March 14, 2017
Monthly support contract vs unconditional bug-fix guarantee
One more email about guarantees and I’ll drop it for a while :)
Imagine these two scenarios:
- A client asks you for a quote on a custom software project. You give them a price of $10,000 and plan to try to sell them a monthly support contract for $300/mo once the project is complete. If they accept both, you’ll gross $13,600 in the first year.
- A client asks you for a quote on a custom software project. You quote them a price of $25,000 for the project, backed by your 12 month unconditional bug-fix guarantee. If they accept, you’ll gross $25,000 in the first year.
Questions:
- Which scenario do you think would be easier to sell?
- Which scenario would be more profitable for you?
- Which scenario would be less work for you?
- Which scenario would be easier to administer for both parties?
- Which scenario would better differentiate you from your competition?
- Which scenario would be more likely to deepen your relationship with the client?
My answer to each of these questions is 2.
What’s yours?
—J