We have face based attendance solution. The pricing is user based licenses. The B2B customer has to buy as many user licenses as the number of employees who will enroll themselves for daily attendance. The total deal is of $20000 for 1 year. We have to provision the system, provide support etc and hence we ask for 50% advance payment. The remaining is paid on a monthly basis. The CIO wants to understand why the advance payment is required even before we start. Seeking clarity to understand from the community that what are the convincing reasons to ask for advance payment from a B2B customer for any cloud based offerings?
I would recommend invoicing for the full year up front. If anyone asks, tell them that this is industry standard. Salesforce, HubSpot and many others do it this way.
If that answer isn't sufficient, here are some others reasons that are beneficial for the customer:
- It simplifies the accounting for the customers - one invoice instead of 6-12
- If you were to buy packaged software, you would pay a huge up front fee and then annual maintenance - we are just asking for the first year
- If you pay monthly, there is no commitment, so there is less incentive to get buy-in from the team and users
Answered 9 years ago
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