If I understand you correctly, you're saying a customer agreed to pay you for services (product and/or support), either through posted prices and a shrink-wrapped license or through a written contract, and then you provided those services, and then they didn't pay?

And you're asking whether it's "OK" that they didn't pay?

Of course it's not OK! Is there any business who could operate in that fashion?

The way it affects the customer relationship is you don't have a customer relationship. You have a situation where they are taking advantage of you. A relationship goes in two directions.

I agree with Jason. Of course, it's not OK. You provided a service/support and deserve to pay. Only in the situation when an organization, regardless of industry, doesn't deliver on their promises would this be a question.

The best strategy is to agree on a (free) post production support period prior starting the contract with client. Our company, for example, is providing a free one week post production support after deploying the software product in the market! For future services/support including bug fixing and enhancements you can continue with hourly based cost model!

We can schedule a call for specific cases for your convenience and would be glad to give a feedback/suggestion!

I definitely think that is ok to do.

According to me, you should once send him a mail showing that if he will not renew the service and support contract, then it will cost him higher than regular rates or get delay in receiving service. along with it may happen that he will not get any kind of help from side.

And same thing you should talk on phone call keep the copy of recording of conversation. It will help when clint will blame you.