Sale Strategy

Mon Apr 9 21:06:18 PDT 2018

Mark,

I like your analysis of costing.

Also keep in mind that many users are getting used to paying a subscription fee.  They now pay for a subscription to anti-virus updates and fin many cases for cloud storage.  As this generation grows up and moves into the working world, as business people they will not think twice about being charged a monthly or even a yearly fee for software.

I did have a client who could not afford to upgrade his filePro and add the functionality he requested.  He decided that he could use Word to write out detailed packing and shipping instructions for his contracts when they exceeded the program limits my program provided.  

I have found over the years that good service brings in repeat business - think both software and hardware upgrades as well as strong recommendations.  This is how I grew my business, "Word of Mouth"

Also, unless you have access to the P&L statement of a client, you really can't know if they can afford an upgrade at any price.  Too many very large companies have gone out of business over the past 10-20 years. 

I look at the Medical industry and they are being squeezed on all sides.  However, they think nothing of spending hundreds of thousands of dollars on software the CFO thinks  will save them money in the long run.  Only that person never consulted with the people who actually have to use the software.  The after a year or so, the latest and greatest is replaced by a new software application.  These are business that have their pricing controlled by others.

The issue many developers are faced with is competition.  Many are afraid that if their quote is too high they will not get the contract.  This will happen no matter if the pricing is a fixed price or a subscription model.

I have gotten two of my large clients to upgrade by using the subscription model.  This keeps their initial cash outlay low and has allowed me to charge for implementing some of the functionality included with the upgrade.

The key may be to offer both.  With my textile brokers I offered a software maintenance contract which included 1 or 2 hours of programming.  These hours accumulated over the course of a year but the hours expired at the end of the contract.  The contract price was paid monthly. Usually after one or two years most preferred to pay a per-diem rate which included a minimum 4 hour fee.  They usually felt that it cost them less. 

With regards to Adobe Creative Cloud,  The software is actually downloaded to your computer but you get updates as long as you are paying for the subscription.  The software is not deleted when subscription is not renewed.  This is not like Microsoft's Action Pack where the agreement states that you will stop using the software and return any disks that contains the installation programs or delete the install programs.  However the cost for the action Pack subscription is low and well worth the price if you lives in a Microsoft environment.  Not however, this is a subscription service which allows for downloading a lot of Microsoft programs at a cost less than one would pay for any single application.  Of course they have the volume of business that allows them to do this.  Fp tech doesn't.

Richard

> -----Original Message-----
> From: Filepro-list [mailto:filepro-list-
> bounces+rkreiss=verizon.net at lists.celestial.com] On Behalf Of Fairlight via
> Filepro-list
> Sent: Friday, April 6, 2018 2:15 PM
> To: filepro-list at lists.celestial.com
> Subject: Re: Sale Strategy
> 
> That's not the industry trend, though.
> 
> Look at -any- of the RAD kits for mobile apps.  From LiveCode to...well, any of
> them.  I've searched extensively, and anything worth having is now a
> subscription model.  As long as you're making money off of their engine, they
> get a cut in some way, shape, or form.
> 
> The software industry as a whole seems to be going in that direction.  When I
> consider the credit card processing gateway integration scenario, I have to say I
> don't disagree with it.  Why should we as developers get one small turn at the
> revenue trough, when the profit is ongoing indefinitely and continuously for the
> customer?  I don't even consider that greed; I consider it striving for equity.
> Doubly so when I conscientiously write my software to be ultra-stable, so that
> I'm not in having to patch it every other week or month like a lot of vendors do.
> It's usually one-and-done, but why should my revenue stream from that project
> end when the customers'
> continues indefinitely?  And who runs a business and doesn't want to maximise
> ROI?  That's all moving to the subscription model as a developer is, is maximising
> and extending the ROI.
> 
> In the case of runtimes, it -is- more like royalties than a CD or book, because
> new licenses need to be instantiated for each runtime seat.  It's more like
> covering a song, and needing to pay the original artist royalties every time you
> perform it at a new venue.  It's not handing down the original license at all.
> 
> In the case of simple software, often with transferrable licenses (let's take
> Cubase as an example), then yeah, it's more like a physical good.
> 
> Now, what I -do- think is bullshit is charging someone to transfer their license
> between OSes at the same version.  That's always been a questionable practise.
> That's almost as bad as charging $25-50 for a character name change in an
> MMORPG.  (Yes, companies do that.)
> 
> m->
> 
> 
> On Fri, Apr 06, 2018 at 01:56:18PM -0400, Brian K. White thus spoke:
> > I accidentally sent to both you and the list, but the list never got
> > to see the original, including why I equate filepro with a hammer in
> > at least some cases, IE, users who aren't actually getting any new
> > value after the initial purchase, in the form of bugfixes or service
> > or new features. It IS like music, like a CD. I can play a CD or read
> > a book as many times as I want and hand it down for generations and
> > make all the backup copies I want, and none of that is in any way
> > committing any form of theft from the artist or performer or
> > distributor.
> >
> > --
> > bkw
> >
> >
> > On 04/06/2018 01:00 PM, Fairlight via Filepro-list wrote:
> > >On Fri, Apr 06, 2018 at 12:47:29PM -0400, Brian K. White thus spoke:
> > >>>Point out the fact that they're -still- making out like bandits,
> > >>>and they have been for 36 years.  Have they been paying a lease on
> > >>>that software for three and a half decades?  No?  Then they're making out
> like bandits.
> > >>
> > >>When my grandfather bought a hammer in 1920, and I still have it
> > >>today, we aren't bandits who deprived the hammer manufacturer of
> > >>livelihoods.
> > >
> > >There's a difference, though.  A hammer is a physical good.  IP is
> > >entirely another creature.  I chose the music recording industry as a
> > >baseline comparison for a reason:  royalties are a legitimate revenue stream.
> > >
> > >>I don't cry for poor filepro at all. The only reason we still use it
> > >
> > >Nor I, per se.  I'm just saying that if it's truly a viable market
> > >model (and Adobe, East/West, Microsoft, and several other notables
> > >seem to indicate that it is), then anyone should be able to do it.
> > >To -not- do it is to get burned.  If I'm going to say I should be
> > >able to do it, then I have to be able to say fP Tech should be able to do it.
> > >
> > >>is not because it's so awesome nothing else can do the job thus
> > >>proving it's value. At this point every single seat license is pure
> > >>duress. All the years of code investment are utterly unportable to
> > >>anything else, and so there is no way to continue using your OWN
> > >>code that you wrote yourself, without paying filepro, and the
> > >>process of migrating is essentially 100% loss starting over, which
> > >>means it takes a long time, which means you have to keep paying
> > >>filepro for a long time after you no longer actually want their
> > >>product. It's the worst example of a trap. It's the poster child for
> > >>why it's worth paying twice, three, ten times as much in development
> > >>costs to invest in "free" software, just to avoid this trap.
> > >
> > >The runtime license cost does make a bitter pill.  I could fully see
> > >the development licenses going subscription, but move to a freely
> > >available runtime like dBase did (and I think Filemaker Pro does,
> > >although I'd have to look it up).
> > >
> > >That said, if you look at it in a certain light, knowing you're
> > >getting zero percent ongoing return from something which is driving
> > >90%+ of someone's very lucrative enterprise is also a bitter pill.
> > >That applies to my own software, or any developer who writes enterprise-
> grade software.
> > >
> > >m->
> > >
> >
> >
> 
> --
> Audio panton, cogito singularis.
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