Thought on lifetime deals?
After reading Danny Postma post on his recent launch, it got me thinking about offering a lifetime deal on TaskBill.
I realize this isn't great for the long run but I'm currently at the stage of trying to onboard our first set of customers to get some feedback. I figure giving up the recurring revenue on the first set of customers would be worth it if it gets more people to give our product a try and hopefully build some advocates for new customer who pay monthly.
Has anyone had any great success or failures with offering a lifetime deal?
Thank you all for the feedback everyone!
I'm thinking the best option is a lifetime plan that still has an upgrade path. That way you are still giving people a reason to sign up for a good deal but down the road there is a chance to convert them to a recurring paying customer.
I have always been against them since you lose out on that recurring revenue, but I decided to try it recently with one of my products (https://www.retrospect.team/) and it worked quite well. I'm only offering it for another 2 months or so and then will switch back to a yearly plan, but it did generate some "quick" revenue (Roughly $1,300 in a month).
With that said, I think it totally depends on your product. If you have significant overhead to run the site/service/storage, etc. then lifetime option probably isn't a good idea (at least not long-term). My site costs me like $10/mo. so it's a pretty minimal cost of me to run so a lifetime account doesn't bother me.
My "guarantee" for a lifetime account is a guaranteed 5 additional years from the date I announce that I'm ending the service (if I ever do). That way there is some clear expectations as to what "lifetime" actually means.
I think lifetime is great when just getting started, getting feedback and your initial traction. After you get your first batch of customers it's best to switch to annual.
For website hosting it sounds like a pretty bad idea, but for other tools it might not be a bad idea. This is how I think about it:
Calculate the costs of the “worst case” and include anything that isn’t automated and requires your work.
If the service is fully automatic then it doesn’t “cost your attention”.
If you sell 100 lifetime plans for $50 each it would mean you made $5000. If the monthly cost for running the lifetime plans is $5 per user and all of them use their plans 100% it would cost you $500/mo.
In this example you have around 10 months to figure out how to pay to keep the lights on for your lifetime subscribers.
I personally do not like offering lifetime deals. Sure, if there is no additional work required from my side, no problem. However if that also incurs a lifetime commitment from my side (or even only for my product's lifetime) that's a big no from me.
There is no way I can guarantee a decent amount of service for so long, for a fixed amount of money, especially at the price points I usually see for lifetime offers.
If I were to offer a lifetime plan it'd be at least €15 * 12 * 30 = €5400. For that price point however I would make arrangements for continuation of service after I stop offering the product. Stuff like transferring source code to lifetime buyers etc. Additionally with a lifetime deal, even though I would continue development on the platform, there's no way they would get all those sweet improvements for free.
Ps. There's a reason most business moved on from a one time fee for software to a subscription based offering. By offering lifetime deals we're in part moving back to this legacy, with all the downsides to that. Please realize that stable software mostly requires ongoing maintenance, which cannot be offered with a one time fee, and thus lowers the quality of your product, and requires customers to buy upgrades when new features come out.