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Appdirect.com is working on something similar. From my experience with cloud marketplaces there is still a high cost to support onboarding unsophisticated SMBs
by nickfromseattle 11y ago
Appdirect.com is working on something similar. From my experience with cloud marketplaces there is still a high cost to support onboarding unsophisticated SMBs post-sale - this includes initial setup / integration, migrating from legacy platforms, end-user training, etc.
SMBs are price sensitive, so charging what it costs you to deliver this will decrease adoption and subsidizing this cost can take too long to recoup.
A good example of this is Office 365. Let's say your profit margins are $2/user/month and you spend 3 hours onboarding a new 10 seat customer at a cost to you of $1/minute on the phone. It will take you 9 months to recoup your onboarding cost ($180 in cost / $20/profit/month).
Self service adoption can be possible depending on the product if there is no need for integration or legacy data migration, however products that require these activities see a high rate of drop off in the self-service channel because SMBs often times aren't sophisticated enough to solve these challenges themselves, don't use the service and churn out after a couple of months.
Additionally, if the customer has a poor onboarding experience with the first product they've purchased you lose their trust and it makes it very hard to cross sell and upsell other services.