I would have thought some of these things are the first to get the axe.<p>Do we <i>really</i> need to pay $20/month just to have a chatroom? When there are free alternatives out there? When times are good, sure if you like, but when money gets tight, it's probably a contender for getting cut.
What's not discussed is "the increased savings from moving to an open source knockoff of 37 signals' offerings", given that you're not just paying once, but every month.
yeah lately I've been thinking more and more about the benefits of a monthly subscription. People tend to be lazy, so even if they stop using a service, they'll continue paying for it, because they are too lazy to cancel. And $10/month just doesn't seem like that much money to most people, and gets lost in the credit card statement. So you are pretty much guaranteed your revenue, even if you completely stop selling.<p>Compare that to advertising models, where you need to work non-stop just to make sure you sell your ad-space to cover your next month's bills. Or one time fee models(sales/commission), where once again, you need to make sure you continue being on top of the food chain, to make those new sales every single month.<p>The good thing about monthly billing, is that you tend to keep those customers for a long ass time. So pretty much all you need is time to grow to profitability.<p>So you can have a very mediocre acquisition rate(lets say 5 new users per day), after a year of sales(@ $10/mo), you are already making $18,250 a month. And since you get paid month-in, month-out, you can spend a ton of money on advertising to continue growing. Because you have a fixed income.
Maybe they're just talking about web-based software but it seems the most popular model in the enterprise space is one-off pay up front, pay for upgrades and pay for support.
Although it may work well once I'm signed up, personally I am about 10 times more reluctant to sign up for a monthly subscription in the first place. I don't like that the price might change for month to month and I don't like that if something goes wrong with billing that it might cause the service to stop working (and if they have my data and it might get deleted while I'm on holiday then that's particularly bad). And finally unless I plan to only use it for a short time, it is nearly always very expensive compared to a one off purchase.<p>So - if you want me to actually buy your software - make the pricing as simple and transparent as possible and make it either annual or one time purchase.
How would you feel / how would the conversation change if, for instance:<p>- the $10 / mo charge came with a one-time, upfront cost of $24.99?<p>- what if that upfront cost is $14.99?<p>Any difference?