Given the turbulent economy in the US more and more companies will turn to their license agreements, or Support and Maintenance agreements to shore up incoming revenue. These agreements, for a percentage of the original purchase, and new ongoing licenses will give the customer access to the support services and guarantee free upgrades to the next version of the product. When the product is evolving at a nice pace and value add features and fixes are making in into the public stream quickly there is great value to these programs, however one has to question their validity when;
- Support is primarily derived from the partner and not the vendor where there seems to be no perceived value for that part of the agreement
- For the life of the agreement no discernable additions to the product have been made
If your model is built on the M&S premise then it makes complete sense to not only focus on the new customer acquisition but also existing customer retention and continue to deliver a compelling reason for them to continue to use and pay for the software in both the good and bad times.