The million-page-per-month license didn't provide this advantage, so
nobody bought it. They just bought a 200,000-page license instead. In
the previous year, the company had sold several hundred unlimited
licenses, but this year, after the change, they sold less than a hundred
of the million-page licenses, while sales of 200K licenses went up.
The revenue loss was substantial.
Another example of being to strict on IT, in a way that
inconveniences the end user, harming revenue and profit is Intuit's
Turbo Tax. They tried selling at a single machine install only (i.e.,
not on your laptop and desktop). Results were, of course, similar to
your example.
See http://business20.com/articles/web/0,1653,49577,00.html
AB
This is interesting. From your description, it seems as though it's
not that the customers were forced to reassess their needs, but that
they were actually behaving rationally all along. The cost of keeping
track of sheets printed outweighed the extra cost of the unlimited
license.
Have I got that right?
See, I was going to say that you diminished the value of the
"unlimited" license by limiting it, and therefore would sell fewer,
because, like, I'm a genius and stuff.
(Just kidding of course, I had no idea but I was interested in the answer).
Maybe this is a good illustration of how us conspicuous consumers are
programmed to buy more capacity than we need (unused celphone minutes,
20hp lawnmowers, 1000 watt stereos, 1200 calorie fast food burgers,
SUVs). That's how I operate anyway. Better to have it and not need it,
etc.
Matt: no, the software keeps track of usage, so that's not a problem
for the customers. It seems to be mostly a psychological thing: what if
I happen to need more than 200K pages in a month? Then what do I do?
Oh no!
Even if that's not really very likely, people are willing to pay extra just so they don't have to worry about it.
David: I believe that they are about to switch to a concurrent use
license anyway, which requires a completely different pricing model. So
the question of going back to the old model has never come up.
And one other thing: ironically, as you recall, Co. X was prompted to
change their licensing by fears that customers could use "virtual
printing" to print huge numbers of pages with a single license. But it
turns out that virtual printing is actually slower than the highest
speed printers, so this isn't even a problem. Basically, these guys
blew it on so many levels it's hard to know where to begin.
At our shop, it would have been more like "how much hassle would it
be if our license ran out at 9PM on a Friday night while were running
weekend jobs". We would know what to do - the real question is how fast
an upgrade could be bought and installed - hours? days? weeks? We
would have bought the unlimited license just to avoid that problem.
It seems the company didn't find out the actual customer usage
patterns of the licenses before they made their decision. I assumed
they knew, but it sounds like they were surprised. Surely they would
have made a better decision if they knew that those several hundred
licensees printed less than 200K pages per month.
Virtual printing is actually slower than the highest speed printers
What this tells me is that the company let its fears get the best of
them. Certainly a company could have bought one unlimited license with
the intent of using it on multiple printers, but this is not very
practical if the computer can't keep up with even one of them, let alone
multiple printers. An expensive lesson here, that's for sure.
Yeah, that's the way it goes.
Actually, the TurboTax quoted misses another big point: The software
was useless to anyone without a PPP/IP internet connection. You
couldn't activate it.
I stood in a line to exchange a memory module at my local Fry's
earlier this year and watched as half a dozen people returned copies of
the program, as it wouldn't work for them.
