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Maintenance Plan Discounts
Should you offer them?
Fortune Hunter




msg:3666068
 8:12 pm on Jun 3, 2008 (gmt 0)

I have some maintenance plans that I offer each month. I have 3 levels, silver, gold, platinum. Each plan is a fixed price per month and for that price they get a certain number of discounted hours and a full package of benefits.

One of the benefits I offer is a discount on future project work. For example, if they want to add a eCommerce to a site down the road I will quote them for adding this onto the site, but give them a discount for being a maintenance plan customer.

Platinum gets 20%, gold gets 15% and silver gets 10% discounts respectfully. However one of my clients on the platinum plan recently had me add a database application to the site. I billed them and applied their 20% discount and realized it took quite a bite out of the invoice, more than I was thinking it would.

Now I realize I have several months that go by where the client requests no work and I still keep the money, which means it is all gravy. However I am wondering if others offer this discount and if so how much of a percentage discount do they get? I am thinking my discounts are bit high and that I should shave at least 5% off each category, but I wondered what others thought of such a plan.

 

Dootch




msg:3669038
 5:01 am on Jun 7, 2008 (gmt 0)

figure out how much it costs you to give these discounts (ie. the total cost of all discounts given), compared to how much you make from having them (the amount of money you've made from clients who don't need extra work). Break it down to an hourly basis, and compare it to your current charge out. Decide accordingly.

Fortune Hunter




msg:3669593
 2:41 am on Jun 8, 2008 (gmt 0)

figure out how much it costs you to give these discounts

I can't really do this because it varies so much. It depends on what projects a client commissions outside of the maintenance plans, how often they do this and how much those projects price out at before I apply the discount. For example, I have one client that has been on the plan two years. He has never asked for a single project outside of the general maintenance. He may someday, but so far he has not. A person like this is worth a lot to me as his fee is gravy most months.

I have other clients that want a new project outside of maintenance at least once or twice a year and sometimes they are sizable. I put the discounts in there to entice people to stay on the plan and let them know that I give them benefits for working with me on a future basis by staying on the plan, which I use to try and even out cash flow. It really depends on a lot of factors I can't really quantify or at least I am not sure how I would do that.

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