(Company
Profile, Past
Stories, Case
Studies) Watertown, Mass.-- Despite growing pressure on support prices, software maintenance "continues to be a 'must-have' service that customers are extremely reluctant to give up," according to a new research report from the Association of Support Professionals (ASP). The report, based on data from 187 software companies, shows that the median renewal rate for support contracts is currently 89%.
"This is a truly striking level of customer loyalty," says ASP executive director Jeffrey Tarter. "When you compare renewal rates in other subscription-based industries like telecom and magazine publishing, software companies are the clear leaders in hanging on to customers."
The ASP's "Maintenance Renewal Rates" report notes that renewal rates tend to rise as software products become more expensive. "Product prices usually reflect product complexity," says Tarter. "A simple desktop application typically won't need much ongoing maintenance, but a high-end enterprise system is bound to be support-intensive. So it's not surprising that the renewal rate for software priced over $100,000 is a hefty 94%, while maintenance plans for desktop products renew at 75%."
The ASP report also analyzes the impact of other variables, including the "lost customer" rate, optional vs. required first-year support, dollar vs.
unit methods of calculating renewals, and the sales model used to generate renewals. The report also identifies 23 best practices for improving renewal rates.
Copies of the "Maintenance Renewal Rates" report are free to ASP members (membership fee is $60/year). For more information, visit:
http://www.asponline.com/maintren.html
The Association of Support Professionals is a membership organization that publishes research reports for software tech support managers and professionals, operates a network of regional chapters, and conducts an annual competition for the "Ten Best Web Support Sites."
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