[AccessD] Client Payment Methods

Not really.  Most of our customers had spent a consistent amount for the last few years.  We took that amount and divided by 12.  We tend to market ourselves as a service company that provides Access programming, consulting, web solutions and system management.  

We did do one project where the customer was paying a monthly fee for a competitor's web solution that didn't do all he wanted to do.  We replicated the solution in Access and also hosted his application.  The customer switched the monthly fee to us and I would say it was about a 12 month payout.

But it doesn't really matter unless your front end labor is going to far exceed your cash flow.  If you're only getting say a third of you real labor paid back in the first 3 months you're going to be eating less and sleeping less.
  ----- Original Message ----- 
  From: Dan Waters<mailto:dwaters at usinternet.com> 
  To: 'Access Developers discussion and problem solving'<mailto:accessd at databaseadvisors.com> 
  Sent: Saturday, April 23, 2005 12:11 PM
  Subject: RE: [AccessD] Client Payment Methods


  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>
  [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<mailto:dwaters at usinternet.com>> 
    To: Database Advisors<mailto:accessd at databaseadvisors.com<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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