Subscription or one-time payment?
Sebastian Janus - derStartupCFO
6 replies
As I am working a lot with founders I often get asked:
Which products do you believe are better suited for a subscription model and which are more appropriate for a one-time payment model? Additionally, how do you determine which pricing model is likely to generate the most revenue prior to launch?
So what is your opinion?
Replies
Rohan Chaubey@rohanrecommends
Some tools cost almost nothing to serve the LTD customers. They can be covered with LTD costs or by existing customers' small portion of the profit.
LTD buyers buy tools and don't use it to their full potential. So 20-80% of the buyers may not even use the tool. 😃
Sharing an example:
A video editing tool costs 0.03 USD per video export. In lifetime, a user may not even export 1000 videos.
The company may receive 30-35% profit from AppSumo and they still don't incur a loss.
Does this help you understand the math of their business?
My suggestion:
I recommend not opting for LTD launch if it costs you a lot of money to serve your customers.
Instead, request marketplaces to run an annual deal for you and not a LTD. If they don't agree, then launch on ProductHunt, and offer a deep discount on annual plan for Product Hunt community.
Do your best to promote the Product Hunt launch. If you need suggestions, reach out to me via links on my profile.
Good luck!
Share
Subscription. I don’t like long term commitment with apps unless they are really good. Newer apps come out all the time and I never want to be stuck with a yearly subscription on something I might not use. I’d like to determine that month by month and be able to cancel Whenever I want. I’ll do a year if it’s a really good app with a really good discount or I really like the app. I have never done a lifetime app.
Subscription - As a customer, I don't want to commit to any SaaS because I know there will be always a better tools.
It always depends on what you offer. for example, if I would have the option I love to go with a one-time payment for Netflix, At the same time I will prefer subscriptions for other OTT platform as I know the content is not quite freuent
I think subscribtions are the best when trying something new for the first time. One-time payment in this case feels like a way too serious commitment :) And I feel like today in most cases you choose a product fast or go away.
But of course, it still depends on the product a lot!