We have a number of agency clients who are using our CMS branded as their own. Lately we are getting a few emails about some problems that are being found, 6, 12 and even 24 month later.
We going to be pushing our product more this year and need to start thinking about how long we should be supporting each instance for, with the possibility for an adding support package to increase the support period.
In most instances I don’t see clients paying extra for support. So on this basis does anyone know how long we should be supporting each instance of our CMS for? Support would include issues with the CMS, issues with any bespoke functionality, problems with the integration of the clients design, and problems caused by the client. I suppose we’d also need to support any new browsers and updates to any 3rd party scripts used.
Any ideas on what would be considered a reasonable timescale?
When we used our own CMS, we provided ongoing support,updates, bug fixes etc but the clients were paying an ongoing monthly fee, so that was included in the cost. I think this is the best solution as it maintains an ongoing income for something that is rarely used by the client apart from the first couple of months. Also we provided training for each member of staff using the CMS, and no support given to anyone who didn’t get training. Hosting was also included. It was just a fixed annual or monthly fee, based on the number of users of the system.
With our system, an agency creates a design for their client, they also provide the hosting. We provide a branded CMS branded for the agency, create the HTML and integrate it with the CMS. Once done, the agency inserts all the content and we make the site live. We provide training for the agency and they then train each client themselves, so we don’t get involved in training directly or even providing ongoing maintenance contracts. In a way we are simply providing a product and a psd to HTML service.
I think you can turn this into an opportunity that is a win-win:
Introduce a licence fee that goes on top of hosting, ie new revenue
With the licence fee, give the client updates on the CMS for free. They are paid for by other clients, but you need to be careful to not just throw any bit of functionality in there. Also fix bugs as part of the fee.
Limit the term of the licence, because you can’t support everything forever. Once it is expired, they need to upgrade (paid for) or they loose the right to have bugs fixed.
That sound like a good idea. How long should the licence be for would you think? 12 month?
Would it also be a good idea to offer two licence fee’s, a low cost one with 1 months support from the site going live, then a full licence fee covering 12 month?
We need to keep costs low, as we’re currently competing with the likes of Wordpress, so offering a licence fee with 1 months support would allow clients have that option and take the risk nothing goes wrong.
At the minute we make our money when we create the HTML integrate everything with the CMS. We don’t really make any money from the CMS itself, it’s just a tool we use to attract clients. As an example one of our clients gets a lot of simple websites. They knock up a design and get it approved by the client. We convert the PSD to HTML, setup an instance of the CMS, integrate the HTML and create all the empty pages etc ready for our client to start inputing content. Something like this they’re paying us between £400-£500 for, which more or less covers our time. I’m conscious that my agency clients need to remain competitive in the industry, and if our prices increase too much, many of them will resort to using Wordpress, which some already believe would be cheaper (even though we’ve done a few wordpress sites for clients and they’ve actually cost more).
I’m not sure if I could argue the case of a 1 month licence. I think it should be 24 or 36 months, depending on how cutting edge the features are that you want to put in it. Look at Joomla, you can have conservative versions every 24 months or more cutting edge for 6 months.
It is really hard to fix a problem in a business model by cutting costs. Much easier by increasing. Why do you think you are in price competition? Wouldn’t it be good if the agency had something to mark up and make more money off? Wouldn’t it be great if the end customer had a guarantee that everything is taken care off for 24 months?
The reason I think I’m competing with Wordpress is this…
One of my clients is a digital marketing agency, they specialised in SEO and Marketing but started offering websites. They’ve been using my CMS in some shape or form for the past 3-4 year. They are keen to compete with other web designers etc in the local area and as a result the have to keep their prices around the same level as their competitors in order to ensure they’re not losing work. They have mentioned on numerous occassions that they’re keen to start using Wordpress because 1) sometimes their clients are asking for it and 2) they have this misconception that because it’s free to download it’s a cheaper solution. If that particular agency decided to stop using our CMS completely and jumped over to Wordpress, our business would lose around 35% of it income. (yes, I know, having a single client take up a large chunk of our income is another issue which we’re working on).
We’ve been working with them and other agencies for a number of years now, and the way we’ve been doing things has been cost effective for our clients, and it’s worked well. My issue is that I’m finding that the more and more sites we’re doing the more we’re supporting them, and as we didn’t specify any support arrangements I’m finding large chunks of my day are being dedicated to supporting sites rather than working on sites that earn us new money. That’s why I’ve started to looking providing a support package, so the client has the option, but if they choose not to have the support package, then it’s clear to them that the site won’t be supported after X period (1-3 month for example). This way, clients we have now can still operate in the same way and still be competitive, while also having the option to purchase a support package.
I just have to be careful with costings. Let’s look at a simple 2 template website, with a blog. Using our CMS a client would pay us around £500 to create the HTML and integrate it into our CMS and activate our blogging module. Our client has to create a design for the site, insert the content on behalf of the client and manage the project. They might charge £250 for the design, another £150 to insert the content, and £50 to host the site for a year. That brings the cost to the client to around £950, for a fairly basic but well put together website with no SEO. Yet one of their competitors is offering almost the same product (with SEO) for £600 (I have no idea how they’re offering stuff at that price)!! So you can see why that particular client is raising questions with me, because they want to compete with their closest competitor.
On the other hand, when you download something like wordpress, that’s it, there’s no support, and having looked at the wordpress site they’re charging $15,000 a year for it.
Support would include issues with the CMS, issues with any bespoke functionality, problems with the integration of the clients design, and problems caused by the client. I suppose we’d also need to support any new browsers and updates to any 3rd party scripts used[/FONT][/COLOR]
I think you need to separate the support issues - for example, issues with the CMS or bespoke functionality that are down to an error on your part should come with a long support term, say 12 months, or even longer - the longer the better in terms of buttering up your client. However I would draw a line under other things like tweaking for new browser versions, client mistakes or having to deal with updates to existing 3rd party scripts - anything that needs fixifg due to an event out of your control needs to be paid for if and when it becomes a problem. It may never be a problem. Just make sure everything works fine for specifically listed browser versions the day the site is handed over. I’d also make sure you specific the hosting requirements in case the client tries installing on an incompatible server OS or php version etc.
What’s more important for your client though - low pricing or great ongoing support? I’m not sure they can have both. Can you reduce your costs? I assume the most expensive part of your process now is creating the template - can you not outsource this offshore? $49 seems to be the going rate for 2 day turnaround. This is probably how your competitors are keeping their prices lower. You might want to do a little investigating into what support your competitors are offering these agencies, it may be that there is no support whatsoever.