Blue Jeans are a great company with a great product, however we need to check some commercial basics depending on whether we are a reseller or end user.
1. Make sure you are not signing the customer up on a Blue Jeans license agreement!
2. Why? The agreement reserves the right for Blue Jeans to take the client direct and approach them prior to renewal.
One Years Revenue
3. Why is this an issue? One years revenue margin or commission on a customer is not exactly generous, there are vendors that offer evergreen margin and commission.
4. The rule of 78 and 666
This is a simple piece of mathematics that calculates the revenue you will make in a billing or budget year.
It works like this:
December you sign a client you’ll get 12 months billing in 2019 assuming your billing monthly.
January 11 months, February 10 months, March 9 and so on which if you add them up comes to 78 billing months. Assume the product is $99 a month you’ll make $7800 that month.
With Blue Jeans therefore in year 1 you’ll make $7800, the same in year 2 and 3, because each year you’ll lose the previous years revenue.
Evergreen margin and commission means that in year 2 and 3 you carry over the previous years revenue and add the new revenue and more.
Example with evergreen margins and revenues in month 12 you have $1188 a month that will bill for 12 months of year 2 $14,256 to add to $7800 you sign in year 2.
At the end of year 2 $2376 a month that will deliver $28,512 plus the $7800
You can make 3 years of $7,800 with Blue Jeans
So the billing months are either 78 times 3 years times $99 = $23,400
666 times $99 or $66,168 with Evergreen margin and commisssion
With vendors who pay Evergreen you can build a business.
End Users - Flexible Terms
5. Flexible terms are key however what do we mean by that? Here are the practical terms to check.
A) That you can sign for monthly as well as annual subscriptions.
B) That you can buy any number of virtual meeting rooms and there are no 10 room minimum order levels.
C) That low volume users can have Pay As You Go rooms, where you pay by the minute not a full subscription.
D) That you can migrate users from Pay As you Go to Subscription at any time if they end up spending more than a subscription to cap costs.
1. Own the Customer sign on your agreement
2. Secure Evergreen margins, revenue and commission so you can build a business.
3. Secure Flexible commercial terms
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