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💰 Is LTD a good business strategy?

I want to get into using LTD as a business strategy.

Most businesses started out with two main challenges: getting customers and generating revenue.

A LTD is an offer / business strategy when you sell your product at an upfront price, for a lifetime. There is no recurring charges that your customers will pay, and you will have to maintain the product/service for a 'lifetime'.
 
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The Good :

  1. This startup thinks that the exposure on a LTD platform (Appsumo, who has over 1.8 million email subscribers) is too good to turn down. They sold $160,000 in two weeks.

  2. Drove excellent product feedback; this startup believes that the initial customers help them to develop their product better and faster than their competitors.

  3. A great strategy to get your first customers and some cash flow coming in. This startup shared that " Getting $89 per sale means 9 months of revenue for my startup".

The Bad:

  1. No recurring revenue. Most SaaS thrives on the monthly or yearly subscription fees to help them to develop/maintain their technology.

  2. Platforms like AppSumo takes a large chunk of your sales. This startup made $214,500 in sales but only pocketed $64,350 as 70% of the revenue goes to the platform.

  3. Lots of headaches; this startup shared the following: " it’s almost impossible to onboard thousands of people to your product within a couple of weeks. Customers who are not supported on time can mob you on many platforms. You can get several times the good reviews you received during the campaign as bad reviews. "
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You can check out more examples of case studies under this strategy type at this free Airtable database here.

Verdict?

In my opinion, I see LTD as a marketing strategy to get your first group of customers. Most LTD involves SaaS, and not charging your customers a recurring amount of money for a SaaS business is too much for me (costs of upgrades and keeping up with tech).

Love to hear what others think of this strategy.

  1. 3

    One thing nobody every talks about is the fact that many LTD sites place restrictions on you as part of the deal on the back end. For example, making changes to your offering, pricing, or working with other deal sites for a period of time. Not terrible, just something to be aware of going in.

    Also, if you're a SaaS primarily focused on monthly subscriptions, think hard about whether an LTD is setting up skewed expectations for a batch of new customers coming in under the deal. People who want/buy an LTD are very different (bargain-hunters) from potential customers coming in with the expectation of recurring fees (service-hunters).

    The LTD seekers often don't go deep into your service before grabbing the deal, which can also result in customer support challenges after the fact.

    1. 1

      This is very valuable info that I don't find many talking about it. Thank you !

  2. 3

    This aligns with my experience. Adding my product to the AppSumo marketplace has added an extra $1k/m in sales. I've done a number of LTD offers to private FB groups as well. Last week one brought in $2.5k in two days. It's a great way to get revenue now that you can invest back into building your business, but probably not the best long-term strategy.

    1. 1

      Why can't it be a long-term strategy?

      You personally admitted it has brought you revenue, great revenue upfront, that you wouldn't have otherwise obtained.

      As long as the pool of LTD buyers don't run out, you can definitely keep using the LTD strategy, certainly throughout the lifetime of your product.

    2. 1

      Thanks Gabe for the valuable info. If I could just dig deepter into the LTD deals with private FB groups, what was the process like and how was the revenue split?

  3. 3

    It depends on the products and on the margins.

    LTD is a great way to get some exposure and get referred by LTD users to gain MRR
    It also give starting resource to improve the tool.

    On appsumo you do bigger numbers but also you left a lot on the table. Pabbly did LTD for themself and they got 1M, to get the same money on appsumo they would have needed 4x the sales.

    Many LTD buyers just want LTD, so they will be hard to convert otherwise.

    Yet, if the products is really good it can be lost MRR.

    I think it's worth if LTD custumer are just the starting point, the first few % of users, otherwise the product will go bad and you'll have the reputation of an awful founder and ltd scammer.

    1. 1

      Pabbly did LTD for themself and they got 1M

      I wonder how much in MRR did they lose?

      It's probably impossible to know, but it's certainly interesting to speculate.

      1. 1

        Probably none, they were launching the product, they get sales that are worth a year of paying customer, which may never actually use the product, and they got money to boost development and teams and positioned themself as an alternative to zapier.
        Running LTD with an established userbase might be bad.

  4. 2

    You don't need to use AppSumo to offer a LTD.

    You can just offer it yourself in your product.

    That takes care of 2 of the bad.

    I definitely offer LTD options in my product for each plan.

    The pros outweigh the cons.

    As long as LTD price > LTV, you're good.

    1. 2

      Appsumo has 1.8 million subscribers. The main reason for offering a LTD is to get your product that kind of exposure, no?

      1. 1

        appsumo take 70%, you do more sale, but to get the same amount of money you have to do MUCH more sale, and handle much more customers, unless you are a big corp already that's not advisable.

      2. 1

        Oh yes. Definitely worth it.

        Maybe even submit to multiple app deal sites if AppSumo works out.

        I'm talking more about offering LTD as a pricing option in your own product as well, alongside an AppSumo deal.

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