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Advantages of Subscription-Based CRM SoftwareYou may have noticed that Web Cliento recently made the leap to offer subscription-based user licensing of its CRM software. Why offer subscriptions rather than selling licenses outright? It could be that subscription-based software creates a win-win situation for vendors and users alike. One of the most frustrating things about CRM software in business is its "shelfability". Good-intentioned managers purchase the (sometimes outrageously priced) software in its shiny box, and that box proceeds to sit unopened for months on end. By the time a company starts using it, the vendor is putting out a new version. CRM in this context becomes a veritable black hole into which companies dump money. Enter subscription licensing, a practice made popular by Microsoft for its business applications. By allowing users to pay-as-they-go, software vendors reduce the daunting start-up costs of applications such as CRM software. In addition, the pricing structures can be very flexible, and regular payments of licensing fees keep users on their toes about taking advantage of their IT investment. Perhaps the best part about subscription-based pricing, especially in the business software industry, is the financial base that it offers to financial vendors. Rather than "sales", subscription-based software creates "cash flow", which inspires more accurate financial statements (in the wake of Enron and other fiascos) as well easier forecasts and higher customer loyalty. With subscription-based software benefiting the users and the software developers, it's easy to see why the trend is growing. |
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Copyright 2006 by Erudite Systems, Inc. |
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