Offer a monthly subscription AND a lifetime licence?
Hi all!
I currently offer a monthly subscription (with the option to pay annually to save 10%) for my side project. While I'm getting sales, I'm not getting the kind of growth I'd like.
If, for arguments sake, my current lifetime value (LTV) for the monthly subscription users is $50 and I offer a NEW lifetime licence at $250, would that simply be a no-brainer? My ongoing costs are minimal so I'm not concerned about that.
I know there are lots of people (me included) who would prefer to pay a larger, one off amount to fully own something, than paying an ongoing monthly fee. Without offering a lifetime option, I'm missing out on a potential pool of customers that I'll never be able to entice with a monthly subscription.
As my lifetime licence would be 3/4x what my current LTV is, is this a good idea?
p.s. for context my side project is: https://getloaf.io/
Really cool idea and nicely-designed website! I'd give you my advice because I'm also considering a lifetime license for my app timeivy.com
My thinking is that if your LTV is $50, you could push that a little bit higher for a lifetime license. But not up to $250.
Being totally honest with you, I'd find it hard to believe that anyone would pay that much. Especially, if you consider that, fully-featured design software such as Sketch charges $99 for a perpetual license (optional renewal).
How much that "push" would be? That's up to you to experiment and play around until you find the sweet spot.
Thanks! I appreciate the honest feedback. Yes, $250 was just an example figure, it would likely be lower. Also, I'm not going to try and compare my product to something like Sketch, they are solving very different problems.
I guess the question is, what is that formula? LTV x 3 = lifetime licence price?
Yeah, sorry, I didn't mean to compare your product with Sketch. It was just an example since I took literally the $250.
Regarding how much, there's no formula. What I've seen from my experience is that it's usually a little higher than your annual plan.
The idea is to try squeeze a little bit more revenue and give a better deal to customers that pay in advance. So if your LTV is $50, your annual could be let's say $65 (squeeze a little more) and your lifetime $90.
These are just sample figures, of course, you'll have to experiment.
Finally, keep in mind that if you're losing customers at $50 atm, you'd still get a little more money with those numbers. Good luck and please, if you change your price, keep me updated with how your experiment went, so I can learn as well.
Yup will do :)
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