Sent by Jonathan Stark on July 17th, 2017
Long time reader Mauro Chojrin and I had an email conversation recently about selling maintenance packages.
Here’s the thread (shared with permission). Enjoy!
Mauro: Hi Jonathan! I’m wondering about how you’d handle a situation such as the following: when you sell someone an app/website, do you offer any kind of maintenance package with it? I can offer the client some sort of 100% done-for-you package (they pay me to build the thing and then a monthly fee to keep it alive, optimized, updated, etc…) or I can offer something more “turn-key” (they get the code and documentation on how to install and configure it so someone else can take it from there). I’m not sure how to distribute the outputs in order not to end up with a rather complex matrix (They can choose from different set of features, different delivery options and different maintenance plans…). What would you suggest? Jonathan: I’d price the initial project really high (prolly double the price of any other quotes they’ll get), but include a 12 month bug-fix guarantee (i.e., all fixes free for the first 12 months). After the 12 months, I’d recommend a cheaper provider for ongoing maintenance. There’s no profit in maintenance (unless it’s your primary business or you’re selling enterprise software). Mauro: Interesting. Why do you think there’s no profit in maintenance? I believe it can be a source of recurring revenue for a very low labor. For instance I have a client to whom I sold a plan to keep his website up always, have his backups taken care of and do some periodic cleansing of old files in order not to have the hd explode on him. All of this is fully automated, so it’s almost free money for me (Almost because I couldn’t set up the recurring payment yet, so I have to manually collect every 3 months). Besides, by “being there” I think I have a better chance of discovering new projects, don’t you? Jonathan: It’s janitorial work. Nothing against janitors, but it’s just not typically considered high value or highly differentiated work. Mauro: This is something I hadn’t thought about (probably because of where I am in this freelance journey)… Interesting point. I guess you don’t agree with Brennan Dunn’s article on retainers (tldr: optimize/secure/train on a monthly basis). Jonathan: I like some parts of Brennan’s piece. It’s probably a good first step for someone on their way to pure advisory retainers. There are a number of aspects to what he recommends that I like, like the monthly CEO report and the monthly advisory calls. I disagree with things like “10-hours per month of ala carte updates to the website”. Mauro: I agree. I totally get that the pure advisory retainer is the end goal… I just don’t feel ready to offer it exclusively (Probably some imposter syndrome or something). On my latest proposal I put it as part of the maintenance plan… let’s see how it goes :) I agree with you on the inconvenience of X hours a month for whatever-you-want… that has backfired on me a couple of times, learned my lesson. What I do offer are very specific results/guarantees (uptime for instance) which allow me to subcontract, automate or even work towards achieving those in a more efficient way… I think this conversation could be beneficial to some other folks on your list, don’t you? Jonathan: Yeah, it’d be good to share it if that’s okay with you (I always like to ask first just in case) :) Mauro: Sure!
Have you had a different experience with offering maintenance packages? Hit reply and let me know how you handled it. I’d love to share tips with the list to help folks who are in the transition. Thanks!