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# Pricing worksheet
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# Pricing licensing activation models
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Worksheet for all business stuff related to pricing licensing activation models.
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## ACTIVATION
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The method by which a user starts using your product is called the activation model. i.e. evaluation, trialing etc
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### Free trial
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[helpful info](https://baremetrics.com/blog/saas-pricing-models#free-trial)
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This is the method we use and will continue to use but needs tweaking.
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Right now we have 45 day trial, that's way too long, it ties up resources and prevents any sense of urgency on the part of the customer.
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## PRICING
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(Joyce made two docs one for pricing as well as historical and projected license sales and a doc about payment processing providers both saved in raven project folder devdocs)
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@@ -8,54 +24,53 @@ See the [links below](#new-idea-perpetual-vs-subscription) and read through them
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We're likely leaving a lot of money on the table by not having a subsription saas pricing model and we could potentially do both.
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Two models:
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Perpetual on premise (most expensive up front no recurring revenue, charge for updates and support as required)
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Subscription hosted (We host they pay a flat fee per month / year to get access to latest version)
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Eventually I'm going to want to cash out and sell the business and recurring revenue model is far easier to sell than a perpetual model.
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## Value to Price ratio factors
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### Value to Price ratio factors
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Value to price ration of 10:1 is ideal, means customers feel like they are getting 10 times more than what they pay
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I've never heard anyone say AyaNova is too expensive
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## License types and programs we will offer
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### License types and programs we will offer
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TWO types makes the most sense after considering options:
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### Perpetual
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#### Perpetual
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- Most similar to current v7 but not exactly the same, subscription is broken out separately
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- One time fee, user can use indefinitely
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- self installed, hosted and maintained by customer
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- least profitable for us long term if they don't buy a maint. subscription
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- Without maintenance subscription, eligable for Minor updates only to fix bugs no new features so in other words they buy 8.0.1 they can upgrade to any 8.0.X version release, but not 8.1 as it will be new features added that don't break backward compatibility
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- one-time payment, along with the option of a yearly maintenance fee.
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- This is basically our current model but we allow upgrades for subscribers
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- **HAS CODE IMPLICATIONS** upgrades need to check if allowed based on version number if no maintenance subscription *not* on date of build.
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- TBD - MAJOR RELEASES: not sure yet; if they have an active maintenance subscription can they can upgrade to any newer major releases??
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- If they lapse the subscription they pay a much higher premium but not quite as high as a completely new purchase to reward past loyalty (i.e. maybe 75% or some other % as appropriate of a new purchase or something?)
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- Most similar to current v7 but not exactly the same, subscription is broken out separately
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- One time fee, user can use indefinitely
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- self installed, hosted and maintained by customer
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- least profitable for us long term if they don't buy a maint. subscription
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- Without maintenance subscription, eligable for Minor updates only to fix bugs no new features so in other words they buy 8.0.1 they can upgrade to any 8.0.X version release, but not 8.1 as it will be new features added that don't break backward compatibility
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- one-time payment, along with the option of a yearly maintenance fee.
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- This is basically our current model but we allow upgrades for subscribers
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- **HAS CODE IMPLICATIONS** upgrades need to check if allowed based on version number if no maintenance subscription _not_ on date of build.
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- TBD - MAJOR RELEASES: not sure yet; if they have an active maintenance subscription can they can upgrade to any newer major releases??
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- If they lapse the subscription they pay a much higher premium but not quite as high as a completely new purchase to reward past loyalty (i.e. maybe 75% or some other % as appropriate of a new purchase or something?)
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### Subscription license
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#### Subscription license
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- SAAS, pay month to month to keep using it
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- We host, maintain and always upgrade they don't need to do a thing but use it
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- The subscription model involves recurring payments, typically monthly or yearly. The subscription model can be thought of as “renting” the product instead of “owning” it under the perpetual model.
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- SAAS, pay month to month to keep using it
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- We host, maintain and always upgrade they don't need to do a thing but use it
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- The subscription model involves recurring payments, typically monthly or yearly. The subscription model can be thought of as “renting” the product instead of “owning” it under the perpetual model.
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### SWITCHING
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#### SWITCHING
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We need a formal declaration of how to switch from one to the other models.
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#### Perpetual to subscription
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##### Perpetual to subscription
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they start with perpetual but go fuck it we don't want the hassle anymore so....?
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I'm guessing it's just switching to month to month plans and pricing, nothing special except maybe we offer to move their data for them
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#### Subscription to perpetual
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##### Subscription to perpetual
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We post a guide on how to backup and restore to local
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## Pricing for v8
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### Pricing for v8
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IDEA: figure out average license cost over all sizes of existing license sales, factor _that_ with the 19.4% inflation figure Joyce determined before and make that the average license price??
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For active subscribers the average price paid for licenses was 121.25 so with inflation of 19.4 that would be 144.78.
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@@ -90,7 +105,7 @@ Meaning if use 19.4% inflation figure v8 would be $110.00 for the license and $5
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ACTUAL INFLATION just looked it up is 24% between now and 2016 including the prior months of huge increases, let's just round that up to 25% because inflation is still on the up trend so:
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Taking the average v7 license plus 90 days v7 average sub cost is $92.20 + 25% = $115.25 1 tech + 90 days support in 2022 prices and yearly afterwards is $54.60 average per tech subscription (not factored tiers in yet)
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### New idea perpetual vs subscription
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#### New idea perpetual vs subscription
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There is something to be said for a subscription model even if we don't host it. In this system a "perpetual license" is a one time purchase and comes with no support or maybe a very short window they get to use it forever afterwards. The subscription is a rental service only aka a "term license", if they stop paying it stops working. Separate from hosted AyaNova.
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Businesses like having the option because one is a capital expenditure and one is a operating expense so depending on teh businesses age and status they may favor one over the other.
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@@ -134,14 +149,14 @@ https://www.milnerltd.com/news/software-pricing-strategy-licence-or-perpetual/
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https://www.pricingsolutions.com/pricing-blog/subscription-based-software-pricing-how-to-migrate-customers-from-a-perpetual-to-a-subscription-model/
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https://www.linkedin.com/pulse/basic-differences-between-saas-subscription-perpetual-frederic-hanika
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### Self installed
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#### Self installed
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- $189.00 per technician
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- inital purchase includes 90 days support and updates
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- No discounts for bulk, same price, there is a discount for bulk support and updates though
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- Existing users can purchase add-on techs as needed for this price, no discount since they already have the license via their existing support and updates
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### Hosted
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#### Hosted
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Hosting is a later thing, concentrating on self installed for now but here are some initial thoughts on it
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@@ -151,15 +166,15 @@ Hosting is a later thing, concentrating on self installed for now but here are s
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- will be priced by active user NOT by tech alone as it must account for extra work load on our rented servers we need to pay for
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- Must have monthly and yearly pricing that factors in the payment processor per-transaction charge (e.g. shareit 2.95 per transaction fee plus extra accounting hassle at our end)
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#### Existing active subscriber users
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##### Existing active subscriber users
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For the software license part, there is no affect on active subscribers unless they need to add an addition license as we are giving them the v8 tech license at no extra cost with their subscription
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#### Lapsed AyaNova users
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##### Lapsed AyaNova users
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They purchase as though brand new, the bonus for them is we will ensure they can migrate to v8 via whatever path necessary
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## New license and sales scheme
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### New license and sales scheme
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PRICING AND PLANS THIS IS OFFICIAL HERE REPLACES ANYTHING WRITTEN ANYWHERE ELSE 2022-08-04 17:25:37
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@@ -187,23 +202,22 @@ behind the scenes rockfish will provide options to ayanova.com pricing page for
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If a coupon is required then it can calculate the discount but will say click here to request your coupon at which time we (I) will make the coupon manually
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We need that ultimately prorated price for new subscription if moving tiers.
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### Summary of Joyce's pricing work
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#### Summary of Joyce's pricing work
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See source document
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Joyce did the work and figured out the inflation values etc.
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#### HOSTED SAAS SERVICE
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##### HOSTED SAAS SERVICE
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Competitors Hosted usually includes _all_ users, not just techs and I can see why since it affects traffic and usage considerably
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bills per month and we get dinged 4% plus a 2.95 fee each transaction so need to increase considerably the price over a yearly charge
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When it comes time to do this I will need to revamp the AyaNova license code to count all active users, not just service techs and it will need to be cheaper as we want to keep it simple, can view competitor pricing in her doc 20220112subscriptionoverview.odt to work that out
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#### SELF INSTALLED
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##### SELF INSTALLED
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Basically Joyce's price for a single license if inflation factored in is 189.00 per license which sounds about right to me, in the past wew've had it as high as 199.00 per license so this is actually a discounted price
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## Joyces email from jan 2022:
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### Joyces email from jan 2022:
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3 Inflation:
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@@ -6,7 +6,10 @@ todo: update post on forum on Thursday, not before trip to vic.
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todo: Licensing changes for SAAS customers, this is huge and I hadn't thought of it before, wording is very different in this case, fuck, need to wing it I guess
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https://flgpartners.com/saas-pivots-transitions-perpetual-to-subscription-saas-models/
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todo: 45 day trial is way too long it means a long sales cycle and if we are hosting then it means tying up resources for far too long
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if they are testing us out they can simply buy a month anyway once the free trial has expired
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It needs to be the shortest possible time it takes to evaluate AyaNova and get an idea if it will work or not so there is urgency and less resources tied up
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10 days maybe?
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todo: CLIENT UI license changes for subscribers around the LICENSE pages and route??
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