"How to Loose Subscribers and Maintain Revenues," by PTC

During yesterday's conference call with financial analysts, PTC executives took this question from Richard Davis of Needham & Co:

This is a little bit of a tactical question, but Harley Davidson has layoffs, John Deere has layoffs, and you have one-year renewals. How do you keep [maintenance subscription revenue] when these come up for renewal, and your customers have fewer employees?

That's easy, says PTC ceo Richard Harrison. Just charge them more:

Let us say a company has a 1,000 users. That justifies a 30% discount. If they come back at renewal time and say, "We want to only renew 700," we're going to look at our sheet and  say, "Okay, at 700 users you only get a 20% discount." And so we end up netting about the same amount.

But it also helps to have empathy:

We also had some creative stealth campaigns where we are empathetic to customer situations. We don't want to feel like we won't listen and we're not in partnership. I know we have had a couple of situations on the Pro/E side where people wanted to reduce the licenses and we ended up keeping our price pretty much the same.

Source.

Comments

[Sid]

Reducing discounts (ptc) or increasing the price (adobe) seems to be the two favourable ways of milking more from less.

by the way, since almost everybody is offering 0% financing, do they offer financing for maintenance for large accounts?

Maintenance revenue, if annual, cannot be realized in one shot, if my accounting knowledge is correct.

[Steve Johnson]

Loose?

[Gerry Champoux]

Cancel your maintenance renewal and watch what happens. Your PTC rep will suddenly "discover" that you qualify for a new discount program.