Should I Go for the One-Time Big Bucks Deal or Make a CLIENT FOR LIFE?

I was having a conversation with an IT programmer whose forte is designing Management Information Software with GPS Tracking for the Transport Industry.

Typically, he would charge a big upfront fee for software development and implementation as he is looking at the project as a One-time Engagement i.e Get-As-Much-As-You-Can-Now attitude.

I told him with his pricing in the P250,000 level (US$50,000), he is only going to attract big fleet accounts who will insist on getting the Source Codes (that will allow their In-House Programmers to reverse engineer for their own future enhancements & therefore, no more future business for him) and which will also mean he will be up against the huge software houses.

I was suggesting he does it on a Software Maintenance basis, to wit:

1. Charge Upfront a fee of P30,000 to P50,000 good for the first 5 truck units;

2. Charge a Software Maintenance fee of P5,000/month with a minimum of 1 year coverage;

3. Charge additional Software Maintenance fee of P500/month for every additional truck unit above 5.

4. While the client is under a 1-Year Software Maintenance Contract, the client is entitled to upgrade to the new version of the software for a certain fee (lower than the initial upfront fee)

5. Software Maintenance will include regular back-up of files, system repair, GPS & other special feature enhancements. (The selling point is to let him do the client's Back Office as the client may not have his own IT team for that)

The point I wanted to make is MAKE THE CLIENT STAY WITH YOU FOR AS LONG AS THE BUSINESS IS RUNNING. I do not think the client will migrate to another system if the programmer's software is already handling several years historical data and is doing a good job of it. Every small business entrepreneur fears loss of data, software downtime due to migrating to a new untested computer system and anything IT that he, the client, does not understand.

Play it right, I told the programmer, and he will have CLIENTS FOR LIFE.