Blog

Tweaking Your Pricing Plan

August 15, 2015 by Kevin Custer

Shaving Kit

Typically, you can have a fair amount of success in charging, (to simplify things), $1 a year for 5 years if you know they have $5 from the beginning. With stimulus funding, however, that $5 will not last. Though an initial thought might be to ask for the $5 upfront and hope you can get them to renew in five years, that is not the best strategy because you lose your residual stream of revenue and your chance to build a customer relationship. So instead, consider a pricing plan that asks, for instance, $3.50 upfront and then $.15 for the next four years.

Ultimately, your customers will receive approximately a year free, while you get a considerable amount of money upfront, and the ability to maintain the relationship. Most schools and districts can afford the subsequent $.15 a year, even without stimulus spending, so even though you don't get the full $5, you set yourself up for a more sustainable customer relationship.

 

(Photo credit Barney Bishop on Flickr)

Enter your email to receive Arc's Vectors Newsletter.

Loading...