of asking my clients to pay me on a monthly basis - the concept
is
  that they would pay me a portion of the ongoing value they get from my
  services.  (By the way, this is not a maintenance fee.)

   

  This sounds quite attractive.  My customers might skip a major budget
  discussion (often lasting several months) and quickly get started.  They
  have a low risk because they could discontinue whenever they want, which
is
  actually a good business position.  On my side I would be a little shocked
  if they did discontinue because no one would really want to go back to the
  old way of doing business.  

   

  I'm thinking that I would ask for a monthly amount of 1/36 of what I would
  have asked for to 'sell' a module.  The monthly payment would of course
  continue after the 3-year period.  This gives me a long-term regular
income
  stream, and allows my customer to make small monthly payments which might
be
  easier to get into.

   

  Does anyone provide software under similar terms?  Or, does anyone use
  software under similar terms?  What are your thoughts on this payment
  method?

   

   

  Dan Waters

   

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