Lifetime deals, AppSumo, The good, the bad and the ugly

Launch

My name is Nevo and I am the CEO and Founder of Linvo.

We have launched Linvo about half a year ago, We got tons of users, a lot of money, So is it all good?

Why would you want to launch a lifetime deal?

The short answer is, You don't, And I will get to it in the cons.
 

When you start a new product, the product is maybe 50% of your business, you need traction and by traction I mean marketing.
 

With websites like AppSumo, you are almost guaranteed to have paid customers and grow with the platform.

What do AppSumo offer

So what makes it so good?

If I need to put selling on a scale, from the easiest to the hardest, it will be lifetime deals, then e-commerce (physical stuff), SaaS monthly subscription, and Services.

The decision is easy, and you pay 1 time, if it's not good, you have a 60 days refund, no questions asked,

If you are a lifetime customer looking at this video, you have probably refunded more products than you actually bought.

As for e-commerce, you can still return, and it's a one-time purchase. However, it's a little bit more complicated than a click of a button.

First, it's easy to get in

That might sound weird, but they accept almost everybody, as long as your registration/login and redemption page is working.

That can be super helpful if you are working lean, and releasing a very lean version of your product.

Second Part is the Community

If you build your product right and add everybody to your newsletter, you have real power like a leader leading people.

Do you want reviews, testimonials, SEO from people's blogs, Youtube videos? You got it.

You are definitely on a good path to promote your brand.

Make sure you click on the subscription button below, and the bell icon so you won't miss any video.

That really helps us creating more videos and giving you more valuable content.

Third Part - The money

The money is a very conflicted part.

With Lifetime deals, you can generate more money than a subscription in the short term, And it's massive. So if you are a bootstrapper, you can live very well on it.

When we launched Linvo, it looked like shit, but we improved our product tremendously with our money.

Money is confidence for every entrepreneur.

So why do founders still end their deals on AppSumo? Thank you for asking, it's not all good, and we are going to the cons now.

1. You are basically building a pyramid

If we sold the lifetime deals with the product's actual price, we wouldn't talk about it, but the truth is that most lifetime deals are being sold between 20 dollars - 100 dollars. And while it can cover the first months of the users, it will probably reach its end at some point, And you will need to take money from new users to pay for the old ones. Hence, you are building a pyramid.

2. You need more customer support.

I know I know it's part of funding new users. But this is really a pain. If you have a live chat, as we have in Linvo, you see that you need to hire many people for customer support, because they just keep coming like crazy.
Even for the stupidest question, it requires more people.

Plutio lately got something like 8000 members in 3 days, I can't imagine even the headache of customer support.

3. You don't know how you next month is going to be.

Every month you start with $0 and while you assume you will get more money, you can't anticipate it.

And that's a big pain in my next topic.

3. Investors and Data

If you have a normal monthly/annual subscription on your website, you can measure your Monthly Recurring Revenue, You know how the next month will start, and you can anticipate the month after with your data.

Also, you can measure your churn, which is how many people stop using your service. That's super important information.

Not every company requires investors, but if you do need them, they would want to see your Monthly Recurring Revenue and churn, with a good reason.

4. Switching between lifetime to subscription

Lifetime users don't buy subscriptions. That's a fact.

If you think you can convert them to subscribers, good luck.

Also, lifetime users understand that you might have bugs or ugly designs. Their feedback is completely different from regular monthly subscribers. So if you were really planning on switching, know that's a fresh start for you.

You can still use your reviews and testimonials, and in general, the community. That's very helpful.

I want to talk about the LTV part, I am still conflicted with

LTV is Customer lifetime value; it's basically the average of all your customers on how much money they will pay you in their total lifetime.

In Linvo, we increased the price from $80 per month to $300, our LTV assumption.

We are still getting many purchases with that price, which is actually covering the customers for more than a few years. Because of it, we still don't get subscriptions, and Like I said in the last part, it's problematic.

If you think I forgot something please put a comment below!