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"Leasing" Apps vs Selling Apps

mdappmanmdappman Lounge Lizzard Posts: 11
edited December 2012 in Sell
I have been talking to some of the local businesses in the area and the feedback I have gotten is the fear of what 2016 will bring so they are not spending if they don't have to. That wouldn't be a blow off would it? My price point is $999 for both iphone and Android apps. Additional features extra. I also am charging $29.95 as a monthly maintenance fee. I am still getting my feet wet here so until I find out the prices on the street in my area I am starting at $999 and adjust as I go. Same for the monthly maintenance fee.

Here is my idea and I need feedback so here goes. Instead of selling the app why not lease it to them as a last resort before leaving the prospect? Lets say they resist on the initial price of $999 for purchasing the app. Instead of dropping my price suppose I give them an alternative of "leasing" the app.

Here is my math: $99 down for the iphone app and $149 for both iphone and android so I cover my costs and $79.99 per month for 24 months after which the monthly maintenance fee goes to $29.95. Any additional features like QR code to be added to the $99 or $149.

24 months x $50 extra per month = $1200 $200 in "interest" is not bad over 24 months. At least I can build on my monthly income this way instead of getting nothing if they don't buy. Lets say I can lease 10 apps over the next 60 days, that is $800 a month income rather then $0 or am I missing something?

Thoughts????? BTW the prices above are not set in stone just an example.

Chuck
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Comments

  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    I like it @mdappman, will work on the numbers myself :)
  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    Yes I like the idea, certain for a backup, maybe even as main offer. the only downside is getting the monthly payment. maybe a standing order?
  • EricEdgeEricEdge Lounge Lizzard Supreme Posts: 274
    edited December 2012
    @mdappman & @TerryTrainer love your creativity.

    I must admit, I have spent a lot of time on this issue. I've found unless their is a meaningful way to measure the performance of an App they will quit in a few months.

    I have a normal price I promote the App and after negotiations end, they always end up purchasing their App 25% off the normal price and this seems to satisfy many of their issues.

    Know that the reduced amount is the actual price I want to sell it for.

    As for the monthly payments, you know I've suggested in previous posts, you can offer the option, if they pay yearly they can save 2 months. Like $39 per month or $390 per year.

    The most important point I'd like to share and for you to note is, when a person has an issue with price, that is normally not the real issue. They are actually saying: "I'm NOT convinced your App is going to help me grow my business or make me money and as a result, there is no way I'm going to give you any money when I don't understand how this App thing works."

    Putting it simply, they are scared and are really asking "I need more information on how this will all work, can you help me understand the process, that it's going to be safe and the benefits that will make my business better?".

    What now? Why don't you consider how your customers feel, thinks and experiences when dealing with you and your proposal. Think about how you present your info, what info you actually share and what is the process you will take your client on from start to finish.

    When you start to take action, the next potential customers you talk to, start with the end in mind. Show them the whole process in advance of what they can expect will happen if they become involved with you. I call it pre-framing.

    As a result of pre-framing, they will feel trust and confidence in your ability to deliver.

    Hope this helps,

    Cheers,
    Eric Edge
  • mdappmanmdappman Lounge Lizzard Posts: 11
    @TerryTrainer @EricEdge@perfectp Thanks for the great feedback. Being new to app.cat, what types of "support" material do you use in your presentation? As @perfectp mentioned the use of pdf's and I like the idea of a total price that includes one year of monthly maintenance. Why I didn't think of that I have no clue.........

    @EricEdge I like the 25% discount to get to "my" price point as well. I am feeling a need to sit down with a calculator and do some figuring. Any other ideas that you all are using that you would be willing to share?

    I am going to be doing screen dumps of the apps I have designed and will print those out and use them in my presentations. It is a little awkward trying to show an app on my iphone. Anyone using a tablet in their presentations and how is that working?

    Thank you all for your feedback and as I said I am new to this and am trying to get my act together so any feedback will be greatly appreciated. Thanks.

    Chuck

  • mdappmanmdappman Lounge Lizzard Posts: 11
    @EricEdge Wow this information is priceless. Thank you so much.
  • perfectpperfectp Lounge Lizzard Posts: 87
    @mdappman I always show the apps on a phone and an iPad for some strange reason the customers just get excited.

    As a company we can turn images, video clips, music and text in to a movie production, this is great when the customer does not have a video. We take there images and produce one for them then put it in the app
    1 looks impressive
    2 helps with SEO
    3 affordable to the customer as we charge around £40 for it.

    I have one as a presentation that I show the customer all about the apps that way they have already seen one and love it.

    If any one feels it will help them let me know and will do one for fellow appcatters FOC
  • Mark HarrissMark Harriss Lounge Lizzard Posts: 42
  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    that would be a great christmas pressie @perfectp :)
  • WickedWicked Lounge Lizzard Posts: 160
    I agree with @TerryTrainer perfect Christmas present @perfectp
    Another way I have managed to present apps to clients is making up a pdf with screenshots of an app that could be for them. This way you can email to the business too. Under each screen shot, I write all about the page and what it does. My front page is a picture of a phone first with their icon logo button on it to showcase their business.

    I found this has worked for me over the last couple of weeks, but I have had some spare time as been stuck at home with pinched nerve in my shoulder. Have been unable to canvas. You still need to follow up, and obviously for some you still need to show them, but for the savy's out there they get it and jump on board straight away. Another thing I have been doing is research on and about branding businesses with an app, I attach snippets of this too, plus snippets of how many users for their country have smart phones.
    I am also offering my existing clients free months of no fees for any referrals they send my way, So far my Italian Restaurant owner the one that gave me a testimonial has sent me two clients. So for him he has just added 4 months of free stuff from me. eg. I sold the app outright. So now I would normally collect fees for submitting or changing content, he his wrapped as he has just got some freebies.
  • WickedWicked Lounge Lizzard Posts: 160
    @mdappman
    I am like you, have been all over the place trying to work out the correct price point without sounding too cheap at the same time. As it also makes people wonder if the product is good if too cheap.

    Here in Australia the average app is costing businesses $5500 for one and if they want a second about $10K for the two. I have found with research this seems to be the average price here, and I really do not know if these guys are building them from the ground up or using another program like appcat. Either way, my price point was actually the same as yours at $999, But for my launch period I offered a $500 discount to get me going. Instead of charging a monthly fee after this, my clients signed my paperwork for the sale and if they wanted changes made they paid me a fee for doing so. I have not got the ecommerce site yet, I signed up originally on the $199 plan with appcat and have to pay for all plugins. So based on this I made my price point to include these fees, and time to put it together.
    However after reading @EricEdge article on how he works out his price this has gotten me to think am I too cheap?

    Maybe all of us could get to gether on a price point for all of us for all our locations and thats what we all sell for? If we are in different countries we then could use each other as our business colleagues around the world, making all of us look like we are a combined business company. If we have professional websites maybe even link to each other to show our visitors that all of us are a professional group.
    I am probably going off here, but what do you all think, we affiliate each other I suppose the word would be.
  • WickedWicked Lounge Lizzard Posts: 160
    Affilate is not what I mean, I mean take a look at our partners world wide. Make us all look like we are part of a large group. :-*

  • perfectpperfectp Lounge Lizzard Posts: 87
    @MarkHarriss @TerryTrainer @Wicked

    No Problems, what I would need is images and text that you would like to appear in the production. The text should be bullet points to have impact.
    Will have to find a way to get the images to us I would suggest We Transfer its free...

    Let me know if you would like to go ahead and we can sort it all for you all :-bd
  • mdappmanmdappman Lounge Lizzard Posts: 11
    @Wicked more great info...thanks. I also signed up on the $199 plan and at the time app.cat had offered a $9.99 per day plan billed monthly and I could not swing that at the time but if it comes up again I will look real hard at that since it included all the plugins if I am not mistaken. As I had mentioned in a previous post I am a work in progress and will adjust my pricing as I go along.

    @perfectp what program are you using to make the video if you don't mind sharing?
    If I am right you are charging about $68 USD to make the video?

    Hey everyone, the information you all have shared is great and I am sure many folks are benefiting by the sharing of these great tips. I like how much support there is among appcatters and I am glad to be a part of the appcat family. I am looking forward to much success in the mobile app world and I hope you are too.

    Chuck
  • WickedWicked Lounge Lizzard Posts: 160
    @perfectp. I made a video today mpeg4. Did Voice over and everything. It worked out great I think, except do not like my voice on it!!!!! So thank you for your offer, I will leave you alone for the Christmas holidays.
    I would be happy to show it here if I knew how to get it on here? I used the program Wondershare, but it is a purchased program. @mdappman there is a program called Vimeo I think which is free for basic use. Maybe try that one to give it ago.
  • WickedWicked Lounge Lizzard Posts: 160
    @mdappman, Yes I was going to sign up the other day for the $9.99 daily plan and then when I get funds in buy the full suite later. Went to buy and it was gone. Now asking $999 per month. I am not selling enough yet to commit to that. Have to wait a little longer. Maybe they will bring it back in the new year.
  • WickedWicked Lounge Lizzard Posts: 160
    @perfectp once again thank you for your generous offer. :-*
  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    WOW @Danteleach, sounds FANTASTIC.
    Hope it goes perfectly :)
    Fingers crossed for you.
  • WickedWicked Lounge Lizzard Posts: 160
    I say WOW too @Danteleach, I hope it is successful for you, However I do ask the question about purchasing over leasing. I have done my research too, and found that no one really sells them outright.
    Ask yourself the question, have you got anyone to run your business if something was to go wrong? What if something went wrong with Appcat?

    The way I see it, none of us except Appcat own the actual back end of where these things are hosted from. I personally do not believe you can sell something unless you have all the files etc etc to sell and have done all the work yourself coding it.

    Don't get me wrong, I have pondered this question myself. Yes we all have a user panel, and if we are lucky we have nothing more to pay if you have purchased the full rebranded corporate solution. But we do not have the access of the hosting section?

    Ok, look at this way, if in 5 years these 500 apps are still going, What then? You still need to maintain them and Appcat have to maintain hosting of them for you.

    Personally and its only my opinion, You should charge a set up fee for each app. No more to pay on set up whether it is $500 or $6000 but you should lock them into a hosting fee for ever of the life of the app. Technically if they have paid a set up this would be non refundable , and the hosting then could be cancelled at any time after your set period of say 12 months or 2 years. I would definitely lock them into hosting for reasons even like you selling your business.

    Or maybe your set up fee could include the first 6 months or 12 months hosting as such. but I would build in my hosting to include further updates for the client and limit the amount of updates per month to say 2. Therefore don't make your hosting a ridiculous $9 per month, make it something that is worthwhile to include your time.

    Look at it like a website for example. Most people pay someone to set up a website and they pay for this set up . But their hosting if goes unpaid the website shuts down. Even on these free sites out there to unlock more you pay hosting. Technically all the person owns is the domain name.

    Sorry if I put a damper on things, but everything should be looked at. I am a person that if I was paying over 5 years and paid in full or even paid upfront $6000 I would most likely ask the question is this mine to keep and can I have the files and what if I want to give it to someone else to program for me. So Whilst I believe Appcat are very strong with their business plan, if someone was to ask you that very question how could you give them your backend.

    Maybe this is now a question for our Experts.


  • DanteleachDanteleach Lounge Lizzard Posts: 22
    Oh God, @Wicked i just thought about that this morning when i woke up! I would hope to god nothing happens to their app because then my neck would be up for a major lawsuit! Well, no one has signed any official documents yet. Plus, i will be attending Full Sail University in the fall for Mobile Software Development. Which focuses on iOS and Android apps. So worst case scenario something happens to the App.cat infrastructure that i have no control over i could possible pull some classmates of mine together that have some student loans that need paying off! For their assistance in fixing this issue while also notifying the proper company board members. So, it isn't 100% but i will be taking what you said into account @Wicked. Lord forbid! Lol
  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    with the sums involved it would not be a problem to get an app developed
  • WickedWicked Lounge Lizzard Posts: 160
    @Danteleach, I wish you all the best in your venture and it would be a very good account to get for obvious reasons. Just make sure you have covered everything to cover yourself and your client.

    :\">
  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    @Danteleach, it is human nature to keep pushing for a system to do more and more, and computer systems are notorious for that, so I suggest that the biggest problem in the future will be where your customer wants the App to do what it cant do.
    Just a thought, but make sure they understand what the software does and what (currently) it can't do.
    Certainly it wouldn't stop me LOL
    All the best!
  • DanteleachDanteleach Lounge Lizzard Posts: 22
    Thanks guys for your support!
  • MoniqueCloutierMoniqueCloutier Lounge Lizzard Posts: 9
    Hi, I would first like to extend a personal hello to everyone here in the forum. @MoniqueCloutier
  • ToddGoldsteinToddGoldstein Bouncer, Bar Keep Posts: 695
    Welcome to the Lounge @MoniqueCloutier. Glad you discovered the name dropper badge...
  • MoniqueCloutierMoniqueCloutier Lounge Lizzard Posts: 9
    edited June 2016
    @ToddGoldstein, I hope you see that I use it without bias and to be clear, helpful, targeted, engaging and to have people feel good to see their name mentioned.
  • MoniqueCloutierMoniqueCloutier Lounge Lizzard Posts: 9
    @Danteleach, I am curious ... did you get enough executives to say Yes to the deal?
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