At 10:01 AM 6/20/01 +0200, Edi Im Hof wrote:
>I just received a remember mail from Protel Europe for der increase of the
>price for Protel 99SE. That's nothing new.
Right. I got a similar mail here in the U.S. Well, here it was "the"
increase.... :-)
>But, there is pointed out that they will uprgrade the new licences for
>free, if within 90 days after purchase, a new version is available.
>Are we looking forward to a new version, or is this just stated to push
>the sales?
(1) We are looking forward to a new version. What we don't know is exactly
when. We expect the upgrade cost for current users to be $995.
(2) I pretty much expect that those who buy Protel at the new price ($7995,
U.S.) will get the new version free, even if it is delayed beyond 90 days.
If not, there will be some very unhappy buyers, and the last thing Protel
needs is unhappy buyers.
(3) What is *really* interesting -- and surprising -- about the notice is
that it applies to purchases of the *current* version if the new one comes
out in less than 90 days after purchase. This would mean that a present
purchaser may end up saving $2995 instead of only $2000.
There is a great deal of risk in business, inherently. But good business
reduces risk where it can. It is not good business to set matters up so
that buyers are gambling, even if the odds are good. Consider these two
situations: (a) a buyer believes that the price for an item is going to be
$1000. He decides to buy, and finds out, when he orders, that the price has
just become $800. He's going to be pleased, for sure, he will remember the
experience with good feelings. (2) He is considering a purchase of this
item for $1000, and he is told that he *may* get a $250 benefit at some
later date, depending on a decision that the company may have already made
but is not disclosing, if they implement the decision within 90 days. How
will this affect his decision?
It may seem obvious that he'll be pleased, since he won't lose and he may
gain. But people don't think that way. Rather, if we have a reasonable
expectation of winning a prize, and we don't win it because the one who is
awarding the prize makes an arbitrary decision, most of us will feel that
we have *lost* something, even we did not actually lose, we only failed to
gain.
I can make an argument through game theory that this is actually rational;
in other words, that our instincts are correct on this.
Now, consider a prospective 99SE purchaser. He's about to send the P.O. to
Protel. He gets this notice, that if the next version is released within 90
days of purchase it will be free, a $995 savings (we expect). Does he
immediately send the P.O.? If he waits a few days, it will increase his
chances of winning, it would seem. So the immediate effect of announcing
such a policy could well be to depress sales, quite the opposite, I think,
of what was intended.
However, there is another factor operating here. Protel has announced a
price increase of $2000 effective July 1. So if he waits beyond July 1, he
might save $995 but will definitely lose $2000. This is not a difficult
decision ....
So I'd suspect that there might be a flood of purchase orders June 29 or
30. June 30 is a Saturday and the Protel offices here are closed; but if a
fax were sent on Saturday, I think that Protel would be hard-pressed to
deny it. Nevertheless most users who think about these things would order
on June 29. Many purchasers, however, buy through a process which is not so
sophisticated and flexible. I've seen large companies procrastinate beyond
deadlines because they simply are not set up to take advantage of
"bargains." So I don't know how large the effect will be.
I'm definitely waiting, myself, to make any purchases; I will almost
certainly buy at least one license on June 29.
And I do anticipate that I will, in effect, be buying the next release with
that purchase. The rumors have been that it will be released toward the end
of the year. If that is not within 90 days of June 29, it will be close;
one of the major causes of Protel user dissatisfaction in the past has been
from buying a version just before an effective free upgrade date. Protel
should really avoid this situation.
Here is how they could do it:
(1) Announce that any purchases of Protel from now on will upgrade free to
the next version. This eliminates uncertainty without nailing Protel to a
particular release date. [An alternative would be to correct the free
upgrade policy announcement that it will only apply to purchases after July
1, but that could be awkward.]
(2) Give a *retroactive* upgrade discount, depending on when 99SE was
purchased. I'd make it $5 for each day that the purchase took place before
the date of announcement. By making it a daily figure, the discontinuity
will be reduced to a relatively painless figure. "If only I had waited a
week, I would have saved $35. But it's worth $35 a week to have the use of
the software, so that's okay."
Alternatively, leave the 90 day policy in place, but promise the
retroactive discount for every day before 90 days before the date of
release of the new version. This would be less expensive to Protel, but it
would slightly complicate purchase decisions. It's no problem to give a
complicated discount *after* purchase has been made, since it will be
perceived as a pure benefit, but making users anticipate a complicated and
conditional discount is not such a great idea.
Anyway, that announcement regarding the free upgrade policy, unless it was
made by some flack who had no idea what he was doing, indicates to me that
Protel expects to release the new version within three months, so that
anyone who buys in the expectation that he might get a free upgrade will
not be disappointed.
Of late, Protel has been getting high marks in customer satisfaction; they
done a great deal that they did not legally *have* to do. They didn't have
to make the SE release free, nor did they have to make CAMtastic free.
These were major unexpected customer benefits. We've been led to think that
we may get a major autorouter upgrade as part of the next service pack,
i.e., free. If that happens, that too will be a major benefit.
Free service packs fixing bugs -- excuse me, "issues" -- are not in the
same category: they are *necessary* in context (the promise of free support
without maintenance charges).
[EMAIL PROTECTED]
Abdulrahman Lomax
P.O. Box 690
El Verano, CA 95433
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