We have been working on Predis.ai for more than a year now. After launching the first version in mid-April 2021, we pivoted our product and launched the content generator AI which is our main product today. The AI Content Generator was launched on 25th Oct 2021 and we cut it close by launching our AppSumo Deal on 30th Oct 2021 - just before the BFCM mania. However, it did end up well with us selling more than $200K worth of Deals on Appsumo and making $100K revenue for us.
This is about our learnings - and our suggestions on how to do an LTD! Why are we doing this - We hope someone will benefit from this!
First - here are the Real deal numbers and the screenshots from our Appsumo Deal page!
Appsumo Plus Exclusive deal Numbers:
Appsumo Marketplace Deal Numbers
Everyone who does not know what is an LTD - LTD stands for Life Time deal and has become a very popular concept. A Lifetime deal is a special type of deal where you buy access/usage rights to a SAAS product for “Lifetime” at a one-time fee. However counterintuitive it may sound, it's the rage among both SAAS founders and End-users! The popular LTD site AppSumo does a GMV of more than $90M by selling LTDs. Considering the average deal size is $50 per code, That's a lot of LTD software being sold for sure.
The typical Lifetime deal users are Solopreneurs, Digital Marketing Agency owners/employees, and Marketers. So if you are launching a product and are looking to sell to them, you should look at Appsumo. Appsumo has a lot of good quality traffic of folks looking to try out new stuff and looking for some nice LTD bargains!
However not all LTDs are equal. Any product that will make the life of this particular target audience will work well. I have seen a lot of good products that are a little bit in a small niche - they have not worked well as they don't appeal to the larger audience here. So please check if you have a good product-market fit otherwise you might be wasting a lot of time and effort on making the deal successful.
The biggest outcome of our LTD has been that we have been able to go from validating the product to almost reaching Product-Market Fit in a couple of months. I think one should do an LTD as soon as the MVP is made and you are ready to take on the larger market. However, there can be a lot of other reasons for doing an LTD.
Since we were just launching the product, Our objective of doing the LTD was Product Validation. We wanted to validate our product idea - that too in the US market. Hence Appsumo made the most sense for us. You can also think of doing an LTD purely for the money - however, understand the LTD is upfront cash for lifelong liability. So if you have a very good plan to spend that money to grow your business, then only you should do an LTD for Money. There have been cases of folks trying to do this and have generally ended up in disaster. More on this later.
This is where the crazy part begins. How does economics work? How are you supposed to support users for the product lifetime on a 1-time payment? As I said, you can look at LTD as upfront cash against a lifetime Liability. For an LTD buyer, it's an upfront bargain for Lifetime access to an asset.
To know what you can offer, you need to look at the Cost of Maintaining Users. This typically will depend on the type of product you have.
There are different ways you can price the LTD. The core decision of how to price will depend on what you are looking to achieve from the LTD.
Broadly, you will be expected to provide different stacks to unlock a different set of features or limits. The right way is to have 1 offer code giving certain limits. Then 2/3/4/10 codes can be stacked on top giving some extra features.
A few basic parameters that will help you price:
Once an LTD is sold, it’s a perpetual cost/liability for the company and a perpetual asset to the LTD holder. Companies who sell LTD will want users to forget about them once the LTD refund period ends - Users who have bought LTDs will want the company to keep building and creating a superior products.
If you are following the Current LTD Facebook groups, you will know that it has become a very convoluted space to be in. There have been ample incidents of LTDs getting shut after doing a lot of sales and people being unhappy about it. I understand businesses get shut all the time, however, the issue here is some LTDs make a lot of promises about the future roadmap and generate a lot of Buzz and FOMO to sell. When these go down the drain, there is a lot of heartaches and bad blood which takes an impact on the overall community.
There have also been cases where a deal promised the moon and then changed the deal terms later. The community was swift to give 1-star reviews at all places like G2, and Capterra hence screwing the public perception of the company.
Be very careful while deciding the deal structure and you won't be able to change it later without shit hitting the roof :) You might also end up being featured on this :)
I have covered a lot of tactical implementation stuff in another blog post we wrote. You can check it out to see how did we plan the LTD. Here are our high-level learnings from the LTD.
Build a Community - Try to talk to as many users as possible. This might mean reaching out to users on Facebook messenger, sending them emails, and getting on calls. Make a Facebook group and invite users to that. This is very important and helps a lot in the long run. It's a very good way to increase your user base. Here is how we have seen our DAU evolving
Think hard about Pricing- Our pricing strategy was very elementary - we were trying to play it safe and priced just by looking at the cost of sustaining users. We just tried to have enough time buffer so that we can grow our MRR and generate enough money in the future to support all users. I am sure that we did not get our pricing right and could have done a better job in defining the limits and the stacks. This might have meant more deals sold or more users onboarded.
FOMO Sells - Our LTD was live for almost 6 months. The 2 times when we sold the most were the Black Friday Cyber Monday Sale and the last 2-3 days of the LTD closing date. In our 6 months of existence as an LTD, we sold 60% of our entire codes in a matter of a few days. We did try to generate a lot of buzz/ending FOMO, however, it was the AppSumo Deal Ending timer that cracked it. This is how we sold daily - you will see clear peaks on the BCFM days and the ending days. We are still don't know what happened to result in the mini-peak in between :)
Appsumo Marketplace vs Plus Exclusive: Our Marketplace deal was going steady in terms of sales and we were not seeing any large uptick in sales. This is when we decided to go for the Plus Exclusive deal. The assumption was that plus exclusive will help us get more exposure on the AppSumo main page and hence sell more. This cost for the Plus Exclusive deal was also higher - 40% of revenue share for us vs the Marketplace deal where we get 70% revenue share. Finally, for us, I think the Plus exclusive deal did not move the needle significantly. We were promised by Appsumo that typical Plus Exclusive deals see 3-4X of sales of the Marketplace deals. The AS plus share for us was 40% of the total sales against the 70% revenue share for the Marketplace deal. Appsumo’s premise was they spend the extra amount on affiliate commissions and also advertising and hence can't do a larger revenue share. Did not work out for us but maybe you can try this.
Should you be on Appsumo Select? - If you are looking for more exposure, you should go on to Appsumo Select. It's very costly for sure - they ask for a 70% rev share and you end up getting only 30% of the total sales. However, you also get the maximum eyeballs as then you are a lot on the Appsumo main page and also get to be part of the emails sent to their large base. It again comes down to what you are looking for - if money is the objective then this might not work out well. Why did we not go on Appsumo Select - We had already spent enough time on Appsumo and were itching to get on the MRR train. We did not have any patience left to wait for Appsumo Select offer and get on for another 1-2 months.
Stay away from the Affiliates: There are a lot of “Affiliates” in the LTD community - these are people with a good influence who launch “Private-label” LTDs. All of these like to bash Appsumo everywhere and portray themselves as better versions. I think it's best to stay with Appsumo and explore a couple of more marketplaces like Dealify etc if you want some more exposure - finally, Appsumo has the best and most loyal community with them. The primary issue with a Private-label LTD is that the Affiliate + founders who are launching this tend to commit a lot of stuff and the founders then end up holding the towel later.
Show up every day - Make sure to answer the Appsumo questions and respond to reviews within a few hours if possible. Make sure to keep talking about the product updates everywhere - be shameless and post on all LTD groups. People need to know that you are serious about the product and the right way to do this is through your actions!
This is it! I hope it was not too long and too boring :) I hope all of this makes sense. Do reach out to me @ [email protected] if you have any questions. I will be happy to address your questions!
We are very happy with the traction we have got from Appsumo. We are looking to grow our MRR now - we are just shy of $1K. We are also launching some Growth hacks to try and leverage our Appsumo user base. We will keep you posted on how it goes!
I'm surprised this post doesn't have 100+ likes. Thanks for taking the time to write such a detailed report. I'm considering doing a LTD and it answered many questions.
Hey there 👋,
Your post is fantastic because you have been able to put clear well structured valuable info for other fellow SaaS founders that are wondering if going for a lifetime deal would be the right move for them.
I have years of experience and constant contact with founders/developers who have launched AppSumo Select, so I have a good understanding of the industry.
This post about lifetime deals caught my eye because I'm the founder of SaasZilla (a competitor of AppSumo Select but with fair fees).
You mention being unable to reach more sales when you launched in AppSumo Select. Since they have more than 700 ACTIVE listed deals on their platform currently they probably are no longer able to focus on any deal they launch. On any given day, Appsumo has literally dozens of new deals going live (and also leaving and fighting for the FOMO you mention). Congratulations, because it is hard to be on the spot and catch the FOMO wave when there are dozens of SaaS that compete with you on the same platform.
PS: If you are a SaaS founder or developer looking to launch a lifetime deal for your product, I bet I can help. At SaasZilla, we believe in building relationships with developers like you rather than massive listings because we want to give your SaaS/product the attention it deserves. Feel free to reach me at https://m.me/kaipeniet
Very nice, thanks. I guess this works even better, if your product has a built in viral loop.
Yes, we have just implemented a Free version with watermarked output and referral programs. I hope they should give some extra traction.
Why does everyone think a viral loop is a referral program? Actually it is not like that. A true viral loop is how one customer creates four new customers. Not some invite email.
Well written, and rightly pointed out the Objectives of LTD.
I am glad you liked it :)