23 Comments

  1. Canoode
    · Reply

    The best model imo is:
    – One time payment with life time license to use the product.
    – 12 months support
    – 12 months updates for the new version.
    Once the 12 months are over: you can continue to use the product but you can’t update to the latest version and no support.

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    • Anh Tran
      · Reply

      What you said is license for usage, while most users expect (or think) license for updates (may or may not include support).

      With 12 months of updates and support, it sounds like recurring model to me than one-time payment.

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    • Marco Almeida
      · Reply

      I use a similar model but, I do allow for renewal.

      – First payment with life time license to use the product
      – 12 months support
      – 12 months updates for the new version
      – No more updates after expire but the product will not stop working
      – Renewal payment (about 60% of the first payment) for support and updates for another 12 months

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  2. Andre
    · Reply

    I’ve tried many combinations over the last 10+ years, but there are many variables involved; things to consider. Here are a few examples.

    how many products do you sell?
    how often are they updated?
    how often is support needed?
    does each product require a lot of ongoing maintenance?
    is the market saturated? (which it is)

    With themes, I’ve seen single theme purchasing, memberships (access to all), recurring subscriptions, and even a combination to give the customer the option when they visit your website.

    However, there is one more that I’ve seen with a couple of theme shops where you pay a setup fee and then you pay a monthly subscription to maintain updates and support. Not to name any names, one site charges around $35+ as the setup fee, then it recurs monthly at around $8. In a year, that is over $120. I guess the idea behind this is that it gives the customer the choice of when they are confident enough to cancel without the need for updates or support.

    There are a small few who offer free themes but charge a fee for support.

    Many models for a plugin or theme shop to adopt, but one needs to answer those questions I listed above. Then there is also what the shop owner feels is best for their website.

    For Rough Pixels, I’ve been running with single theme purchases (good for a year), as well, offering a couple of membership options. I do this because there are some people who simply want just 1 theme while others want the choice to easily switch to another theme from the choices they have all rolled into one package.

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    • Florentine
      · Reply

      of when they are confident enough to cancel without the need for updates or support.

      With current WordPress release schedule including many Gutenberg related changes and many additional ideas and here and there even a few fixes on regular/rapid basis, it is not possible to simply cancel theme-support any longer.

      The only “solution” is not updating WordPress core, which can be seen at a lot of a bit more complex sites already. People stop updating because their “ready” and well-paid site simply broke after some update and they had to hire the dev a second time to get it working again. Those people “learn their lesson” quickly, no updates = no extra costs.

      Also quite some plugins stopped development/compatibility notice after 5.0.x or a little later, unfortunately plugin repository has no real working search for those features/requirements, would be interesting to have more insight there.

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  3. Marcus Tibesar
    · Reply

    The longer you use WordPress premium themes and plugins, the more discerning you become as a customer. Customers only have a limited budget, so they are forced to thoroughly evaluate purchasing any theme or plugin ESPECIALLY on a recurring basis. If that plugin doesn’t offer REAL value and quality; it’s not going to populate too many arsenals.

    We tend to purchase lifetime licenses once we know for sure the plugin meets these criteria, and we are confident in the developer and how they conduct business. I believe the developer should focus intently on the plugin, support and updates and not sweat the pricing.

    I have noticed also that the more successful a plugin shop becomes, generally their pricing go up. Sometimes way up forcing existing customers to look at alternatives. Also, these bigger plugin developers tend to get sloppy and start ignoring their existing customers; ie. not announcing price hikes; announcing price hikes almost on a yearly basis; not fessing up to breaking a plugin; loosing all of their customers’ accounts; making unauthorized changes to the customer’s data, etc.

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  4. Colin Newcomer
    · Reply

    Having a discounted license to renew support and updates after the first year seems fair to me. If you want a developer to continue supporting a tool, you should be willing to chip in so they can continue working on the product, as long as you can continue using the version you purchased if you don’t want to renew.

    This stuff with some self-hosted plugins moving to a SaaS monthly pricing model is ridiculous, though.

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  5. Ed P
    · Reply

    The problem I have with the annual subscription model is that you have no idea what, if any, new releases will be issued during your subscription period. Developers make no guarantee. And if the renewal price is exactly the same as the initial purchase price, there is little incentive to renew.

    I’ve often purchased software based on this model and have received only 2 or 3 minor updates in the year. Then at renewal time, I’m expected to pay full cost again. So, I rarely do this. Most plugins will work for at least a year without updates so I typically buy a year, skip a year, buy a year etc.

    The way I look at it (as a developer myself) is that the initial purchase price should cover the cost of developing the software and the renewal price should cover the cost of updates.

    If renewals are adequately discounted and I have received a decent number of meaningful updates in the previous year, I keep my subscription running.

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  6. Adam Charles
    · Reply

    I believe that the best approach is a combination of:

    A fairly high “Lifetime” support/update licence, for those who have decided that the product is indispensable and who, therefore the are willing to pay upfront to make a long-term saving. This gives a useful boost to cashflow in the short term.

    An annual support/updates plan where any discounting is concentrated on returning customers rather than attracting new ones. If renewals are discounted by a significant amount, then you give your existing customers a powerful incentive to stay, and avoid dropping out of the system and having to pay full price to come back in. Also, for a long term business model, don’t we want to reward our most loyal customers?

    Additionally, you could apply a discount for the lifetime option to any customer who has been with you for more than a certain period.

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  7. David McCan
    · Reply

    I think one crucial piece of the pricing puzzle is how much ongoing support is needed. If the theme or plugin typically requires a lot of support then the business is going to need annual subscriptions to cover it. However, if ongoing support is minimal then one approach is to gauge the average lifetime of a customer and price your lifetime package slightly higher than that.

    Since lifetime plans are attractive to buyers, offering a lifetime option the first few years and listening and responding to customers is a good way to build a fan base. If the plugin is something that benefits from integrations with 3rd parties, then having lots of customers asking these 3rd parties to help integrate the new product also helps to get established.

    I believe that keeping WordPress, themes, and plugins updated is essential, so “lifetime usage” without updates feels misleading to me and isn’t really as attractive as it might seem to new users.

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  8. DonHx
    · Reply

    My view is to NEVER buy a product with a recurring payment. There is never a guarantee that the product will be improved enough to warrant an additional payment.

    Thus, I always consider a recurring payment as the “Lazy developers guide to riches.” It’s scammy because it requires no marketing. Developers hope and pray you’ve forgotten so they can continue to ding your credit card full price for no changes or inconsequential changes.

    If you want my money, sell me the product at a fixed price. Later, if you can convince me that the new upgrade is really better, I’ll happily pay for the upgrade up to 50% of the original purchase price.

    My personal policy started with Adobe. I bought and paid for upgrades when warranted for decades. But when they switched to a subscription model, I just used my older versions. Now a company called Affinity has advanced, superior image and publishing software for less than $50 each, and I am thrilled did not buy into Adobe’s subscription model.

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  9. Jim Disbrow
    · Reply

    In my opinion it boils down to service. I use subscriptions for themes, plugins, and content. In return I expect “bugs” to be corrected in a timely fashion. For awhile I was using Divi on new sites. I just dropped Elegant Themes over the bouncing footer and other nonsense they failed to correct in the last few years. A few months is acceptable, but when I am dealing with the same issue for years that’s a problem.

    That should be a heads up to any developers. If I wanted to modify code I would create my own custom theme. I pay you so I don’t have too.

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  10. Tunde Sanusi (Tuham)
    · Reply

    Recurring payments are great ways of monetizing as a developer as it allows to grow a product..

    However one should focus on the value the product is gonna give

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  11. Steven Gliebe
    · Reply

    Most sellers choose a model available for them to implement easily. First, it was one-time payments then with Easy Digital Downloads we saw renewals become common and eventually automatic renewals. If EDD or some other solution were to make it straightforward to sell access to new major releases then I think we’d see adoption of that model too.

    But, I’m not sure it’d be as good for business because repeat payments would be manual and irregular. I’d expect more initial sales but with repeat revenue reduced. What has become clear is that people will continue to pay for what they continue to use and especially if they use it frequently and renew automatically. Developers should consider what type of product they’re making.

    I’m going to toy with a monthly payment option via Chargebee for a new plugin. Annual subscriptions will be discounted. Agencies will be able to scale the number of sites up and down at will. Non-renewal may disable the ability to add new items. This approach is not something out of the box solutions accommodate but I think it could boost both new customers and renewals.

    Freemius is the only ready to use solution I’ve seen that has toyed with models like this that would be considered “alternative” in the WordPress world but not elsewhere. Vova Feldman shares some valuable insights on the Freemius blog.

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  12. Diana
    · Reply

    My favorite model as a small-time implementer who provides free services to a few tiny non-profits and donating most of the premium plugin costs:
    Lifetime license with security & minor updates
    Pay for support, 1-3 months at a time

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  13. Sajan Kota
    · Reply

    Hi Justin, Thought provoking blog post. I feel that WordPress themes and plugins should not be charged a one time fee as WordPress themes and plugins should be updated regularly with new features and functionality. It is true that from a business perspective, companies can sustain by charging their customers a one time fee. It becomes very difficult for them to support the existing customer base without releasing and selling new products on consistent basis. By charging a recurring fee on themes and plugin businesses will be able to develop new products and themes without too much depending new sales to financially support the new staff.

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  14. Keith Thompson
    · Reply

    As a one time operator of around 100 WP sites I then found the annual fee model acceptable as I had a revenue stream. Now as a retiree writing my own travel blog (https://alloveraustralia.com) I can’t afford to keep paying renewal fees for plugins etc. on any regular basis. I have a lifetime license for Divi having tried other page builders and that suits me; some of my other plugins I have stopped using and found alternatives, notably in mapping, because of this issue. The bottom line is that the different user needs have to be considered in terms of affordability; if we are using a good quality product it gives credibility to the provider and we are likely to recommend the product; eg I have a link on my blog to Siteground simply because they are the best hosting company I have found in ten years.

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    • David McCan
      · Reply

      @Keith Thompson, very good points. There are lots of people who have little money to spare: teachers, amateur historians, poets, gamers, artists, retirees, people with a passion project, etc. Sometimes we forget that not everyone is creating a site to make money. They may find a lifetime license easier to reconcile (or be thankful for a generous freemium level).

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  15. Christina Warren
    · Reply

    I like the Sketch model. There is an annual cost and during that year, I get access to the whatever versions are released. If I don’t renew, my version is “frozen,” but I can keep using it as is. Most traditional software that uses this approach will also still provide emergency updates for major security vulnerabilities, at least for a certain period of time. For a plugin or theme, I’m a firm believer that major security vulnerabilities should be patched regardless of subscription status for x major versions, just because an unpatched website can affect more than just the site owner.

    I don’t like the recurring model for my own use cases, which are mostly just side projects, where I don’t need support — but I understand this is the sustainable model. What I’m less comfortable with are plugins that will stop working without a subscription, even if the “service” component of the plugin is non—existent or inconsequential (I’m thinking a backup plugin where you aren’t using the plugin provider’s storage or a contact form).

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    • Justin Tadlock
      · Reply

      I concur that major security issues should be a free upgrade.

      I wonder if current software that devs use for selling (EDD, WooCommerce, etc.) can handle that sort of thing easily, such as provide a downloadable file after a subscription is up. If not, perhaps there’s an add-on idea for someone to build.

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  16. T Piwowar
    · Reply

    The first thing I look for when evaluating software are the terms of sale. If I see a subscription model I immediately reject the software. My issue is not the cost, but the relationship between user and seller. A subscription model creates an incentive for the seller to do as little as possible to maintain or improve their software because they can rely solely on eviction to maintain their revenue stream. The seller’s incentive is to make their software as difficult as possible to remove without creating damage. I will not put myself or my clients into the hands of a slumlord.

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  17. Bill Bennett
    · Reply

    Most of the time I avoid subscriptions for three reasons.

    First, they tend to come with a nasty lock-in. I have a subscription to a small business accounts package. It is near impossible to extract data and switch to a less greedy alternative. So I’m stuck.

    Second, the cost is open-ended. The software I mentioned above has raised its prices in both of the last two years at a rate far higher than inflation. It knows because of the lock-in, people have little choice but to pay the extra.

    Third, the other incentives are all wrong for the developer. There is no need to provide an adequate level of support.

    Another point is that most subscriptions are too high. You’d expect to pay less than for a one-off. That’s rare.

    The only subscription I’m happy with is Microsoft Office, which sells four licences for around New Zealand $125 a year. Or ~NZ$30 a pop. That’s a relative bargain, I’ve seen apps that offer less than one tenth of the functionality sell for two or three times that price.

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  18. Richard Clement
    · Reply

    Wherever possible I always buy a lifetime license even if it costs a multiple of single year. I look after digital for a major corp who have elected to standardise on WP and my expenses have become an admin nightmare with literally hundreds of plugins etc being processed annually. It would be nice to have a central ‘plugin store’ that can manage the billing and send out one invoice monthly or annually for all the plugins we use. Im not looking for a way to save money – I believe that devs should be well rewarded for their work – but the current system is a nightmare for agencies and corporates.

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