I am Nick Shevchenko - a founder of WeLoveNoCode. Recently we have abandoned the hourly-based payment model and switched to the Subscription. In this article I wrote about how we came up with this idea and why the subscription model is a Win-Win game between us and our customers.
Since the main values of NoCode Development are low prices and short timings, we began to think about how we can make this process even faster and cheaper.
We conducted a small research on our processes and underlined 3 major problems of the hourly-based payment approach. I listed those problems below and clarified how the subscription model solves them:
Problem 1: Volatile productivity and efficiency of developers
During the development process, the developers often have questions that required a prompt response and clarification from the client. Sometimes clients did not respond for several days, which significantly reduced the developer's productivity because of downtimes.
In a subscription model, developers work in a more efficient way:
If there is a delay in communication with a customer, the developer helps his colleagues with another project exactly until he receive the response for his main project.
Thus we managed to eliminate the downtimes in the work of our developers
and reduce the Average Development Time by 35%.
Problem 2: Lack of permanent technical partnership for customers
Four months ago we noticed that about 70% of our customers come back to us after they launched a product we made. And there are only 2 reasons for their comebacks:
1. Their business was growing and they wanted to add new functionality to their product
2. After a quick launch of one project, they came to us with a new project or idea.
Based on this information, we came to the conclusion that the majority of customers in the design and development industry need a constant and stable technical partnership, since the world and ideas are constantly changing and often business is not limited to one project.
An addition to this problem is the fact that changes to a technical product can be made by the person who created the original product much more quickly. In order to change and modify an existing product, it is sometimes easier for new developers to simply do everything from scratch, because learning and changing the product “for themselves” takes a lot of time and resources.
Complex development subscription gives customers a reliable and ongoing partnership. During revisions and re-collaboration, the developer is well aware of the product structure and customer preferences, because they have been already working for a while.
Problem 3: Negotiations and estimation take a lot of time + excess paperwork.
During our work with the hourly-based payment principle, we had to spend time discussing the project with the customer, for estimations, as well as for preparing a large number of documents. Since the development began only after all the details and paperwork had been agreed upon, we wasted unnecessary days and even weeks instead of immediately starting to develop the project.
After doing internal research, we saw that project estimation and preparation of documents take about 50% of the total project timing.
So we decided to completely remove these processes and create a subscription model - without documents, estimations but with increased efficiency. In subscription, our relationship with customers is similar to employer-employee relationships: We just receive a task and start doing it with daily reporting - just like in-house developers. Without any restrictions or delays.
In three months of our work by subscription, we really managed to eradicate the above problems and become more efficient.
Developers don't waste time on unproductive actions anymore - they just take a project and immediately start working on it. Moreover, now our customers can refine their ideas and implement new ones right after their previous project is done.
In our opinion, the subscription model can be a revolution in the entire IT outsourcing industry.