We have a fairly new product (v1.x) that is installable software, and which is charged as a once off payment with free upgrades to further 1.x upgrades. There is no 'annual maintenance' construct.
For version 2, we are planning some service components (including web delivery components) which would lend themselves to a more subscription-based model, and provide a neater way of creating plans (eg different segments, multi-user, more resources, more features, etc).
So my question is, from people who have done it (or considered doing it) are there any lessons on how to manage that with your existing customer base, primarily from the perception of "I've already paid up front, so why should I pay again?"
Ideas we have are if you have bought 1.x and want to take up 2.x, you get a (heavily) discounted rate for the first 12 months, etc - but we fear that we're still asking for them to get their CC out again and at the same time committing to a new recurring payment model, so it would be a harder sell than just another $X up front (that they are already used to).
If you've built a good product at adds value, then your current customers probably won't hesitate to pay for the next release. For example, I love IntelliJ. They charge $300 for each major release. I am glad to pay it and glad to get the next version. Its a fantastic product that adds significant value over any substitution.
Also, technically, they purchased version 1 and they got version 1, so you delivered.
Can you grandfather in version 1 buyers? If not, I've read that offering 50% off the next purchase or 12 month subscription is considered good etiquette.
I think it is a great idea to move from a purchase model to a subscription model. Here's why:
Now, to answer your question, how to handle "I've already paid up front, so why should I pay again?"
There are many reasons: