Solved: Does selling a lifetime subscription make sense?

Hi there,

Thanks for reaching out – happy to give you some initial thoughts and guidance on your MRR plateau and the idea of offering lifetime subscriptions for your SaaS product. It's a common problem, and there are a few avenues we can explore to get things moving again. Seems like you've hit a bit of a wall at $5k MRR, and you're wondering whether a lifetime subscription could be the ticket to unlocking more growth. It’s a fair question, and something we see quite a bit.

We'll need to look at what's working

First things first, let's take a closer look at what's currently working for you. You mentioned you're already using Google, Facebook, LinkedIn, and Instagram ads, as well as cold emails and daily activity on Reddit and X. That's a decent spread, but it's worth digging into the specifics. What are your conversion rates like on each platform? Which keywords are driving the most qualified leads? Which ads are performing the best? Without a clear picture of what's working, it's difficult to make informed decisions about where to focus your efforts.

I'd recommend setting up proper conversion tracking across all your marketing channels. This will allow you to see exactly where your leads are coming from and how they're converting into paying customers. Once you have this data, you can start to identify the most profitable channels and double down on them. This might involve increasing your ad spend on the best-performing platforms, refining your targeting, or improving your ad copy. It might also involve scaling back or eliminating channels that aren't delivering results.

For example, I remember working with a software client where we saw really good results with UGC videos - lots of angles to test there. Proper split testing and campaign structure went a long way, and the most important factor was usually targeting. There were usually lots more audiences we could test out, and we kept testing until we found new winners.

I'd say you need to think carefully about Lifetime Subscriptions

Now, let's talk about lifetime subscriptions. They can be tempting, as they offer a quick influx of cash and can create a sense of exclusivity and loyalty among your early adopters. Grock's suggestion of pricing them between $500 and $1,500 is something to think about. However, there are also some significant downsides to consider. The biggest is that you're essentially giving away your product for a one-time fee. This means you're sacrificing recurring revenue, which can make it difficult to sustain your business in the long run, especially if you have high server costs and provide extensive customer support.

You've gotta think about the long term. Will that one-off payment really cover the cost of supporting that user *forever*? I remember one client who offered a lifetime deal way too cheap and ended up regretting it big time. They underestimated server costs and the amount of support some users needed. It almost sunk them.

Before you introduce lifetime subscriptions, I'd recommend running a detailed financial analysis to determine whether they're actually sustainable for your business. Factor in all your costs, including server costs, customer support, development, and marketing. Then, estimate how many lifetime subscriptions you'll need to sell to break even. If the numbers don't add up, you might want to reconsider.

Maybe instead of lifetime, try annual plans with a discount. Gets people to commit for longer, but it's not quite as scary as "forever". Plus, you still get recurring revenue. I'd recommend testing both options to see which one performs better. You could offer a limited-time lifetime subscription to generate a quick burst of revenue, then switch to annual plans with a discount.

You probably should try improving your funnel and ads

Another area to explore is your funnel. Take a good look at your website, your landing pages, and your signup process. Are they optimised for conversions? Are you making it easy for people to sign up for your product? Are you clearly communicating the value proposition of your product? Any increase there will help you convert more traffic and so lower your CPA.

If you're not sure where to start, I'd recommend running some A/B tests to see which changes have the biggest impact on your conversion rates. You could test different headlines, different images, different call-to-actions, and different pricing plans. Even small changes can make a big difference.

The most important factor is usually targeting. There are usually lots more audiences you could test out. Keep on testing until you find new winners. Creative testing: more creative formats, different messaging, mix things up to increase your chances of finding new winning creatives.

Also think about retargeting can help activate more users, reduce abandoned registrations, and convert more of your website visitors. Which all works to lower your acquisition costs.

You'll need to test other ad platforms

If you're not seeing the results you want with your current ad platforms, it might be time to explore other options. You're currently using Google, Facebook, LinkedIn, and Instagram, which are all popular choices. However, there are other platforms that might be a better fit for your target audience.

For example, have you considered running ads on Reddit or X? Both platforms have large and engaged user bases, and they offer a variety of targeting options. You could also try running ads on industry-specific websites or blogs. I usually see apps listing in directories like Betalist, indie hackers, Capterra, Producthunt. That might work to get attention from early adopters and get you your first users. You might get some initial feedback as well that could help improve the app.

You can also get around this by expanding to other ad platforms. I recall one case where we had a software client who was struggling to scale their Meta ad campaigns. We found that by expanding to Google Ads, we acquired 3,543 users at £0.96 cost per user. There is a limited number of people that are most likely to convert within each audience. So if you've maxed out the pool of people likely to convert with your budget on Meta ads, you could try a new ad platform and tap into a different audience this way. Usually this won't make sense though until you've scaled to a higher ad spend.

I've detailed my main recommendations for you below:

Scaling a SaaS business can be a right pain, and it's easy to get stuck. You're not alone in hitting a plateau, and hopefully this'll get you started!

Hopefully some of these initial thoughts have been helpful. It might be worth discussing your specific business in more detail to come up with a detailed action plan. We offer a free initial consultation where we review current strategies and accounts, which often gives a taster of the expertise involved if you decide to work with us.

Regards,
Team @ Lukas Holschuh