There is a lot of ways to sell your digital products in the SaaS industry. Subscriptions, standalone for free, and charge for some functionalities, Bundles, Addons, etc.
One of the most popular ways to sell digital products today is the Life Time Deals or LTD.
While the subscriptions and the add ons have been around the block for a while, the LTD is a thing we still need to discuss to get our head around it.
When we talk about LTD, we have to make two differentiations: the company’s age and the product’s age.
In general, the LTD is paired with webs that offer very good prices for the general public and an extensive mailing list for the app developers, composed of your target along with entrepreneurs, tech-savvies, and with very good engagement ratios.
Most of these webs are open to anyone so any dev can submit their products, resulting in a very extensive repository of digital products. This attracts a lot of attention, thus a lot of people are available as buyers.
So is it worth the trade out?
It depends because most of these webs charge a very big commission between 50% and 70% of every sale, plus the LTD are very low cost per se, so the amount of money on your account won’t be much. LTD is based on bulk selling. If you have a niche product, say a product that makes a very specific and specialized function, this deal is not for you.
Add to this that some of these webs request exclusivity with your products denaying the possibility to sell on your web or other platforms. On top of that, most of the time they will be advertising competing products at the same time as yours.
Life Time Support
When you submit an LTD you’ll have an avalanche of new customers, which is a good thing IF your product is stable, but if not you’ll be buried in support requests at a very low-profit return.
Let’s say your product is stable to endure massive usage by new customers, and you have all the documentation for your customers to educate themselves. Still, you’ll have to provide Lifetime Support for all those users, which is a lot. You need to have a very powerful support team active every day just for this deal. And what about your other products or deals?
Life Time Sales?
Although you’ll get a lot of visibility and new clients in the beginning after the noise passes you’ll get very few new clients, and you’ll be stuck with an exclusivity contract and a lot of support demand.
If there is a good thing about the lifetime deals that’s the exposure you got when you start the deal. Part of the commission they take is to fund the marketing efforts. They optimize for their own platform to almost guarantee conversions showing your landing page to the best prospects and potential customers only. This could be a very good rest for your marketing team.
When to use LTD
If you are a new company launching their first products, you may need a lot of visibility and customers fast so you can start making a profit and a name for your company. In this case, a LTD will be ideal. If your product is not the success you imagine, you can always abandon the product and cancel all the subscriptions. You won’t lose anything.
Also, if you are a company with some time in the market but you are launching a new product, and you want to propel sales and visibility, the LTD may be a good alternative but only for that products. After the exclusivity has ended, you might want to change platforms and start selling monthly and annual subscriptions and with prices a lot more elevated, so you can compensate the number of support tickets you’ll get at the same time you take advantage of the visibility you got. After all, you are a well know company in your sector, right?.
Now if you are a senior company, and you have a well-established product, the LTD will be the demise of it. You don’t need to cheapen a working software with that kind of discounts and deals. Remember that you get a short period of sales and a large period of support requests.
The third case is if you are putting a product out of the market and you want to squeeze every dollar you can out of it, and when the LTD is over, you drop the product and the support for it, decommissioning all about it. These might not be the most ethical thing to do and can have very bad consequences for your company’s image, but it is still a thing you can do.
Our take in ThemeKraft.
Although ThemeKraft is a well know and well-established plugin company, and with renown in the WordPress community, we are taking our chances with a LTD. We are launching a new product with a lot of new functionalities; All In One Invite Codes WordPress plugin. Right now, the stand-alone version is for free, but there is a lot of paid addons. For a very know LTD web, AppSumo.com, we are creating the All In One Invite Codes Bundle, and because it’s a plugin with constantly new features and addons we want to try and see how well can we do in this environment. Soon we’ll be making a marketing campaign, along with the advertisement AppSummo does inside the marketplace to lunch the bundle in force. We recommend you to give it a try, they have a 70% discount on almost every LTD and a 60 days refund policy. As we said before, for the customers is heaven.
We also have an educative reason, we want to learn everything we can about this kind of deal and platforms so we can relay all we learn, do and achieve, for the good and the bad.
Wrap it up
The LTD is a growing product in a growing industry, so what it lacks today could be its best feature in the future. There are different conditions in which the LTD might be very useful and profitable for your company, but there are some scenarios where is not a good idea at all. You have to evaluate the stage your company is, where it is in the market, how we’ll know it is and how badly you need cash influx. You would consider the LTD, unlike its name, a short-term strategy with long-term consequences. If those consequences are bad for your company is totally up to you and if you make a good decision in taking a LTD.