How to Generate Annual Recurring Revenue (ARR) with Lifetime Deal Customers?

The success of a SaaS startup is in its ability to create steady recurring revenue. 

SaaS startups find ways to monetize long-term customer relationships with strategies such as offering lifetime deals.

However, B2B SaaS businesses need to take the right approach if they are to generate recurring revenue from their Lifetime Deal users. 

How to Generate Recurring Revenue with LTD Customers?

A common advice, or practice to generate recurring revenue from LTD customers is by gating updates and upselling to your LTD customers. 

While it may work for some businesses, it is not advised to rely on such a practice. And it may restrict you from leveraging your LTD customers for long-term benefits.    

The Right Approach to Convert Your LTD Customers to Subscribers

To start with, do not see your LTD customers as discount customers and treat them the same as your monthly paying customers. 

The best way to do this is by making sure your LTD customers are actively engaged with your product. Focus on onboarding and educating them about the features available, and how they can get the most out of it. This will help increase their engagement, usage, ROI, and satisfaction with your product.

As your product evolves over a period, with the feedback received from your LTD customers, let them come for more.

Your LTD customers will happily come forward to become paying subscribers for the features that you add over time. 

You can offer them upgraded plans, additional features, or even discounts on yearly subscriptions. This will help convert your LTD customers into loyal subscribers. Customer education emphasizing the value of your new features along with excellent customer support will act as a great catalyst to help you achieve this. 

SaaS founders and product marketers must do it with care to ensure customer satisfaction and retain the loyalty of your LTD customers.

Be Upfront with Your Lifetime Deal Customers

Upselling is definitely the way to generate recurring revenue from your LTD customers. 

But you should be upfront about it from the beginning.

For example, if you are going to add a feature to your product, communicate it with your LTD customers. Let your LTD customers know whether the new features are included in the Lifetime Deal or not. 

Especially if the features are going to incur a month-on-month cost for you, let them know in advance as it could mislead your LTD customers. It is more likely to happen when you’re sharing your product roadmap with your LTD customers during your Lifetime Deal Live period.

Never blindside your LTD customers as it can leave a lasting bad impression on your brand.  

Be Transparent about Upselling

When it comes to upselling your LTD customers, transparency is key. Nobody likes being sold to, B2B customers much less. 

It is true even if your product can deliver the highest ROI. 

Be transparent with your LTD customers if you are going to upsell to them.

For example. let’s say you’re building and releasing updates for your product based on the feedback you received after closing your Lifetime Deal. 

If you’re rolling out, say 15 new features, communicate it with your LTD customers. Let them know which of these features will be available for them, and that the other features will be available only for the subscribers since they incur recurring costs. 

You may even go further to elaborate that these features are going to cost you more in terms of additional server costs or if you’re paying a third-party vendor to make those features available for them.  

Do not leave out any critical information, since transparency will help your LTD customers make an informed decision about whether to upgrade or not. 

Do Not Gate Your Lifetime Deal Users

Take measures to ensure that you are not gating your LTD customers, or that your LTD customers feel that way. 

For instance, if you are rolling out a feature exclusively for your subscribers, make sure to provide some sort of workaround or alternative for your LTD customers. This could be anything from providing access to the feature on a limited basis or offering discounts for upgrades.

The idea is to ensure that your LTD customers do not feel left out or gated and can still benefit from your product in some way.

It is important to foster a sense of inclusion and belonging among your LTD customers. This can be done in many ways such as offering exclusive access to new features on a trial basis, early access to upcoming features, or even exclusive discounts for upgrades.

But do not gate them saying that they have to pay extra if they have to access your product. They have already paid to get access to your product, so let them use it without any hindrance.  

Strive to Create a Win-Win Scenario

Allowing your LTD users to continue to use your product to grow their business alone will emphasize the long-term value of your product.  

And when your LTD customers see that, they obviously will want to invest more in your product.

It is a good idea to offer different packages for your LTD customers. This will give them an opportunity to upgrade their subscription and get access to more features or services.

You can also offer discounts on upgrades to encourage your LTD customers to invest in your product. This is especially useful if you’re adding new features that require additional costs from your side. 

Conclusion 

SaaS businesses emphasize the long-term value that comes with subscribing over the short-term savings offered by a lifetime deal.

It is important to ensure that LTD customers feel included and not gated from your product. Transparency is key when it comes to upselling. Offering discounts on upgrades can be an effective way of encouraging them to invest in your product.