Customers sometimes ask us why we use recurring subscriptions when selling products here at Joomlashack. I decided to write an explanation of why do this. Below you'll find a short and a long answer to this question.
The Short Answer
Recurring subscriptions are the best way to build a sustainable business in 2019. Companies that do not use recurring subscriptions are much more likely to fail. The result is unsupported code and disappointed customers.
The Longer Answer
It's not easy to build a strong and sustainable business. That's true whether your business is in construction, retail, food, farming, or any other industry.
It's definitely not easy to build a strong and sustainable business in Joomla. The platform is over 10 years old and the user-base is active, but not growing quickly.
However, over the last two years, we've managed to grow Joomlashack. Yes, we have some good extensions and templates, but one thing has made that growth possible: recurring subscriptions.
Here are six reasons why subscriptions are an essential part of providing you with great products and services:
Reason #1. Subscriptions cover expensive development
We only hire staff in North America, South America and Europe. We don't send work offshore. The result is that our wage bill is high. Each support ticket costs us around $15. Each feature request can cost $100's or $1000's.
Extensions and templates require continuous maintenance and development. Our team needs to upgrade the code for every new Joomla version, even the minor ones. We are also constantly updating them to work with other Joomla extensions, to fix bugs, and to meet the needs of third-party services such as Google and Mailchimp.
Reason #2. Subscriptions mean lower prices
If you pay $40 for an extension, we're probably not making any money on that transaction. We only start to grow and make a profit once a member has been with us for more than 1 year.
The alternative to recurring subscriptions is a significantly higher upfront cost.
Reason #3. Subscriptions allow us to compete with SaaS
The main competition for Joomla these days is software-as-a-service (SaaS) services such as Wix, Weebly and Squarespace. Those platforms charge $30 or more per month. That gives them a big budget to add new features and provide support. If we're charging a one-time fee of $40, we're going to get left behind and beaten.
Reason #4. Subscriptions allow us to hire staff
Joomlashack is growing. Looking ahead, we want to make Joomlashack even more useful for you. We want to:
- Give you better products with better features.
- Have your products ready for Joomla 4, on the day it’s released.
- Answer 100% of your support tickets within 3 hours.
But, to make that happen, Joomlashack needs to hire developers and a bigger support team. To hire extra staff, Joomlashack's business model needs to be predictable. How can you hire more developers if you can't predict your revenue in 2 or 3 months time? Recurring subscriptions are the only way to be able to accurately predict your revenue.
Reason #5. Subscriptions allow us to support free code
Here at Joomlashack, almost all of our products have free versions and we provide support for them. All our code is on Github. That's only possible because of the support of Pro members.
Reason #6. We've seen the results from one-time sales
Over the last few years, we've been fortunate to takeover and acquire several other Joomla companies. Many of them had one thing in common: they did not use recurring subscriptions. Those companies attempted to build businesses on one-time sales. That business model did not work. The result was unsupported code and disappointed customers.
What if I don't like recurring subscriptions?
That's understandable. If you don't like recurring subscriptions, you can continue using the extension or template even after your subscription expires. Plus, there are no per-site licenses, so you can use one subscription for all your sites.
We also promise to treat you fairly. We're upfront about that fact that we use recurring subscriptions, and always give refunds if you forget to cancel a renewal.
Thanks for taking the time to read this. Whether you're in favor of recurring subscriptions or not, please feel welcome to leave your thoughts in the comments below: