Some Thoughts About Unprofitable Customers In The Software Industry

Many customers make use of the 7-day-free trial of my software. A few of them contact me with long series of support emails, that fill almost the entire trial period. They mostly need help with setting up features or customizations (which are not included in the product, but there is of course no hard limit when to say no), or they have trouble with their payment, or another plugin is doing something weird and until I have figured that out, I cannot be sure if this isn’t a bug.

From the current selling price of $47, after paying fees to the sales platform and Paypal, I receive around $37, which still is gross income because I need to pay taxes and health insurance and finance my equipment and the Internet connection and my website and the software etc. You can imagine that this amount has already disappeared through a bundle of lengthy support threads for one of those mentioned trial customers.

So it is really funny (or should I say: absurd?) how some of these people, when the trial is close to its end, try to put pressure on me, sending hints that they might not buy the product if I don’t add this and that feature or do another special favor. Usually I am quick to offer to cancel their trials. Financially they are already a loss. Even if they buy, I only have to deal with more support tickets.

Of course, I could try to raise the price so that these cases of pre-sale support would be covered by the earnings. But then again, the customers who are easy to handle would then have to pay for those difficult ones. Not only that I need to find the price that works best, I also need to find ways how to quickly identify unprofitable customers and how to gently persuade them that this product is not the right choice for them. That is a weird role but I don’t see any better solution.

The main problem seems to be that software is often a fixed-price product with a “free” service attached to it. Many customers don’t seem to understand that this free service is not free for the provider. At some point, the provider will slowly start pulling the brake, until the point where he has to get rid of the customer. I believe that he has the right to do so. Even when the software is buggy, there is a point when refunding the purchase makes more sense and is “morally” acceptable.

I don’t really understand why this is a particular problem in the software industry. When you eat in a restaurant, you also receive a fixed product together with a loosely defined service. Usually the customers of a restaurant don’t expect that the waiter cuts their steak into bite-sized pieces, that the potatoes are compatible with the room illumination and that all drinks can be sampled in five different glasses. A restaurant only works because the customers understand that the waiter has to serve many customers and has to streamline the service in order to be cost-efficient. If they expect one hour of exclusive attention, they would have to pay a much higher price for their meal.

Maybe the difference is only that in a restaurant you see the waiter working, while in software support you don’t see the efforts.

Photo by mirceaianc

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