Sage 100

Planning to go up probably $2,500 on my annual support agreement for off-plan (non-Sage Maintenance) customers. I find they are more problems than they're usually worth and often only use us because it's cheaper than paying maintenance.

That's exactly what I'm thinking Wayne. Or make our minimum KTA price $3,500.

I just added it in and inserted that ""due to Sage policy changes effective 11-1-2011 we will add $2,500 for first year and renewal fees for any customer not active on a Sage maintenance plan

They can either pay Sage or they can pay us. Makes staying on-plan make a lot more sense.

My fear now is that at $5,300 (which would be my lowest cost for someone not on plan with Sage) you're realistically only attracting problems who think they can get $5,300 of support from you....

You could start with a 3 month KTA with the wording that either party can cancel the agreement at any time and that they pay 100% upfront. If they end up being a PITA, refund them a prorated $ amount and wish them good luck. If they want to cancel (because that probably means you're doing a crappy job) then they deserve to get their money back. The short-term KTA also lets you get to know them better and you'll be in a much better position to price a long-term KTA. If they're off-plan, they are telling you upfront that they are very price sensitive. In a way, they're doing you a favor.

John, stupid question but is the 3 month KTA priced at 25% of annual? In Wayne's example $1,325. Or do you overprice the try and buy and adjust cost of next contract accordingly?

Mike, that's a great question. I tend to go high on the try-and-buy because there are more unknowns. As always, pricing is an art and I've found that usually your gut is right (plus follow Wayne's advice and check out their bathroom). There's no right or wrong way to do it. As I've said before, there is nothing wrong with price discrimination. What has value to one customer may have zero value to another. The trick is to figure what each one really does value.