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Your Thoughts On The "lifetime License" Business Model?


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Are you giving your customers the option of a lifetime license? What does it mean to you? For example if you create a Facebook bot and sell it for a one-time fee how long do you realistically plan on updating it for? What happens if Facebook just goes away in a year or makes it impossible to use with Ubot?

 

This is something that has always bothered me with having an option like that. I see it everywhere and yet there are never any clearly defined terms (some popular products don't even have any terms really).

 

What do you guys do and how do you protect yourselves for the future?

 

I have told myself I'd never make another (compiled) product with a one-time fee but it's hard to compete when others do it.

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I agree. This lifetime updates is really useless for a one time fee. All my bots are monthly fees. Its way better that way. You give updates free for a lifetime. How in heavens name is that possible. 1 year license can do with me.

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I think the best way to keep customers and create new ones is to be fair and reasonable,people have too much choice for bots to be throwing their money in a hole every month,if theres a product that needs updating every few weeks,best to get out of the game quick and cut your losses,and stick with products that mainly use API's and the few page manipulations wont cost days of maintainance,rather than updating and making ends meet,a rat race.

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That's true. But why should you spend all your time with updates for free, without asking money for it. That is what HelloInsomnia is talking about. People spend all the time with updates without asking even a small fee. In my opinion I personally think this lifetime updates is just a scam. Monthly or yearly fee is better. Let your members pay you a fee to use your software even if it is small one.

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Ive had a lot of success using monthly and lifetime license options for the same product. Make the monthly's reasonably priced and make the lifetimes a premium. This way you bring in many monthly users that keep financing the updates and you get big payments out of the lifetimes. If you don't offer lifetimes at all you are alienating a big portion of buyers that won't pay monthly's. Many users would rather pay much much more just to not have to pay a monthly. 

 

Also keep in mind that in this industry many users take a stab at online endeavours and drop out when they realize its hard to make things happen online. So lets say you priced your lifetime option at 14x the monthly. In all reality how many people do you think will actually be subscribed for that long? So most lifetime licenses sold are bringing in more than just grabbing a monthly for a few months. You should think of the lifetime license as the buffet style business plan. Most people will only eat $8 of food but charge them $15 and tell them they can have all they want. Most users will subscribe to a monthly for 2-6 months but charge them for 12-14 for a lifetime license.  

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I agree that the updates should not be free and you would charge a higher price which I do for all of my products (so price this in by charging more than most).  It is crazy that I see people selling their premium bots for $3 and $5 dollars where I'm charging 10 times that amount.  You know that you are going to have to update the software at least once so why not account for this in the pricing and still only charge the customer once.  Everyone loves a one time price so that is what I give them but they will pay a higher price because I know that there will be at least one update required.

 

Also in regards to the yearly recurring fee I would probably stay away from that as most people like "VentureOnline" said move onto others things, quit Internet Marketing, or whatever.  What this means is that most people when they make an online purchase usually forget within a few months that they even brought it, so when they are charged again a year later for something that they do not remember purchasing in the first place spells trouble for you.

 

You can almost guarantee that the average person especially if they aren't using the product will not remember it being a yearly fee and will either file a dispute, request a refund, or file a chargeback.  It's is almost guaranteed that this will be the outcome.

 

I would just stick with a one time fee whether this be a regular purchase or lifetime license, or a monthly fee that the customer can cancel at anytime.  

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If the bugs are my fault they get fixed for free. (I know un ubot like.)

 

I try to stay away from high maintenance customers/sites and any site updates are free for 6 months.

 

I would define lifetime if it comes to it. Life of site/customer case by case. I also would put a line in that states these terms are subject to change at anytime for any reason. :)

 

But I don't do commercial bots for these reasons above, people expect too much for too little. Custom jobs are the way to go!! and I try to sell code not compiled if I can.

 

The moment you sell a decent bot for decent price some person come along and sells similar one for less then you get in that rat race and now you are spending all that time competing and not making more bots. Then those cheep bastards will want a refund i the other bot is "better" for the moment.

 

 

My target customers are NOT BHW forum types. They are local businesses that like to do shit themselves and save money from repetitive tasks a bot can do and employee's shouldn't. Because if you can save them man hours they can see the value in a higher priced software and they complain a lot less.

 

Certain niches (most) you can sell the bot country wide.

 

These type of people aren't looking to scam you left and right so licensing not needed most of the time.

 

They are relatively low maintenance respectable people that have respect for others and have money to spend, especially when you show them how much they can save annually by reducing their overhead.

 

So, "Lifetime" is relative!

 

Nick

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Docta it is true that other sell there bots much cheaper. Its actually very sad. I came across someone that sold a compile bot for freaking five dollars on fiverr. And that same bot runs on a website for $57 and the best part is its the same person who created that not.

 

But its our problem these days. Competition....

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I've just encountered this exact issue on my latest product. I do NOT offer lifetime licenses. A good business model makes it possible to continue error correction and development on a program only if there is some formula for continuous income. It just makes sense. I normally go with a monthly payment model.

 

Does it make some people upset? Yes, it does. But I sell quality software and stand behind my code. I can only do that if I don't have to worry about making the bills on other new things while not making anything on the old going forward. This model does work - do you have a cell phone? Did you know that it costs the telco less than 2 cents per minute to satisfy the needs technically for a call? This model is one of the most successful in the business.

 

Just my 2 cents worth - or one minute talk time worth, lol.

 

Frank

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Thanks for all the replies and great insight :)
 

I think I may try out something where they buy the software at a price and then they pay a lower monthly fee for updates. Something like $37 one time then $5 per month for updates and they can cancel the updates and keep the current version. I'll have to keep thinking about it for sure.

 

I guess the issue I'm running into is the crowd I plan on selling it to, Nick (CD) mentioned BHW forum types and yes BHW, WF and so on they would much rather pay a one time fee than monthly for a compiled software. And there are stunning examples of other software that is a one time fee and yet is constantly updated/maintained. If GSA or SB can do it why can't you? That is a tough crowd for sure.

 

But I think maybe in the end you just have to realize that you can't do that unless you have a software like one of those and you know it can sell 10's of copies a day for years to come. You will have a smaller crowd to sell to but if the software is good people will still buy it.

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That is my structure. You pay me an X amount for the software and for the monthly fee I charge like $5 to $15 for the updates which include be features as well. And the best part is meters license system is making everything so easy for us, especially the no update feature. You keep then the current version without updates. So insomnia I personally think you should do that. Look at your software man e.g the authority tracker, that's a PURE monthly fee bot...... That's on my list to purchase it from you.. Hope its still available

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Guys the best way to figure out your pricing is to consider these factors:

 

1. First and foremost - how much time/energy/money that translates into a cash value are you saving per month with your bot?

2. What will the market bear - in other words, if you were to put out a top tier product, what can you charge? This will also be dictated by the actual marketplace.

3. What do you need to make to 'make it worth your while'? This is the last point but the most important!!

 

Let's say I decide I'm going to release a product. I do charge a larger initial charge, by the way - support in the beginning is the worst, lol. Lets say my bot will save 1/2 hour of time per week. In that area, the guy's time is worth $30 per hour. So technically, you are saving them $30 x 1/2 x 4 = $60 per month. Now your tool needs to essentially price below that. So let's say I decide to make it $27 per month. Immediately I can bring out the benefits of the fact that I'm saving you 2 hours a month and it's going to cost you 1/2 as much as you pay for your time right now.

 

Now, I analyze my competition and there is one person selling a like tool that's established for $47 per month and there's another guy willing to sell a like too for $27 one time fee. I need to make sure that my tool does shine and charge the monthly.

 

Finally, how much do you need to make? Well, if it's going to take you about 10 hours per month to support the tool and you want to make $100 per hour (at least I hope you do!!), you need to clear, after expenses, $1,000 per month. At $27 per subscriber, that works out to around 38 to 40 subscribers (remember you have to pay fees to paypal or someone else). Ok, can your market provide you with 40 stable month to month subscribers?

 

Again, make sure you look at all the angles and equate whether this is worth it or not. If you are wondering whether you think you have a good idea - either look to see if people are asking for a better solution like yours or ask trusted people in your circle of influence - who would cough up the cash - to give you a thumbs up!

 

One other thing - make sure you add in your initial development time - that's where the one time fee upfront helps to offset that. I will normally charge 2 to 3 times the months for the first month - setup fee.

 

That helps to offset my weeks/months of development. And I do try to make sure that the product makes me much more than $100 per hour. If you are in doubt about any of this, hit up any of the really successful guys who've done it and ask them to tell you more about their success. There more than a few in this forum!!

 

Cheers,

 

Frank

 

PS - another vote for Meter's system!! And if you need outside technical help, he knows Meter's product well, TJ is awesome!!

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Scrapebox and GSA are huge tools that there is no way I would consider making those types of tools in ubot. UBot is not made for these things and far to unstable. It is hard enough to try to some small aspect of those broad range of features they have. That is why they can sustain the low start up cost. They appeal to a broader range of folks than a mere twitter bot.

 

This is why I am on to Python now a days so if I have a great idea like Ubot, SB, GSA. I can make it for any platform/device as well. Best of all most of the libraries are open source which means I can fix a bug NOW. Rather than wait for someone else to in x amount of time and submit it for a patch AND get credit for it.

 

I just wish meters locker worked on Python them I wouldn't need ubot at all in those rare cases.

 

Ubot can do a lot of basic task and has taught me a great deal but I have hit its ceiling a while ago. All that drag and drop makes my wrist/hand hurt too.

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That is my structure. You pay me an X amount for the software and for the monthly fee I charge like $5 to $15 for the updates which include be features as well. And the best part is meters license system is making everything so easy for us, especially the no update feature. You keep then the current version without updates. So insomnia I personally think you should do that. Look at your software man e.g the authority tracker, that's a PURE monthly fee bot...... That's on my list to purchase it from you.. Hope its still available

 

I think this is my favorite type of structure so far. Authority Tracker is still available by the way there are no plans on changing that anytime soon.

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Guys the best way to figure out your pricing is to consider these factors:

 

1. First and foremost - how much time/energy/money that translates into a cash value are you saving per month with your bot?

2. What will the market bear - in other words, if you were to put out a top tier product, what can you charge? This will also be dictated by the actual marketplace.

3. What do you need to make to 'make it worth your while'? This is the last point but the most important!!

 

Let's say I decide I'm going to release a product. I do charge a larger initial charge, by the way - support in the beginning is the worst, lol. Lets say my bot will save 1/2 hour of time per week. In that area, the guy's time is worth $30 per hour. So technically, you are saving them $30 x 1/2 x 4 = $60 per month. Now your tool needs to essentially price below that. So let's say I decide to make it $27 per month. Immediately I can bring out the benefits of the fact that I'm saving you 2 hours a month and it's going to cost you 1/2 as much as you pay for your time right now.

 

Now, I analyze my competition and there is one person selling a like tool that's established for $47 per month and there's another guy willing to sell a like too for $27 one time fee. I need to make sure that my tool does shine and charge the monthly.

 

Finally, how much do you need to make? Well, if it's going to take you about 10 hours per month to support the tool and you want to make $100 per hour (at least I hope you do!!), you need to clear, after expenses, $1,000 per month. At $27 per subscriber, that works out to around 38 to 40 subscribers (remember you have to pay fees to paypal or someone else). Ok, can your market provide you with 40 stable month to month subscribers?

 

Again, make sure you look at all the angles and equate whether this is worth it or not. If you are wondering whether you think you have a good idea - either look to see if people are asking for a better solution like yours or ask trusted people in your circle of influence - who would cough up the cash - to give you a thumbs up!

 

One other thing - make sure you add in your initial development time - that's where the one time fee upfront helps to offset that. I will normally charge 2 to 3 times the months for the first month - setup fee.

 

That helps to offset my weeks/months of development. And I do try to make sure that the product makes me much more than $100 per hour. If you are in doubt about any of this, hit up any of the really successful guys who've done it and ask them to tell you more about their success. There more than a few in this forum!!

 

Cheers,

 

Frank

 

PS - another vote for Meter's system!! And if you need outside technical help, he knows Meter's product well, TJ is awesome!!

 

Thank you for the words of wisdom. I will be using Meter's system by the way :)

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Scrapebox and GSA are huge tools that there is no way I would consider making those types of tools in ubot. UBot is not made for these things and far to unstable. It is hard enough to try to some small aspect of those broad range of features they have. That is why they can sustain the low start up cost. They appeal to a broader range of folks than a mere twitter bot.

 

This is why I am on to Python now a days so if I have a great idea like Ubot, SB, GSA. I can make it for any platform/device as well. Best of all most of the libraries are open source which means I can fix a bug NOW. Rather than wait for someone else to in x amount of time and submit it for a patch AND get credit for it.

 

I just wish meters locker worked on Python them I wouldn't need ubot at all in those rare cases.

 

Ubot can do a lot of basic task and has taught me a great deal but I have hit its ceiling a while ago. All that drag and drop makes my wrist/hand hurt too.

Python is great as well of course but at the moment I'm sticking with Ubot as I don't have much experience elsewhere. I know a bit of C# but I would have to put in a good 6 more months of really learning and creating with it to feel comfortable enough to make a product for a large audience. As for Py it's easy and clean and overall really a beautiful language but I just don't have the experience there.

Out of curiosity are you making desktop applications with Py? WIth GUI's and such?

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I think people after getting burned are starting to understand the one time payment just doesn't work for a complex project. I'm not talking about a basic scraper but something that requires active development monthly. I've seen in several forums recently potential customers before purchase questioning new applications that clearly shouldn't be a one time payment because they don't want to get burned.

 

I do stuff for local business using initial payment then monthly support model and its stuff I virtually never have to update. They key thou is these business don't want to find its not working on a Monday morning and have to email you waiting a day for a response . They want to ever have the update in there inbox or a email from you given a firm time when it will be fixed so they can plan. There's many business willing to pay a premium for this service especially if it's replacing time a employee would spend working on. All of which is easy if your organised and create simple scheduled test scripts for the applications/bots.

 

Back onto IM projects I would be interested in peoples thoughts on monthly or yearly sub talking specifically about IM products. As its a area i'm moving into shortly.

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Python is great as well of course but at the moment I'm sticking with Ubot as I don't have much experience elsewhere. I know a bit of C# but I would have to put in a good 6 more months of really learning and creating with it to feel comfortable enough to make a product for a large audience. As for Py it's easy and clean and overall really a beautiful language but I just don't have the experience there.

Out of curiosity are you making desktop applications with Py? WIth GUI's and such?

Indeed,

 

Here is the best GUI lib I have found.

 

https://python-gtk-3-tutorial.readthedocs.org/en/latest/

 

You can use Glade for a drag and drop GUI builder.

 

In the tut they show pictures of the widgets and other cool stuff.

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When using Meters system how do you guys accept a one-time payment and then also have a subscription to updates? Thats two different payments, but 1 licnese. 

 

I am one of those guys with the one time payment systems and I've been doing it for 4 years. The money is still ok but its certainly not the $100 an hour Frank is talking about. My idea was always that in order to sell my software it needs to work and be updated. Since I have to update it to get new customers its wasn't a big issue to just have all my old customers get the update as well. 

 

I would like to expand my business and focus more time into it but this also means the income needs to be more stable. I have ben toying with the idea of $5/mo subscription to updates but I have no idea how existing customers will react. Nor can I quite figure out how to incorporate it properly into Meters system. If anyone cares to share how they are doing that would be awesome. 

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When using Meters system how do you guys accept a one-time payment and then also have a subscription to updates? Thats two different payments, but 1 licnese. 

 

I am one of those guys with the one time payment systems and I've been doing it for 4 years. The money is still ok but its certainly not the $100 an hour Frank is talking about. My idea was always that in order to sell my software it needs to work and be updated. Since I have to update it to get new customers its wasn't a big issue to just have all my old customers get the update as well. 

 

I would like to expand my business and focus more time into it but this also means the income needs to be more stable. I have ben toying with the idea of $5/mo subscription to updates but I have no idea how existing customers will react. Nor can I quite figure out how to incorporate it properly into Meters system. If anyone cares to share how they are doing that would be awesome. 

On the topic of existing customers I think that you can change it for new customers and just have the old customers be grandfathered into the system (pay no monthly fees). I don't think you can just start charging them for updates all of a sudden. But I don't see an issue with changing the model to where all new purchases go on a monthly plan even if an old customer buys a new product it can still be monthly.

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beernut meters system does this you just need to set disable updates for the project thus when someone doesn't pay sub only updates are disabled, if you want the full bot disabled if sub not paid it does this by default by paypal IPN.

 

i'll double check the source as mine is heavily mod but pretty certain this is how meters system without mods works

 

thanks

kev123

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