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Is this the future of SaaS Marketing


#1

Hello All,

There is a growing trend around SaaS product marketing that is giving me a bit of concern. Most product are turning to Lifetime license sales which I think is good if you’re using it to get early users who will give you product validation.

However the consumer behaviour is changing. Most consumers now go around looking for lifetime access to your product instead of the regular monthly or yearly price. Also services like Appsumo briefcase now also makes consumer want to pay a fraction of monthly fee to access a lot of SaaS products. If you have a similar product that is part of Appsumo briefcase, it will be difficult marketing against them.

Is this the future of SaaS products marketing? How sustainable is this model in the long run and what other models should SaaS products adopt.

Honest feedback is needed because I have launched which I have offered lifetime access for a limited period.


#2

Interesting, I didn’t know about AppSumo Briefcase. Funny fact 3 of their tools are customer of mine.

I don’t see how a lifetime license for a SaaS can be sustainable. It’s not like a desktop software where you don’t have any resources to pay for the usage of the software.

Might be just a way to jump-start the first year maybe. This is where doing something unique and of value to 10+ size businesses will be a requirements for future for SaaS. We’re not only required to validate the idea, but we will have to make sure the problem solving has a strong enough uniqueness twist to compete against that sort of pricing model.


#3

Personally, I wouldn’t use any SaaS app that offers a lifetime plan for anything that isn’t trivial. (trivial being its no drama if it vanishes one day and/or super easy to move to an alternative). A lifetime plan is just not sustainable so I assume that its a short term survival thing. Other customers (and more so in B2C) may not see it that way.

re: AppSumo Briefcase - didn’t think the included apps were very inspiring, nothing close to best of breed in their respective niches that I saw. (But I only glanced through).

Do you know any ‘well known’ SaaS companies that are providing lifetime plans?


#4

So the monthly subscription model is reverting back to “buy once, own forever” software licenses. Interesting. Didn’t see that one coming - expected subscriptions to be the future of software sales.


#5

Same here. “Lifetime plan” screams “we’re going out of business soon - this is our last straw we’re grasping onto” to me. Either that or it’s some shady service that wasn’t intended to labe around for too long anyways.

But then again - I learned a long time ago not to extrapolate from myself to general customer/user behavior. I never believed anyone would click on ads until a friend virtually forced me back in 2004 or so to put Adsense on my blog :slight_smile:


#6

So the monthly subscription model is reverting back to “buy once, own forever” software licenses.

But is it really? Who’s doing that, I haven’t seen it myself.


#7

Agree, which is why I said “Other customers (and more so in B2C) may not see it that way.”


#8

Why do you say “most products”? There are much, much more companies than those a few who give life-time deals.

Companies close to B2C may do that, but for a B2B it’s like shooting your own foot. Not every company is happy about the outcome of these deals.

You get a bunch of money, but not nearly enough to keep a business running. Most companies use this for getting early adopters. Also, from what I heard, customers from those deals are also very demanding and complain a lot, so you need to be very careful, it can actually ruin the business instead of helping it.


#9

Kind of like Groupon. I know of one small business friend who did a groupon and very nearly collapsed because of it :frowning: All is good now and lesson learned.

However, my tolerance for subscriptions is starting to wear thin, and one getting my goat right now is the constant showing of the monthly price paid annually with some showing 33-50% savings first. Cashflow as a bootstrapper is not ideal. I actually did an exercise recently and gathered all my monthly costs and killed about ⅓ of them. Well worth doing periodically. I get why and will in my SaaS, but it seems to be an train hurtling down the tracks and about to hit the curve at high speed for some. Price creep is getting more frequent too.

However if it keeps the lights on, so be it, but we’re probably seeing more natural selection as feature sets rise and people add more features. Was about to pay for Zapier but discovered my tool had added Slack connectivity… :slight_smile:


#10

Nah. I think just some dummies decided to give out some lifetime licenses without calculating the costs.

The only possible way for this to work is when the sell price is so large that it is guaranteed to cover all future expenses on this user for say 10 years. If the SaaS is doing something simple and you can predict the amount of load a user generates (e.g. pinging servers at Pingdom) - it may work.


#11

I have clients who did deals like this so I studied this “thing” a bit. Many companies agreeing with this are very new and for them the initial cashflow means a lot, especially if they come from places where the salaries are x7 lower than from US. Same amount of money for them means a lot more.

I’ve also seen about 2 companies which have been sold and the new owner shut it down or didn’t care about those life-time folks.


#12

That maybe a deciding factor. However, to serve US, the servers should be located in US or the latency would be too high. Hence the hosting costs will be US-level.


#13

I quite understand and agree that lifetime licenses is not sustainable for SaaS considering the resources that goes into maintaining the platform. However I’m more concerned about the consumer behaviour trend. Every business must pay attention to that behavior. For example, Appsumo has over 1 million subscribers and are very heavy in marketing across social media platforms.

In this age, technology can easily be replicated. my question is outside technology, what is the second most competitive advantage of a SaaS platform is it’s not pricing.


#14

I believe you’re worrying too much.

In your original message you stated that “most” products are switching to lifetime and “most” consumers are asking for it. I do not believe it is even remotely true.

Ok, so you have to market to the rest 324 millions that live in US and 999 mln that belong to the golden billion. Is it a huge loss, those Appsumo subscribers?


#16

Maybe the purpose of the thread was a masked AppSumo advertising? :slight_smile:


#17

:slight_smile: I doubt it. @stanwarri is far from US shores, and probably places too much importance on AppSumo.

I’m not saying that AppSumo is unimportant. Just that the kind of deals promoted there are not the normalcy.


#18

I was thinking about this myself recently.

Quite a few of my users tend to use the product a few times. They need it for a specific project then once they have done that project they don’t need it again.

I was tempted to try lifetime licenses for this reason but as others have said it can look a bit desperate.

As a customer, I bought a lifetime license for one of the live chat apps the other week but the quality of the product is not great. Their mobile app does not work at all and support does not seem to care.

I do worry that the business model of a lot of these SAAS companies could be sell loads of lifetime licenses and then disappear.

The groupon comparison is a good one, it was a disaster for many businesses.


#19

That’s why when you see a company selling life-time licenses have a second thought if it’s a critical part of your business. For B2C works great, I have no issues with that, but for B2B doing this is too much…on B2B you need trust and I don’t really trust companies doing this especially if they are not early stage.

However, there are some exceptions, for ex. Plutio who offered a life-time deal…I kinda know the founder and I’m pretty sure they won’t disappear soon.


#20

I do not see how is it an exception? :face_with_raised_eyebrow:

Your knowing him doesn’t cancel the laws of economics. Down the road, faced with the increased costs with no revenue to cover for it, he may decide to fold.


#21

That is far from it.

Yeah. I think one need to think of how to satisfy the rest of the market.