Don't run a lifetime deal
..or at least don't offer a lifetime deal for too long.
Recently I worked in a business where we initially ran a lifetime deal (for almost 1 year). We ended up getting a TON of people purchase. We had multiple 6-figure months in revenue and all was going great.
When we switched out of the this and into recurring prices, things changed. We started realizing that our lifetime deal buyers were people who purchased because they only believed that "they would need this tool in the future" and their activity within the app was next to none.
I also attempted this with my own project and had quite a few sales. I only recently switched to recurring memberships and noticed similar drop-offs.. glad I switched out sooner rather than later.
The big takeaways I've learned from this are:
- a lifetime deal can attract the wrong types of buyers
- It can give a false sense of financial stability
- It can give a false sense of product market fit
- It can help make a lot of sales in the beginning but you have to keep selling new customers while receiving no more recurring revenue from current customers
Hope this insight helps someone out here
@JPere good takeaways!
With the caveat of understanding the kind of problems that come with a lifetime deal, I like them as a way to generate cashflow.
I agree that they might not attract the best type of customer to help you find product market fit, but in the end most businesses fail for financial reasons. IMO get that cash in the door and then use that money to help figure out how to make your product better / find more engaged users.
As a developer, one of the biggest problem with lifetime deals is having to maintain a particular version of a product. This is all well and good on mobile and desktop apps since you can just bump the version number. But for web apps, which are constantly evolving and don't necessarily have any sense of "versions" you end up having to feature gate things which is time better spent on building awesome new things.
The main reason I haven't done one is that the incentives aren't right.
My subscription users can cancel anytime they want and that forces me to keep providing what they want. In the short term, that's hard. In the long term, it makes my product better.
Completely agree. It's definitely not a good play when trying to build something for the long-term
I also wonder if you are obliged to run your app in perpetuity after you have promised someone lifetime access and took their money
I'm not certain but It's probably just lifetime of the business. If the business fails then that's the end of the offer but the messaging has probably got to be clear in the terms of service
This is wise shit.