Know-How Exchange : Strategy

I think JB has nailed it, and Gary certainly confirms it, as do I . Unless you have some kind of WRITTEN and/or traceable documentation that clearly states the use of the software was intended for temporary/trial use, you are stuck in the mud.

Now Since this person is still a client, do they provide any retainers for other services? Have they been advocates of your firm and sent you other clients who DO pay for the software? Basically, I'm suggesting you look at whether or not you have seen some kind of return for allowing free use. If so, can you drop it?

Now, cutting them off as a client may be your only way to show an end to the original verbal agreement. Of course, the consequences are obvious - no more client, less revenue, one less advocate, and now you would be paying a lawyer (or moderator) several thousand dollars to fight with an even more disgruntled entity.

The other side of the coin, if you threathen to deactivate the software somehow (and actually do it), and this harms THEIR business, YOU will be the ones defending yourselves in court.

The only other way I can think of at the moment would be drop the issue for now and implement some kind of software upgrade that requires a product key or code (or something only the paying clients possess) in order to keep the software activated. It has to be corporate-wide...something cheap and easy...and HAS to be required of all your customers. Perhaps a new "Security Patch" or the like. Give the "free" client notification that they will need to buy the software in order to get the "update", or everything stops running.

Now if you do not operate on an ASP model, and the users can simply install it and use it. There is still a way. You mentioned 20% in lost maintenance fees. This implies that a service tech still goes out to thier facility. Have the service tech install the "patch" on his/her next call (and make sure EVERY customer gets the patch as well). The patch will have a 30-day "self destruct" bug if a product code is not entered (or something else only the paying clients possess). Make the reminder pop up on every screen for 30 days! With the other clients, the tech simply installs the patch and immediately de-activates it with the client code. With your "problem", they are now calling you asking you to fix it. You can defend yourself by saying EVERY client had the upgrade and the policy is universal.


This "patch" could be just enough to legally qualify as a patch (it could be a new font option or password protect screen...something EASY and cheap for the programmers to create and duplicate). Going about it "on the sly" may be cheaper than hiring an attorney, losing a client, and risk getting sued yourself.


Of course, if they bring you a lot of business, let 'em keep it and write off the loss as a business expense (and this will justify lobbying for a bigger Christmas bonus )!!!

Something to chew on. I hope this helps!