4 ways subscription pricing helps farmers | AgriWebb

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4 ways subscription pricing helps farmers

4 ways subscription pricing helps farmers

Why tech-savvy producers are embracing a new way to pay for farm management software.

In all the hype around agtech, there’s one subject that doesn’t get much airtime: paying for the actual technology.

It isn’t as picture friendly as robots harvesting fruit or drones checking dams, but it’s one of the most important factors for farmers.

Any capital investment has to be considered carefully, even in good times. If a farmer is battling drought, it’s imperative they see a return on their investment – and fast.

On the software front, there have been significant changes over the last few years. The hassle of paying a huge upfront fee for software is going the way of the floppy disk. Today, it’s much more likely that you’ll be offered a monthly or yearly subscription fee.

That can be a daunting prospect for people unfamiliar with the concept: “What! You mean I have to keep paying to use my software, again and again!” In reality, it means you have the convenience and flexibility of subscription pricing already seen in everything from mobiles and streaming TV to your copy of The Land newspaper.

Once you delve into the subject, you’ll find the subscription payment method has several benefits for the buyer:

There’s less financial risk for the buyer!

In traditional payment methods for software, you fork out a lot of money upfront for a “lifetime license”. That’s a serious commitment, which is very costly if the software doesn’t deliver what you were looking for.

You can be left with three options. You take the financial hit as you look for another solution. You persist with dud software – which might cost more in the long run. Or you or abandon farm management software altogether, and never discover the dividends it can bring to your business.

A subscription model has a much lower initial cost that means if software isn’t working for you, any financial grief is minimal. It also makes it easier to assess the value of your investment; you don’t have to persist with it for years to learn if it ever pays off.

Software is kept up to date

Long gone are the days when you loaded disks onto a computer to update software. Now it’s something that can happen seamlessly in the background of operations. But it’s still down to the software provider to ensure necessary updates are delivered promptly.

Companies that ask for full upfront payment won’t be in a hurry to make sure your software delivers the best services possible. Any update will be focused on getting more of your money rather than improving a product you’ve already paid for. And when there aren’t regular updates, you can be left with obsolete software – “shelfware”, gathering virtual dust – as computers and mobile devices change.

With subscription pricing, companies are keen to maintain your business. That means your software is continually updated to deliver optimum performance and that new features can be rolled out as a matter of course.

subscription based pricing benefits customers because of constant upgrades and customer focus

You get better service

Have you ever tried getting in touch with a company when something goes wrong with machinery (and they already have your money)? It can be maddening: after going through a maze of call centres, you’ll find yourself filling out an online form for a “help desk” that exists in name only.

You can expect a similar experience using software bought with a lifetime license; you’ll be waiting a lifetime for help. The company isn’t motivated to assist you since you’re locked into using their product.

A subscription payment model ties in with the growing philosophy of software as a service (SaaS). Companies that want to stick around will have a dedicated and well-staffed help desk or success team to ensure your experience with their software is a rewarding one. They know if it isn’t, subscriptions will be cancelled and their business won’t last.

You’re empowered as a customer

As the previous points have touched on, subscription pricing means that a company has to win your business, and keep winning it.

Think about it like this: building and selling software might cost a company an average of $3000 per customer. In the traditional payment model, a company could sell you a lifetime license for $5000, make an immediate profit, and then never have to worry about keeping you happy. If you stop using their product in a year, they still keep their money.

Instead, if a customer pays $150 per month, the company has a powerful incentive to prove its value. It needs you to continue subscribing for 20 months just to break even.

From then on, the company will be motivated to keep you as a client, which means ensuring you continue to realise value from their product. In a sense, they’ll become a paid-up supporter of your business.

So, what subscription fee should you pay?

Well, that’s the million-dollar question. Unless you’re paying by subscription, then it’s a more manageable series of hundred-dollar questions.

When it comes to farm management software, the right product will deliver far more value to you than you’re being charged on a monthly or yearly basis. That value comes in many forms:

  • Saving weeks of working time that you can spend on your business or with your family
  • Helping you make a decision that improves your productivity or bottom line
  • Helping you get compliant for a quality assurance scheme and receive a premium when you sell
  • Increasing productivity and allowing you to run and sell another ten head of cattle

The main thing to remember is that as pricing models have changed, the responsibility to deliver consistent value has shifted to software providers. You don’t need to be afraid to get started as the benefits far outweigh the risks. And if they don’t, you can cancel and change to farm management software that delivers.

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