Lifetime Deals 101: how and when run lifetime deals for your startup
You’re launching a product on Product Hunt. It makes sense to offer a life time deal, right? Everyone else does it. Not so fast! Perhaps, this hack doesn’t fit your product.
Most platform launches are accompanied by massive discounts or at least life-time deals. It’s very tempting to seduce beta users with attractive pricing — especially, if you’re a new player on a well-developed market and offer something that other companies have been selling for years. The best way to stand out is to offer a super competitive pricing so that customers switch, right? In reality, it’s not so easy.
Jay Clouse, a founder of Cartfuel — a service that allows users to create a payment embed form and start monetising anything — is a huge fan of lifetime deals. He says that they are the best way to get some extra cash to fuel up your runaway for a month or two. But he still admits that switching from lifetime to MRR is very hard — partly, because the target audience got used to this lavish offer. Partly, because the word had already been spread that your service has lifetime deals and when visitors land on your page and find none they leave disappointed and bitter.
Other downsides of the lifetime deals:
- When users get lifetime deals they don’t rush to use the product — it’s for the lifetime now, so there’s no hurry. That prevents you from getting that valuable feedback you were looking for all along.
- By lowering down the price you lower down the perception of your product value. Customers don’t recognise it as valuable any more and don’t create strong relationships with the brand or a founder
- Super seducing offers attracts wrong customers, not your target audience, the ones you’d want to serve. Therefore, the feedback you will be getting from them is not very relevant.
- You’re getting users which increase your infrastructure costs but your margin with them is very low, therefore the cash you were hoping for when creating this offer, gets burnt faster than you expected.