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.