a single source, nothing corroborates it

Price a lifetime deal against its lifetime value

A round number is not a price: work out what the customer would have paid over the years they actually stay, because a decade of service sold as two years of revenue is a liability you carry forever. Fourteen to sixteen times the monthly fee buys roughly a year of runway. Cap how many you sell, set hard usage limits, show the quota in the interface, and have an overage price ready before the first one goes out.

The method

1. 01

   If you want a twelve month runway from a lifetime deal, price it at fourteen to sixteen times the monthly fee.

2. 02

   Price a lifetime deal against expected lifetime value, not against a round number. Kahl's worked example: a $10 monthly product priced at $200 assumes two years, so a customer who stays a decade costs you eight years of service for free.

3. 03

   Set and enforce hard usage limits on a lifetime plan, show the quota in the interface, and have an overage price ready.

4. 04

   Cap the number of lifetime accounts you sell so the long term service liability is bounded.

5. 05

   Try an annual plan before you try a lifetime deal. It generates comparable cash today without the open ended future cost.

What it returned

• 14

  14 to 16 times monthly for a 12 month runway

• $10

  $10 per month, $200 lifetime price, two years assumed, ten years actual, eight years unpaid

Sources

• Lifetime Deals and SaaS Businesses – The Bootstrapped FounderArvid Kahl · thebootstrappedfounder.com · Lifetime Deal, The Reduced-Risk Edition · 2021-04-01