

Free lifetime software upgrades are bad for customers - aepstein
http://formisfunction.posterous.com/free-lifetime-software-upgrades-are-bad-for-c

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dangrossman
Good advice for one-man shops. I was in the same situation and came to the
same conclusion. Sold ~$200,000 in licenses to my software before sales
started slowing down. I promised free lifetime upgrades so lost motivation to
do a major new version:

1) I couldn't sell it to my existing customers, they're getting it free

2) Many of the existing customers came from a handful of niche websites where
the product/audience fit was great, but their audiences are only so large so
I've already sold version 1 (with the free upgrade) to most of them

Eventually I put the product up for sale on Flippa and took $90,000... which
if I stopped development is probably all I would have earned over a longer
period.

Plus, it's a long term capital gain, so I'll end up paying less tax on the
sale versus earning it over time as ordinary income.

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geoffc
This is why the Saas model works so well. Churn rate is everything in a
subscription business so your motives are closely aligned with your customers.
You continually improve the software to keep the customers happy and the churn
rate low.

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eekfuh
I am going through this problem right now.

I told customers the price and it would not move and all updates will be free,
however I am about to release the second version of the product.

It is significantly more stable, faster, more features, better designed, and
one of the best applications I've ever made.

I want to recoup the time spent on it, not to mention my sales from v1 have
started to drop and I want to bump that up again. Maybe I'll release it as
version 2 for pay but initially at a discount? I do not know. Suggestions?

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aepstein
Here's an idea: release a scaled back version of your new v2 as a free
upgrade, and then take the full version with a majority of the extra goodies
they're going to want and put it out as a separate product. Then, give
existing customers a 30-50% discount off the "new product".

Release both the free upgrade and the new product at the same time, so they'll
feel like they're getting something for free, as well as a discount to grab
the new product.

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obsaysditto
Valid point but should all upgrades be non-free? The most notorious free
upgrade systems are the open source communities. They are mostly back by a
company (eg Canonical, Red Hat) with paid developers, but take for example
RHEL, who benefits immensely from the open source version Fedora where the
community of non-paid developers have a passion for the project.

I guess if you have passion, does the amount of money matter?

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chadgeidel
Give me free "point releases" or maintainence releases. Make a "named" release
a big deal with significant upgrades so I feel good about spending more money.

