4 ms·
But with all those things, beware of the recurring expense problem: I would agree with all those cliffs, for one-time expenses. As soon as payments are recurri
by corty 6y ago
But with all those things, beware of the recurring expense problem: I would agree with all those cliffs, for one-time expenses.
As soon as payments are recurring, things will be more complicated: Being bound to a contract beyond the current year is often subject to approval, at least when recurring payments are involved. Not yet paid but binding future obligations have to occur in various reports and need accounting involvement. Better have short contracts with autoextension or at least the possibility to pay up front for a fixed term.
- cutemonster 6y ago> Better have short contracts with autoextends Does that mean monthly recurring payments? Or is that too short? did you mean yearly? > the possibility to pay up front for a fixed term What's a good fixed term, maybe one year? Or a few years?
- corty 6y ago> Does that mean monthly recurring payments? Usually yearly should be fine, however, monthly would reduce customer anxiety (not sure if thats very relevant for B2B) but increase possible administrative overhead on your side. > What's a good fixed term, maybe one year? Or a few years? Longer than your usual recurring term. I'd say 2 to 5 years. The right term depends on the overall cost of that package: you should price them below the next-higher aforementioned cliff of course. If you usually offer yearly $20 contracts, and you have determined a typical cliff to be at $50, you could offer a 3year package for $49. Also consider other factors: you might not want to support a version for the whole fixed term. And you definitely don't want to sell anything perpetual or semi-perpetual.
- cutemonster 6y agoThanks for the help