By West McDonald, Vice President of Business Development, Print Audit & Owner, FocusMPS
As a consultant and trainer, one of the most common questions I get asked is “What is the best way to sell software?” Usually I’m being asked this question because one of my clients is having a hard time competing against competitive software solutions. My usual response: Stop selling software. It’s not the answer you’d expect, but hear me out: There are far better ways to make money with software other than selling it as a sku.
Let’s look at two ways to provide software solutions (followed by a third one which is my favorite):
1. Outright sale plus annual maintenance: Traditional software selling looks a little like this: You assess the customer’s needs, come up with a configuration that works, then try to sell it. It’s a “widgets” model that has been around since commodity money began to replace the bartering system around 700 BC.
- Benefits:
- Money up front: You get paid up front and can pay on commissions with little risk.
- Additional revenue every year: In the form of maintenance fees, anywhere from 15% to 25% of the original selling price.
- Negatives: read the rest here