Lifetime Deals: The Shortcut Every New Founder Dreams Of (But Few Survive)

Matt Cromwell
00:07-01:05
Hey everybody, there is a really interesting and somewhat controversial subject in the world of WordPress products. That we actually have talked about before, but it's a really good subject to talk about today. And people tend to have really strong opinions and feelings about this subject. If you haven't already guessed it, It's all about lifetime deals today. This is WP Product Talk, a place where every week we bring you insights, product marketing. Business management and growth, customer experience, product development, and more. It's your go-to podcast for WordPress product owners, by WordPress product owners. And now, enjoy the show. Welcome, welcome. I'm Matt Cromwell from Stellar WP.

Katie Keith
01:05-01:07
And I'm Katie Keith from Barn2.

Matt Cromwell
01:08-01:18
And today we have a special guest, somebody who recently launched a brand new product with lifetime deals. Leslie Sim. Leslie, welcome to the show.

Katie Keith
01:18-01:25
Hi, nice to be here. Thanks for having me. Well, thank you so much for being here. Yeah, please tell us all a little about yourself.

Leslie Sim
01:27-01:45
I'm Leslie. I'm from Singapore. It is midnight for me, but I'm still really excited to be here. So I hope my energy levels can keep up with the time. And we recently launched a new Event Calendar plugin called Event Coi, which is what I'm here to talk about today.

Matt Cromwell
01:45-02:02
Awesome. Honestly, first thing I'd love to hear is a little bit of like why did you decide to Launch your new product with a lifetime deal. That, like, what brought it to your mind? What made you think, yeah, this is a good idea?

Leslie Sim
02:03-03:09
So we actually and this is why it's a good idea to launch constantly, but we actually launched before that without a lifetime deal, and that didn't go so well. And we were trying to figure out what we should do next. And then I realized, oh, a lifetime deal would work perfectly in our particular situation. And then we went for it. And to my surprise, a lot of people thought that that was our first launch. And I haven't really corrected them. And so we've kind of gone from there. And yeah, so going back to my earlier point, like this is why, you know, never be afraid to just, you know, oh, the first launch was a failure, launch again. Second launch was a failure, launch again. And at some point, you know, you'll have enough. stuff happening for you that and you've gained enough experience so that when you do finally launch your third or your fourth time, people will be like, oh, wow, we finally heard of this for the first time and it's really cool. And that's kind of how Launches go. So don't ever feel ashamed or embarrassed if a launch doesn't go well.

Matt Cromwell
03:09-03:10
Nice.

Leslie Sim
03:10-04:39
As for why we decided to do the lifetime deal, when we did our first launch, I and maybe I was handicapping myself a little bit, but I found myself giving a lot of disclaimers and caveats with our first launch. I was telling people things like you should buy if you need these particular features. But then if you need this other feature, for example, tickets, which we were planning to build or are planning to build next year. you know, don't buy now, buy next year, which is you know, really shooting myself in the foot. But that's genuinely how I felt, and I didn't want people to buy now, be upset that they didn't have that we didn't have the feature that they were looking for. and write us off completely. And so because I was adding all of these caveats, the first launch didn't go so well. And I was really struggling to think of how we could start earning some revenue for all the work that we've put in, but at the same time not shortchange our customers. And in that With that particular problem, I think the Lifetime Deal worked really well because we are offering a really good deal upfront in exchange for trust from our customers. And what they're getting is in the future for perpetuity all of our features

Matt Cromwell
04:37-04:49
So they trust that we're going to build features that they want and they pay us upfront. Well, tell us a little bit of detail about exactly the lifetime deal that you offered. What are the benefits? What's the options? Things like that.

Leslie Sim
04:51-05:08
So I should know this off the top of my head because we just did it a couple of weeks ago. But I think it was we did Three licenses, ten, and then twenty-five, I think, something like that.

Matt Cromwell
05:08-05:08
Okay.

Leslie Sim
05:09-05:18
And then fifth. 25% off all of everything we build in the future as well.

Matt Cromwell
05:18-05:18
Oh, wow.

Leslie Sim
05:19-05:22
Yeah, I think that was what we offered.

Matt Cromwell
05:23-05:47
I remember that actually because I was surprised that you didn't offer an unlimited licenses, lifetime unlimited option. You did. License limitations, but unlimited lifetime, I mean, lifetime options. I thought that was cool. And you also added like Slack access or something like that?

Leslie Sim
05:47-06:01
Yeah. So all of our customers get access to me and Ahmed in our Slack channel as well, which is much easier to talk to us in an informal way rather than having to go through email.

Katie Keith
06:02-06:36
So a little bit more like a feel special for you're making this like a club that they're part of. I really like that, that they're buying into it early and therefore, they might hopefully be more forgiving that it hasn't got all the features and things like that. So I'm curious to know you said twenty five percent off things you release in the future. Event Koi is Event Koi, so surely it would only be kind of closely related to the core product. How would you justify future products that aren't included in what they bought?

Leslie Sim
06:38-08:03
Yes. So actually, that part caused a bit of confusion, and I'm not sure if it resulted in lost sales, possibly. But I had written originally in the copy something like twenty five percent off of all future updates, add ons and products that we build. And people got confused by the updates because they thought that they're going to get Event Coin as it is today, and then they're going to still have to pay for future updates which understandably upset them. So I got a couple of emails asking for clarification on that. And then I clarified and they were like, oh, that's way better that like this is a way better deal than we originally thought it was. And then I eventually had to remove the word updates because I just like meant it in a generic kind of way, but I you know Now thinking back, obviously what people read it as is plugin updates. But to answer your question, Katie, I think it's hard to say what we will or won't build just because EventCoi is so new. But like we definitely want to have an EventCoi Pro, which will have most of the features. But there might be room for add ons in the future or like parallel plugins. It's yeah, it's really hard to say. But I just wanted to whatever we build, you're going to get 25% of those things, no questions asked.

Matt Cromwell
08:04-08:09
Yeah. So are you planning on essentially an add-on model eventually?

Leslie Sim
08:10-08:41
I think so. I think I don't want to have, and again, this is really hard to say, but I want to avoid having dozens of add-ons just because they will be really hard to maintain. But I'm hoping to have something like Three to four big add-ons. So for example, tickets will probably be its own separate add-on. I'm not sure what else, but I'm sure there will be other stuff in the future that we'll build.

Matt Cromwell
08:41-08:49
Yeah. Interesting. I like it. And I think the big question next is like, how did it go?

Leslie Sim
08:51-08:57
I think it went And I've talked to you, Matt, about this priority.

Matt Cromwell
08:57-08:58
I loved your takeaway, by the way.

Leslie Sim
09:00-11:11
So I think it went well. And then like as soon as I saw that it was going well during the sale period, I immediately moved like the mental goalposts of on myself. Started like having all sorts of regrets about, you know, oh, I could have done this, I could have done that, and we could have gotten more sales. But I think, based on what we were trying to do, I think it went really well. So we were trying to The deal that we offered was a founding partner lifetime deal. And the idea behind it was that we would get people who are excited about Eventcoi and believed in its potential and its future and wanted to invest in that. And that's why we called it the founding partner deal. And so we priced it based on people who were serious about us and wanted to actually use us. And I think That was reflected in the copy, in the deal, in the pricing. And I think all of that was very cohesive. But then once I took all of that to market, It turns out that having never run a lifetime deal before, I had kind of alienated a whole hidden from me market or audience of people who just like to buy lifetime deals for and like they're not even particularly interested in using the product. They just like the idea and rush of getting a good deal. And I think our pricing was too high for those people. And So again, it's silly because like the entire campaign was very cohesively built for people who were serious about us. But then once I realized, like, oh, there's this whole other market that I've accidentally kind of left out. And like, you know, maybe if we had lowered our pricing, we could have scooped some of those people up. Yeah, I couldn't help but like have like a grass is greener kind of a feel and wish that I had done something for those guys as well.

Matt Cromwell
11:10-11:52
Yeah, that's really interesting. So it feels like in some way you could have optimized for the founders or you could have optimized for the end user customers, and you ended up optimizing for founders. I mean, have they generated a ton of support tickets since then? I would hope not, right? Like that's the other side is if you did optimize for sales and you got a whole bunch of folks who are trying to use Eventcoid today, then you would have maybe had more revenue, but then a whole lot more support to get since then. So maybe it's like pros and cons of each side. That's it, they use the product.

Katie Keith
11:53-12:06
A lot of these people they collect lifetime deals and they never even install it. To me, it's really weird. I also don't get the mentality, and this will alienate a lot of our audience, of collecting domain names that you're never going to use.

Matt Cromwell
12:06-12:08
I mean, I feel personally attacked.

Katie Keith
12:08-12:53
I just don't admit. I know so many people. I'm guilty as well. Like, you're never going to do it. The business is about so much more than a domain name. So, if you don't even have a business, anyway. That's not the topic. But similar mentality is collecting lifetime deals. And you've no idea if you'll ever want this product, but you buy it just in case. And they probably won't generate support tickets ever. They won't give you useful feedback on your new product. They won't be active in the Slack community. So it is just getting one of Money from people. So, yeah, I guess, what's your priority? Getting real customers who will pay more and engage, or these collectors that give you some money now, but you'll never get anything in the future.

Matt Cromwell
12:53-13:19
I love that. I actually have a friend back in San Diego who went to our meetup all the time. And any time any of us ever wanted to get a license to any plug in, we just asked him because he had bought everything out there. Lifetime license. Oh, they did a lifetime license like five years ago. I got one. Here it is. Like there are definitely those people, and I know them.

Leslie Sim
13:21-15:19
Yeah, exactly. Like so so that was a big eye opener for me because I put my deal in a lot of Facebook groups. A lot of Lifetime Deal Facebook groups, including like Katie, I spoke to you and you recommended some, and a bunch of other WordPress friends who had run Lifetime Deals recommended some other groups to me as well. which they said had worked well for them. And in general, I would say that the feedback that I got from those groups was your lifetime deal is ridiculously priced and you suck, which is fine. And again, it was like a huge eye opener for me because I wasn't aware of This whole collector audience. And the thing that really kind of You know, made me realize that I had looked at those Facebook groups all wrong, was I was getting some of those comments in one of the groups. And then one of the moderators. So what a lot of the groups, which I think is awesome, are really, really careful about Who they allow to post and what kind of like they want to vet the content, vet the person as well, which I think was really cool. So it took me like, I want to say a week to get into a lot of these Facebook groups. just getting in touch with the moderators, telling them who I am, what I'm about, can I post this? And it takes a little bit of back and forth. So I think that was really cool And one of the moderators actually sent me a voice message. And it was I can't remember the exact details, but it was basically like the reality of A lot of these groups is that they're going to collect the deal and they're never going to use the product. And that's why they're upset that it's so expensive because they're solely looking for a good deal.

Matt Cromwell
15:24-16:12
You prevented them from allowing you to be collected. And so. That's amazing. It's a really interesting take overall because they're going into those Facebook groups, it's like it's definitely the tactic if you're going to be optimizing for revenue instead. And I mean, but at the end of the day, that's you'd made your choice. You chose instead to find folks who are going to be loyal and give you good qualified feedback. And you won. Like that's the campaign that you shipped, and that's the people that you attracted. But there's always that grass is greener or buyer's remorse type of feel of like, oh shoot, I should have done a different one. But But it seems like you got exactly the outcome that you expected and wanted.

Leslie Sim
16:12-16:13
Yeah, I think so.

Matt Cromwell
16:14-16:14
That's awesome.

Leslie Sim
16:15-17:52
This is the game I played, and this is the medal that I signed up for. And so I think that I put together a good campaign based on what I was trying to do. And I also want to talk like quickly about what converted best for me, and that is my email list. So I think I got my email list from two main places. The first is so before Eventcoi, I founded Newsletter Glue, which we ran for I want to say five years, so half a decade. And we had a good size email list from there. And then when we sold that, I sneakily added you know we're also working on event core and if you want to sign up for updates there you can you know do that over here and so i think we got about uh maybe a hundred or two hundred emails from there And then from Twitter, we got another one hundred. And so all then we had about three hundred emails. And I think that converted the best out of everything. I also got on a bunch of WordPress newsletters, and I'm not sure if I mean, maybe getting on those newsletters helped To, you know, because sometimes people need multiple points of contact and, you know, awareness. before they remember to buy or decide to buy. So that might have helped. But one thing interesting is that I gave each of those newsletters and an individual discount code and nobody bought using any of those discount codes.

Matt Cromwell
17:53-17:54
Interesting.

Leslie Sim
17:54-18:02
Yeah. So I I thought that I'd at least get like one or two like per newsletter, but I got zero across maybe eight to ten newsletters.

Matt Cromwell
18:03-18:03
Interesting.

Leslie Sim
18:03-18:12
And instead, people were all using just the discount codes that I had given in my email list. So that was what really converted.

Matt Cromwell
18:13-18:28
So that's something I expected. Was it the same rate, discount rate, in every platform, but just a unique code just for tracking purposes, basically? Yeah. Yeah. And you had a Facebook group discount that was different? Or?

Leslie Sim
18:29-18:55
Uh no. So okay, so one thing that I did do as well, which I should probably talk about is we marketed the deal for about one point five to two weeks, but it was closed the entire time, and then we opened it for a week. So for the entire time that I was marketing it, the only thing that you could do was sign up for the email list.

Matt Cromwell
18:55-18:56
Got it.

Leslie Sim
18:56-19:05
Yeah. So I want to say Facebook groups Got me somewhere between 20 and 30 emails, maybe.

Matt Cromwell
19:06-19:06
I see.

Leslie Sim
19:06-19:10
And again, it could have been a lot more if the deal was better.

Matt Cromwell
19:12-19:28
That makes sense. So you use the Facebook groups to get folks in early ahead of the deal, essentially. And then anybody who signed up through the Facebook group, they got your email and then they buy they purchased Through the email, basically.

Leslie Sim
19:29-19:29
Yeah.

Matt Cromwell
19:29-19:33
Yeah. Cool. Interesting. I like it.

Leslie Sim
19:35-20:26
It's my first time running an aggressive funnel type campaign. I must say it was really fun. I had never done something like that before. It was really nerve-wracking because a lot of work went into it. I like to split up my day into very simply morning, noon, and night. And I try to work. Minimum one, maximum two kind of slots a day. But during that period, I was working all three, like I'll be working in the morning, working noon, and like in bed at night, like still working. So it was a lot of work, and I was really worried it wouldn't pay off because you I had no inkling, right? Because everything was just kind of funneling into an email list. So I have no idea like when I open open up sales, like is anyone going to buy?

Matt Cromwell
20:27-20:31
But thankfully, we got a bunch of sales. Yeah.

Leslie Sim
20:32-20:36
Yeah, it was it was fun. You can see why people run these things all the time.

Matt Cromwell
20:36-20:49
Yeah, 100%. I think when a lot of Folks think about launching a product with a lifetime deal. They think of things like App Sumo and they think of things like Product Hunt. Did you consider any of that stuff at all?

Leslie Sim
20:50-21:42
No. I mean, I don't want to say I don't know that much about product hunt, but I'm not sure how relevant it is for the WordPress audience. I don't see people in WordPress launching a product all that often. And well, I mean, I to be honest, I don't know a single person who has good things to say about App Sumo. I think if I ran like a info product, maybe like a one something that was already one off, then Appsumo would probably be amazing. I think actually, yeah, I think I have heard people who do info products say that Appsumo works well for them. Um, but I think anything subscription based would be it would be really hard to deal with those customers. Like you get, you know, a thousand customers And next to no profit, and they would all be really demanding.

Katie Keith
21:43-22:32
Yeah, well, this is why lifetime deals get a bad name across the board because of places like Appsumo. historical Invato marketplaces like Theme Forest, where they were selling plugins for twenty nine dollars lifetime, unlimited updates. And people are still struggling with the consequences of that years later. And so people are kind of tarring it with the same brush and saying all lifetime deals are bad. when you made a calculated decision that you were going to charge quite a high amount that would make it worth it. And you wanted that incentive to get people in early so you could get that feedback, get those power users, early adopters and all of that. I think that's completely different to something like App Sumo, but people don't necessarily realize that.

Leslie Sim
22:33-23:05
Yeah, for sure. I mean, I think actually one of the things that Appzumo tells product owners to convince them to go on Appzumo is that you'll get a lot of customer feedback. But I think it's the maintenance that kills you. If people are buying a lifetime deal on Epsumo and then like three years later They have a support ticket. You don't it feels, you know, there goes all of that revenue right now. Yeah, yeah.

Matt Cromwell
23:06-23:08
I answered this email and now it's gone.

Leslie Sim
23:08-24:37
Yeah. And I think, you know, it's a weird thing to see. Oh, Matt's gone. Okay, keep going. Yeah, it's a weird thing to see, but. At the start, you don't actually want too many customers. Right. So like I think we got about 30 plus customers from our lifetime deal. which is an okay amount. It's an amount that I'm happy with, but maybe it's not, oh, wow, we've got one thousand customers from our amazing big launch and a million emails or something like that. It's not that kind of amazing. But for me, like thirty customers is the perfect amount for us to get the feedback that we want. Without overwhelming ourselves, have like a good amount of support tickets, again, without overwhelming ourselves. keep chipping away and chugging and building the next phase of our product. In contrast, if you get a thousand or ten thousand apps to more customers, like you as your small little business who has just launched, you're like physically not equipped to deal with them. And it's if the reason why you're launching is to get feedback from you know early feedback from customers, like it's actually not good to get a thousand angry customers knocking on your door because 90% of it is not great because you're early, you're new.

Katie Keith
24:37-24:51
Yeah, and you know what? I bet you got a similar revenue To if you had done an ultra cheap deal on App Sumo and got more customers because you're charging more per customer. So that's hugely more profitable as well as more manageable.

Leslie Sim
24:52-24:53
Yeah, I think so.

Matt Cromwell
24:56-25:58
I think I'd love to transition a little bit into we t talked a little bit about launching this new product with Lifetime Deal, but a lot of products also have Lifetime Deals going on regularly. Like Barn 2, for example. And Katie and I had a great conversation a while back, actually. If you all don't know, we have another little series that we do every once in a while called Yay or Nay, where we just take a subject in the WordPress space that's controversial or interesting and just say What are you? Are you a yay or are you a nay? And Katie and I did lifetime deals on that one. So go to our YouTube channel, go to videos, and you'll see there are an episode where we talk all about this. And Katie was highly convincing about her approach to lifetime deals. Katie, I'd love to hear a little bit again about how you approach the idea of lifetime deals in the Barn two products.

Katie Keith
25:58-30:06
Yeah, the key thing is to make it worth it and think about it from a business perspective. So we offer permanent lifetime licenses. I'm not even going to call it a deal. It's just a different license option. A lifetime deal is more like a one off thing, get loads of hype, get loads of customers in quickly, whereas we offer lifetime licenses as an option. So we did it by calculating our average customer lifespan on the annual. So the average customer will stop using our product after about two and a half years. So following on from that, to do lifetime, we thought, well, we want way more than that to cover the risk. We obviously were giving up on ongoing cash flow. there's a risk they will stay for years and ask for loads of support. So we need to counter that. So we've gone through phases of selling lifetime at three times the annual price three point five four. And I've had some advice that in terms of company valuation, it's okay to sell your company with some lifetime customers who are they're going to have to support. but not too many. There needs to be good ongoing new revenue with subscriptions. And the advice I was given was it should be up to about fifteen percent of your total revenue. And every six months, we monitor this and we increase the price of the lifetime deals if it gets to fifteen percent as a disincentive to buy it. And if it's way less than that, then we might make our lifetime deals a bit cheaper to get a bit more cash flow. So we do it quite strategically and play with the numbers in order to get the right balance between annual and lifetime. So that's what we do as an ongoing basis. And we also did more what Leslie's talking about as a one-off deal. It wasn't a launch deal like Leslie. It was just that I was contacted by the LTDF, that's Lifetime Deal Fans, Facebook group. And they said, hey, do you want to do a secret Lifetime Deal on your all access pass? And now our all access path doesn't include a lifetime option because, as Leslie said, she doesn't know what she's going to build in the future. So we can't say, here's our all access past lifetime. It covers all future BAM2 plugins by us or anybody who might even acquire us in the future. that doesn't feel responsible. So we've never offered lifetime on all access, just like how Leslie excluded new products from hers. And so this company said, well, we want a lifetime deal on your all access pass. And I thought, okay, how can we do that sustainably? And the solution I came up with was to exclude future products, as Leslie did. And so we did a deal. It was quite expensive. It was like one plus thousand, depending on the number of sites. And so we did this deal. And we also offered 50% off any new products that we release in the future. That's kind of an apology that we couldn't include that in the lifetime deal. And we did over forty thousand dollars in a two week period just through that secret Facebook group. So it didn't devalue our products more widely because nobody else knew about it. And the random lifetime fan seemed to be willing to pay that, which was good. And there was like the group was so supportive. They did loads of live streams and things to really promote our products. it was a really nice working relationship. So we made a lot of money and some of them do use our products and give us useful feedback. But even more interestingly, whenever I launch a new plug-in, I email that I've got a list of the people that bought. and they get their fifty percent link. And a couple of them always buy a lifetime license for our new product. So a couple of thousand in revenue within the first couple of days, which is really nice. So I think that's good for the business, but not everybody agrees.

Matt Cromwell
30:07-31:05
Yeah. I think the biggest counter that often comes up is the impact it has on the value total valuation of the business. And I love the way in which you really rein that in by making sure it's only fifteen percent of revenue. or less. And I think it's amazing that you just like if you see it creeping up too much, you're like, well, I'll just like reduce demand for this product by increasing the price. I think that's really smart. And the I mean, I think a lot of folks would say, well, yes, it's good for the business in the short term, but not good long term because anybody who wants to buy your business isn't going to be interested because of the dependence on that revenue not being there essentially. But it sounds like you have a good caveat for that. So it works in your favor for sure. Yeah, it's like adding tickets, right?

Leslie Sim
31:05-33:02
Like you just kind of increase or decrease the prices depending on demand. I wanted to talk a little bit about this whole acquisition, making it a more or less attractive acquisition based on how many lifetime deals you have. I kind of want to question that a bit. And maybe, Matt, you might have some good insight here. So like for me, it seems like the concern comes in two parts. The first being you cannibalize customers that might actually have happily paid you a subscription instead. And then the second concern is with support, that you people show up ten years down the road wanting support for something that they paid ten years earlier. And so the first the first thing the first cannibalization question is like I can't help but feel like I can't help but question how realistic that is to begin with, especially when as Katie mentioned, she's already calculated, okay, the lifetime value of our customers is generally in the ballpark of two point five years, and we've already accounted for that. So that kind of takes kind of covers that to an extent. And then with the support, like, isn't it fairly easy to just pull up, you know, these are the people who have historically bought lifeline deals. This is what the support looks like. And, you know And the answer there is either, oh, crap, this really is an issue, in which case, you should probably not be doing lifetime deals for that reason and not for acquisition reasons, or actually, this isn't really even a problem because for whatever reason, this is already our ongoing support load and our lifetime deal people are like five percent or ten percent of that. which is less than fifteen percent of revenue.

Matt Cromwell
33:02-33:05
And so really, it's not an issue.

Leslie Sim
33:05-33:31
And so like when you kind of break it down that way, then I honestly don't really see how This should be like such a huge concern or the size concern that it is. And it's like always thrown around as a big concern for this reason. And I'm like, if you like, even poke at this bear a little bit. Actually, yeah, it's a good point.

Matt Cromwell
33:31-33:54
I think, you know, folks like Katie, for example, might not. Like it's not front of mind at the mind at the moment to sell the business at all. So it's not as important overall, and that makes a lot of sense. I think that the ones who get in trouble with lifetime licenses are the ones who have done it egregiously wrong.

Katie Keith
33:54-34:03
And I would say Oops. What will he say? Fine, I will answer.

Katie Keith
34:04-34:10
So, yeah, I know a lot of people, plug-in company owners, who

Matt Cromwell
34:09-34:13
put a limit on the number of years support in their lifetime licenses.

Katie Keith
34:13-35:12
So they'll say, okay, get updates forever, but we're going to stop supporting you after three years. I find that really defensive because as you said, Leslie, you've already done the math. You know that some customers will never have any support. Some will want it for four or five years, and that's why you've charged in that way. You've already done the numbers, and you can afford to support a small number beyond that. But I love what you said. I've never worked out how much we support lifetime customers and how it compares to annual. So I just put a note in my to do list to get some kind of report somehow. I suppose that would be from Help Scout or something to looking at the licenses. I'm sure my tech people can figure that one out. But it would be good to have some data. And I don't think anybody in WordPress has ever published data about the respective demand for support of subscription versus lifetime. So I think that would be really valuable for people.

Leslie Sim
35:12-35:58
Yeah, I mean, because it's I don't know, I was driving and I was thinking about it, and I was getting like, you know, people are so upset, like always talking about how Doing too many lifetime deals are gonna is gonna affect your acquisition prospects. And, like, well, have we actually like, how far have we have we like even gone, you know, step two down this like And it seems like no one actually has like everyone just like, oh, lifetime deal, bad acquisition prospects, bad. But it's like, okay, let's unpack that a little bit. And yes, it might not really be an issue. And again, if it is, then you shouldn't be doing that for the short term value of your business anyway.

Katie Keith
35:58-36:01
Yeah. Well, let's see what amazing point Matt was about to make.

Leslie Sim
36:02-36:04
Something egregious.

Matt Cromwell
36:05-38:02
Yeah. Somebody needs to get a new computer. I can tell you that much. The the way folks get in trouble is when they've done it egregiously wrong. And generally speaking, egregiously wrong is that they're is what Katie is avoiding. Any time that your new sale revenue, your top level new sale revenue is so dependent on lifetime licenses, you're selling them all the time, every day. And if you can you're like, hey, year over year, our new sale revenue is growing by ten percent. But if you subtract the lifetime licenses from that, you'll see that your actual new sale revenue is down year over year in one form or another. then that's when it's like, ah, well, clearly you're depending on this lifetime deals a ton. And long term, that's going to trickle out over time. And your actual growth of your actual company, your actual business is not anywhere near what you are what you believe it is. That's when it becomes problematic because you're trying to show growth, you're trying to show strength and stability. and that you're on the up. But it's really easy to see through it if you subtract the lifetime deals away from it. So but I agree. Like if you could show with clarity that there's not a lot of support requests from those lifetime folks overall, then the business is like, well, I don't want to inherit a whole bunch of support that that I then have to provide to people that I didn't sell to in the first place. That's, of course, one of their concerns. But that is easy to show that, that won't be the case. But it's more about like that it artificially shows your business as maybe being more revenue driven than it actually is on paper in the long term.

Leslie Sim
38:04-38:07
You want to see the compounding compounding subscription revenue, right?

Matt Cromwell
38:08-44:09
Yes. There's kind of no replacement for really good ARR or MRR at the end of the day. Yeah. I will say that on the on my experience with I think I'm fairly representative in the WordPress community in terms of being fairly anti-lifetime deals. And that speaks to my experience. And one of the things I did early in our history with Give is I actually didn't want to discount anything. We had no discounts on GiveWP for years and years and years. And that was because our primary target audience was nonprofit organizations. It's like why should we be selling this to anybody if it's not at a at the correct value to that customer base? So I was also anti Black Friday and things like that because art we should be priced correctly all the time. Over time, I really learned that there are still those folks who only buy because there's a discount. Even when they see the value and all those kinds of things, they're just kind of sitting there in the wings. Waiting to pounce and they really want your product and they they just want it to be just cheaper. That's it. And so discounting to me is a strategy. And it's not a devaluation strategy. It's a customer messaging strategy in one form or another. But another way that I countered the Lifetime Deal approach was how we built out the GiveWP plans. GiveWP is an add on model. And so we have at this stage, we have like thirty six different add ons that we built up over years, and they are hard to maintain, Leslie. So that is a foreboding thing to think about. But In our plans, as we developed our plans, we call them basic pro and plus. We do have an agency plan now as well. But basic pro and plus. Have always been there for a long time. And what we said is that any new add-on that we create that is in the plan that you purchased you will get that add on as well. And so that's kind of like the lifetime deal benefit while still being oriented around our normal annual recurring License deal. So and every time that we add a new add-on to any of the plants, whether it be basic or pro or plus. we emailed those customers and we say, hey, your plan just got better for free. So and they didn't pay us anything additional, except that maybe the intention and the hope is that they are going to renew their license because they got basically a free add-on without even asking for it. So that to me has always been a nice kind of medium. of being able to have some of that lifetime benefits. And we definitely see it in terms of like I can't say with like perfect authority that we kept our customers longer because of that. But I can say that our annual lifetime our lifetime life why am I failing on all my words our average lifetime of a customer tends to be longer than what I hear in the WordPress space. I will hear folks say between two and three years, and the average give customer tends to be more to four or five. Even though it's not a theme or even though it's not a security plugin or things like that. But it could just be because we're a donation platform and people need to continue to raise funds no matter what. My only other experience, honestly, has been vicariously through Cadence WP. Cadence has offered lifetime deals for a long time. And they're really careful about them as well. And they have also increased the price of those deals over a period of time. And it does impact the books for sure. But it's been really impressive to me to see that they're that the The theme customer is just a very, very different customer than the plug-in customer. It feels obvious if you just say it that way. But seeing it in the books, in the revenue and in the customer patterns and things like that, and the way that you cater to those customers has been really fascinating and interesting to me. There are lots of Cadence customers who absolutely only are buying Lifetime licenses for their themes because they're going to service a lot of different clients with that one product. In their mind, there's no reason why they should buy anything that's going to be this kind of like essentially like a developer tool for them. unless they can make it make sense over the span of dozens of clients over the course of several years. That's why the Lifetime Licenses make so much sense to those customers. and specifically for a product like Cadence that is made to build out a whole new WordPress website. So They helped me learn a lot about that there is some good value in offering that type of license deal in ways that I hadn't thought about until I encountered them. Oh, I lied. There's one other experience. I was working hand in hand with James Kemp while he was at Stellar with Iconic and Orderable. And James had some early success with iconic and offering lifetime deals. And he experienced it the way that everybody says that you will, that there's going to be this downside to it eventually. We definitely saw that the Lifetime Deal option gave a big boost. But then in the following year, if we didn't offer the Lifetime license again,

Matt Cromwell
44:08-44:13
then we saw that it was really hard to match those revenue targets.

Matt Cromwell
44:13-48:28
So if we're aiming to try to grow a brand by 10% year over year, It became this issue where every Black Friday, let's say, or every summer sale or whatnot, we had to offer a lifetime license for Iconic. because we weren't going to be able to meet those revenue goals if we didn't. And that starts to make it feel like the business isn't long term sustainable. So there was a year in particular where we just said, we're just going to eat that growth target and not offer the lifetime license anymore. and just have to put some notes in the books to say that, yeah, we didn't meet our targets and we knew that we weren't going to meet them for this specific reason. We got smarter and stronger and better about discounting strategy on Iconic and orderable, and we've actually seen really good mature growth there over a long period of time. despite the loss of lifetime deals. So in many ways, I feel like I like seeing a business not be dependent on the lifetime side because to me, it feels a lot closer to the actual ideal customer profile. I don't want to necessarily cater to the folks who are just looking to collect me. I don't want to just cater to the folks who just want to have lifetime for all the things. I want a customer who actually wants to use our product. And it just feels it just feels healthier to me overall, feels cleaner. I've never actually experimented on any product the way that Katie has with her approach in terms of just continuing to raise the lifetime product price and keep it at 15% of revenue only. It makes me really want to just launch a product just to try that technique out, honestly. So I'll keep you all posted if I actually do that. Nice. Yeah, we have a couple comments here. What is this one? Rob D says, Matt, how much of those new add ons are driven by your current customers asking for those features? That's a really good question that's not perfectly related to lifetime deals. But I will say that we have a couple episodes Katie says this all the time. We talk about customer feedback all the time, Matt. And it just is because it's a subject that I'm super passionate about. And it's really important to every single business. I don't know. Anyway, you know, Rob, I hate to say all of them. Are exactly related to current customers asking for those features. But it is something that we do very religiously, not only on GiveWP. but across all the stellar products, we really try hard to build out the things that customers are asking for. And that's for a lot of different reasons. One of them is honestly just feature parity with competitors. Customers will ask for features on our product because they've seen it in other products, whether it be other WordPress plugins or SaaS competitors. And with Give, it's almost always the SaaS competitors because they usually have really deep marketing pockets. and it's hard to compete against really big SaaS platforms. But they'll have features that we haven't thought of before. And we'll build them out because customers are like, I really want to use your platform because I really want to have it on my WordPress site. But you need to have this one feature. We log it, we tag it, we report on it, we talk about it in road map meetings, and then at some point it bubbles up to be the most important thing and we build it and ship it. It's, you know, really important. Another question here. I'm gonna not do well at that name. Let's see. Seiful Islam. Seiful? I don't know if anybody has a better way to pronounce it. But Saiful Islam says, in terms of the lifetime deal, which approach do you think works best? Leslie, what's your take on that one?

Leslie Sim
48:30-49:25
My take is actually the annoying take, which is it depends, right? And it's all about Using the right tool for the job that you have. And what's that thing about like if you have a hammer, all you see are nails? I think like sometimes people Use lifetime deals as a hammer, and they try to use it to nail sales in the head. And as you can see, that even from all three of our Latin Dio experiences, they are vastly different. And so it's really hard to say. And I think you sh if you're not sure what works best, you should actually work more on scoping and defining your problem so that you can then craft a solution that works for it. So that's my super helpful and unhelpful take.

Matt Cromwell
49:25-52:12
Yep. I agree with that 100%. We have another question here. Lots of questions today, which is awesome. And another name that's really going to be hard for me: Alvaro Goyas, I'm going to say. He says, what about the Envato marketplace approach? A customer can buy a plugin and have limited time support and buy extra support further ahead. Is it sustainable? That is one actually you're helping me remember. I actually have experience with this one too, actually. iThemes did this a really long time ago. They sold a few of their products with a lifetime license with a one-year support. Limit. So for the first year, you would get support. But after that, if you wanted to have support again, you would need to purchase a license that included support. The challenge with some of that is that all of our products include support at this stage. And it is essentially a problem that the Liquid Web side, iThemes, sold to Liquid Web and is now part of Stellar WP. It's the problem essentially that we inherited because we have a support policy today. Internally, that if anybody lands in our inbox, we are going to support them no matter what their problem is. And that means those folks who purchased one time forever ago sometimes land in our inbox. And the policy is supposed to be that we're supposed to upsell them. But the truth is, I can't do that. Like, we're going to support them. That's the bottom line. I would love to sell them on a new license or whatnot. But the truth is, that's not a great long-term sustainable support policy. So I find that policy in particular, Alvaro, to be not a good business move, especially in the WordPress environment, because Support. Like there's a lot of folks in the WordPress business who say you're not actually selling plugins, you're selling support because the plugin code is free in many ways. But the support isn't. We do have to pay for that. So personally, I want people to keep paying so that we can keep paying our support folks so we can peek. continue to provide support to all of our customers.

Katie Keith
52:13-53:04
Yeah. Honestly, I think it is a desperate attempt by Invato. to fix a deeply flawed business model. So they have, through their not having subscriptions for so many years, put all these product sellers in the terrible position where they're providing unlimited support for free. So they can't introduce subscriptions. Well, maybe they probably should have done actually, but they haven't. Instead, what they've done is they say, oh, well, now you've got to pay for six months' support every now and then, as and when you need it. That is not about the customer. It's not thinking about the customer's needs first. It's just a desperate attempt to resolve an earlier problem, in my opinion. So we shouldn't be looking at Invato structure as inspiration for our businesses. even though they've started getting a bit more revenue to make the support viable. Is that fair?

Matt Cromwell
53:05-53:13
100% fair, for sure. I mean, essentially, you see them, they're now trying to like sell support licenses just to compensate.

Katie Keith
53:14-53:21
And it's only six months, so you need to keep doing them. And it's just Don't start with that as a model.

Matt Cromwell
53:22-55:19
Exactly. We have one more follow-up here that we'll do, and then we got to get into best advice. Rob D again, Matt. Do you track how many of the new add-ons get adopted by the lifetime users and what is their satisfaction through a feedback survey? There's a few complicated aspects to what you're saying there. If you mean new add ons, I think you mean when I was referring to GiveWP and that we add new add ons to the plans. I will say that the Give folks don't have lifetime licenses. We don't have we never sold any lifetime anything in Give. Everything is only license-based. a number of sites that you can get, and everything is annual renewal on the give side. On the Cadence WP side, there are some lifetime licenses. And we do we're constantly monitoring feedback. Through our CSAT, which we do through support. But we don't have the capability currently to. to distinguish whether they're a lifetime customer or not. So we're not doing that on lifetime customers in particular. And then for the folks who actually get a new add on added to the give plans, we email them directly, and there is always a reply to in our emails that lands in our Help Scout inbox. So if we say, your plan just got better, you just got a free add on, people often reply, and our customer success team will see that. We always get really positive replies to those emails. I mean, it's like free plugin, this is great. So whether or not folks are super happy with the actual plugin and how it works on their website, it's another question. But generally speaking, that whole effort tends to be really positive for sure. We got one more question here. Katie, do you want to take this one?

Katie Keith
55:19-55:51
Okay, so it's a multi-parter. Hang on, that's not the right that's not the beginning. So we'll start with In terms of the lifetime deal, which approach do you think works the best during Black Friday, Cyber Monday? One, fifty percent discount on both yearly and lifetime. Two 50% discount on yearly and 20% on you said on yearly. So just discount your yearly. 50%. Okay.

Matt Cromwell
55:52-55:56
I think that one, the first one you highlighted is the full question.

Katie Keith
55:57-57:14
Yeah. The thing with Black Friday is that if you analyze your renewals in subsequent years, you'll see that your renewal rate is lower from Black Friday customers compared to customers that buy at other times of year. That's just how it is because of impulse buys and things like that. They're less likely to keep using your product. So with that in mind, my priority becomes to get the maximum value out of the initial purchase during that sale period. And that means discounting lifetime deals. Because they're even less likely to renew than a normal customer, I would rather they bought the lifetime deal and then didn't use my product than that they did that with the annual. Because they're buying, spending like three times more or something. So, my personal approach is to discount the same amount When we've looked at support in the past, we've worked out that the most we can afford to discount lifetime is forty percent at Black Friday, so I wouldn't go as far as fifty. But that's different for each business. But yes, I'd say discount lifetime because they're less likely to renew anyway, so get that revenue now. I know that's controversial though. So anybody else, feel free to stand in.

Matt Cromwell
57:14-58:24
I'll caveat a little bit because I think your perspective is based on your model with lifetime. The fact that you see a dip in renewals, that's absolutely standard in the WordPress space during the Black Friday time. We caveat that by doing an early renewal campaign ahead of Black Friday. So essentially, we try to get ahead of that with all of the Black Friday folks. and we give them the opportunity to renew at a cheaper rate in the but not at the full forty percent or whatnot. So we'll say for existing customers, we're offering you an early renewal rate of 25%. And here's where you can do that. And they'll renew a little bit early. before Black Friday, because there are lots of folks who love to game the Black Friday system by canceling their subscription and then buying new again at the Black Friday rate. We try to prevent that a little bit. It has helped a ton on our renewal front. It's not perfect. It's definitely not the norm for our normal renewal rate. but it has helped buffer it quite a bit actually.

Katie Keith
58:24-58:34
So I really like that. I've written it down to consider. And then presumably you would remove those people that did renew early from your Black Friday emails.

Matt Cromwell
58:34-58:39
Yeah, exactly. Yeah. We actually, are we planning on a Black Friday episode?

Katie Keith
58:40-58:42
No, I put something in Slack and nobody replied.

Matt Cromwell
58:43-58:53
We should revisit that because there's quite a few things we can talk about. Well, let's do. We've gone a little bit long. We are keeping Leslie way up late.

Katie Keith
58:53-58:55
Let's go in the morning now.

Matt Cromwell
58:55-58:56
Yeah.

Katie Keith
58:56-58:58
It's really the next day.

Matt Cromwell
58:58-59:06
She's in the future. Leslie, what is your best advice to folks who are considering lifetime deals for their business?

Leslie Sim
59:09-01:01:38
I'm going to have to go with the thing that I said earlier, which is again like helpful and unhelpful, which is you have to be clear on the problem that you have and think about whether Whether lifetime deals are the best tool for the job, and what kind of lifetime deal is the best tool for the job. Again, it's like it's not that helpful, but I think at the end of the day If you just kind of so it was interesting because while I was running my lifetime deals, there were a bunch of other people running lifetime deals as well. And I got to kind of see Parallel lifetime deals take place. So one person that I saw, they were they were kind of trying to copy mine, but we had like very, very different scenarios. Our circumstances were completely different, our products were completely different But they were just trying to copy what we were doing. And I think it didn't go well for them just because the scenario was completely different. And then on the other hand, we had Pi calendar, who was offering, and we're like the exact same space, and they were offering Very different deal from ours, much simpler. It was, I think, $1. 99 or $2. 99 for unlimited licenses forever. And it was like a fantastic deal. And I think So they definitely caught the eye of the Facebook group crowd because I saw a number of people being like, oh, don't buy Event College, buy PyCalendar because they're running a deal as well and it's much cheaper and so on and so forth. So I am quite curious to and I would like to talk to them and see kind of how their deal went, just because it was like rerunning it at exactly the same time. And again, like that just goes to show even with lifetime deals, you can run the exact same deal as me and like do poorly, or you can run a completely different deal from me and presumably do well. And so it's really tough to say like, oh yeah, left and deal, sure, you'll definitely make money, you'll definitely get upfront revenue. and all that kind of stuff, because like that might not be the case. And you really need to be clear on what problem you're trying to solve before you go ahead with the solution.

Matt Cromwell
01:01:39-01:01:42
Nice. Katie, what's your best advice?

Katie Keith
01:01:42-01:01:59
Mine is to follow the numbers, get the data and use that to calculate at what point lifetime licenses are sustainable and worthwhile and even beneficial for you because it's not that straightforward. So do the numbers.

Matt Cromwell
01:01:59-01:03:14
Love it. My advice is figure out what your actual problem to solve is because lifetime deals is probably not the answer to that problem. I think most often there's probably three or four other ways you can solve that problem, and Lifetime Deals is probably like the fifth option on the list. So don't just be like, I'm going to run a lifetime deal. Don't just be like, well, I know that people launch with lifetime deals, so I'm going to launch with lifetime deals. Think about it, figure out what the actual problem to solve is, think about all the ways you can solve that problem. And if it's like, no, I'm really going to have the biggest bang for my buck by doing a lifetime deal, well, then great, fine. Listen to what Katie says, listen to what Leslie says, do it right and smart and well. But most likely, I think if you ask a question first about how I can solve this problem, you'll probably find at least three other answers that are probably a better answer first. Maybe not the most consensus driven best advice in this group, but that's my best advice. Well, this was great. Leslie, love having you on as always. And where can people find you online, Leslie?

Leslie Sim
01:03:15-01:03:28
They can find me on Twitter at Leslie L-E-S-L-E-Y underscore pizza. And Event Coi is E V E N T K O I dot com.

Matt Cromwell
01:03:29-01:03:32
All right

Katie Keith
01:03:31-01:03:48
So yes, thank you so much for watching. Oh, it doesn't say what next week's is. Is that the one where we've got We're talking about whether we're building for agencies or end users, or is that the one next week?

Matt Cromwell
01:03:49-01:03:49
It might be.

Katie Keith
01:03:50-01:03:51
I don't think I'm there for that one.

Matt Cromwell
01:03:52-01:03:53
That's yours.

Katie Keith
01:03:53-01:04:22
So yeah, we will heavily promote it anyway. I think that's next week where we're talking about who we're building for and how that affects things like our marketing. How do we word our product pages if we don't know if it's an end user? or a developer or agency building it. So yeah, watch next week. And also, if you're enjoying these shows, do us a favor and hit like. Subscribe, share with your friends, reference it in your newsletters, and again, catch us next week. Bye.