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Estd 4.22.2023
Below is a direct answer based on the principles and insights from our saas pricing book, Price to Scale:
• Direct Answer
Yes, some companies have experimented with lifetime deals—often offered on platforms like AppSumo—but the outcome can vary widely. These deals sometimes generate an initial burst of users; however, if not carefully structured, they risk attracting customers who place a disproportionate load on support resources while offering little recurring revenue.
• Insights from Price to Scale
Our book emphasizes the importance of aligning pricing strategies with long-term growth. In areas where we discuss lower-cost tiers and customer segmentation (see Chapter 3 on pricing for user acquisition), we note that pricing decisions must balance immediate customer acquisition benefits against lifetime revenue potential. A lifetime deal typically converts a one-off payment into a customer relationship that lacks the recurring revenue stream vital for sustainable scale. If a lifetime offer isn’t well-segmented and managed, it can lead to a support burden that isn’t justified by ongoing revenue, as these customers often remain price-sensitive and may not convert to higher-value offerings.
• Practical Considerations
- Evaluate the customer lifetime value: Lifetime deals might work if you’re confident that these customers will continue to be engaged (and potentially upgrade) over time.
- Monitor support costs intensively: Ensure that the cost of servicing these customers doesn’t erode the value of the one-time payment.
- Use lifetime deals as a controlled experiment: Consider running them deliberately as part of a broader acquisition strategy, so you can measure both acquisition cost and support load.
• Summary
In Price to Scale, we advocate for pricing strategies that create a balance between user acquisition and long-term revenue stability. Lifetime deals can be effective for rapid growth if their drawbacks—like potential support burdens from low-revenue customers—are carefully managed through segmentation and metrics tracking. The key takeaway is to test these offers, measure their long-term impact, and ensure they’re aligned with your broader SaaS growth objectives.