benefits of lifetime deals for buyers and sellers

Benefits of Lifetime Deals for Buyers and Sellers

Buyers of a lifetime deal will benefit if they can do a one-time purchase for a product that they need at a price lower than they would normally spend for multi-year subscriptions. Lifetime deals are very popular with shoppers looking for a good value.

Just because a lifetime deal is beneficial for the buyer it does not necessarily mean that offering a lifetime option is good for the seller. Businesses have ongoing costs and lifetime deals may leave them with supporting users who are not generating any further revenue. This realization has lead some shoppers to go so far as to ask vendors not to offering lifetime options! The thinking is that if the business does not have a sustainable income then it may close and everyone looses.

There are a couple of problems with thinking that lifetime deals are always bad for the seller. Some vendors carefully track customer subscriptions and their average duration. If customers typically drop off after two years then pricing a offer at the three or four year mark allows the company to capture more revenue per customer than they had been. Also, lifetime deals are offered under different conditions. Some vendors maintain a lifetime option while others offer a one-time payment only for a short period of time. When does it make sense to maintain a lifetime option? Usually when support, maintenance, and provisioning costs are low. Some products are complex and need a lot of support while others do not. There are costs to delivering a product and updates digitally online, but they are usually an order of magnitude lower than dealing with physical products. Occasionally vendors will decouple support from updates and only offer a single year of support but ongoing product updates.

Some creators of new products turn to a lifetime sale to generate a large cash infusion. They would prefer to carry some lifetime users rather than take investments from outside sources and loose control of their company. Even established vendors have turned to a one-time lifetime sale to generate revenue.

Companies seeking funding want to show that they are viable and this means having a minimum number of active users on their platform. I’ve seen new companies basically treat their lifetime user community as early adopters who provide feedback and suggestions. Responding quickly to user feedback is a great way to build fans, who speak-up and promote the product in their respective communities.

Sometimes, the company will pivot from a lifetime plan to a monthly recurring revenue model when they feel the product or platform is ready. Not all new companies successfully navigate the transition, so there are risks for the buyer, which is a reason that sometimes the costs are lower than they would be for a more established product.

I’m sure that I have not covered all of the advantages or disadvantages of lifetime deals, but I hope I’ve provided some food for thought. In some circumstances a lifetime option makes sense and in others it does not. It is up the the vendor to evaluate and decide the pricing and purchase options.

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