UPDATE 9/1/20 – We have rebranded to Spotlightr, however I am keeping the content of this article as vooPlayer
“We want to use vooPlayer but we can’t afford to pay a recurring fee!”
This is something we heard quite a bit from potential customers contacting us at the helpdesk and is one of the reasons why we ultimately decided to run a deal with the folks over at AppSumo.
But we’re a SaaS right? We can’t afford to sell licenses for a one-time fee and expect to improve and grow the app while maintaining very high-end customer service levels. Right? Right????
That’s pretty much our mindset, like most other SaaS companies, but there are always exceptions to the rule.
But before I get to AppSumo, I feel like a brief history of our business will help give a greater overall picture.
Here’s where vooPlayer stood at the time…
The vooPlayer platform has actually been around for quite a few years. We’ve been slowly bootstrapping our way year after year with small improvements and slowly developed new versions.
But we realized in late 2015 that the truth of the matter was that we had to move to a recurring fee model in order to continue our growth. Of course selling licenses on our platform for a one-time fee was definitely easier. This is how we started selling vooPlayer.
In 2016 we decided to move on from every other project we had (except for one other) and concentrate on vooPlayer. We rebuilt the platform from the ground up as we learned quite a bit over the years while releasing multiple versions. Then in the spring of 2017 version 4 was upon us and a whole new world was upon us as well. Although we had customers already using vooPlayer, when we released version 4 we really felt like we were just getting started.
When we changed our pricing model to a recurring fee with the release of version 4, our whole outlook on what kind of customers we need and how to find them changed. We took a look at all of the people that purchased our product with a one-time fee, and an overwhelming majority of them never even uploaded a video. Not one! These are obviously not the customers that we want. We needed customers that used our platform and that found tremendous value in it.
That was the challenge that we had and still have to this day. And quite honestly, that is why we weren’t really keen on selling on AppSumo or any other life-time deal websites or groups. It felt like doing that just delayed the inevitable which was we had to change our business model in order to grow. People who are only willing to pay (or can only afford to pay) a small one-time fee are not our ideal customer.
What changed our minds?
Well, one of the biggest reasons was that the license we needed was already there and already had thousands of users. Every customer that had purchased from us over the years when we sold licenses for a one-time fee was always promised they would have their license to vooPlayer as long as we were still in business. So when we moved over to a recurring model we created 2 new license levels. One for all of our new customers paying recurring that we called ‘Enterprise’, and one for every customer that paid one-time that we called ‘Pro’. So all of our Pro customers basically had an new and improved platform to use and all of their old videos from older versions would still work. The only caveat was that any new videos had to be created on version 4 as we were not allowing new videos on version 3 anymore.
So we had the license already there, we could offer our Pro license.
But again is this going to be worth our time? Besides a quick influx of revenue what are some of the benefits?
Before the promo with AppSumo we actually did a promo with a Facebook group as sort of a test for offering a one-time price for our platform. This was even before we even began talking to AppSumo, so they weren’t even on our radar yet.
As far as LTD (Lifetime deal) Facebook groups it is probably one of the biggest if not the biggest. They approached me about it and I was definitely skeptical at first. But I joined the group and when I read through all the posts I saw that the group had a lot of passionate and engaged people that were just starting their businesses or in the early stages of growth and really appreciated the opportunity to use platforms that were ordinarily sold under a subscription model.
So I thought…OK, let’s see what kind of response we get, why not? It’s a fairly small audience but big enough to give us an indication of success. We would offer discounts to our subscriptions for anyone that wanted to upgrade and hopefully gain some subscribers too. And with all the people talking about it in the Facebook group we would get great feedback not only on the offer but on the platform itself.
We actually talked about the discounted subscription plans as part of the deal if you purchased a Pro license, so we definitely pre-sold these plans as well (which was different from the way we did it with AppSumo).
Here were the positive outcome we thought would arise from this deal:
- Passionate customers use our product and give great suggestions for improvements and new features. This is something that cannot be overlooked and something we always love. Of course not all of them are going to be our ideal customers, but we thought we would be still get some good use cases from the new customers.
- Quick influx of revenue. You can’t ignore the fact that these promos do give you a quick chunk of revenue that we can reinvest in marketing.
- Customer upgrades. My goal was to get at least 20% of our Pro customers from this offer to upgrade to a recurring subscription at a discount. If they loved the platform and found tremendous value then the discounted subscription would be hard to pass up.
We ended up accomplishing all 3 of those tasks. In fact, we surpassed our goal of 20%. Just over 30% of our customers upgraded to a discounted subscription. And our refund rate was very, very low. In the end we sold about 350 Pro licenses with 30% upgrading and a refund rate of less than 1%.
For a promo to a group of about 6000 or so people I was pretty pleased with this test. Actually that was about how many were in the group at the time, I have no idea how many eyes actually got on the offer.
Which (finally) brings me to AppSumo…
Before the deal started I negotiated with Jeff from the AppSumo team on what the pricing, terms, commission, etc would be.
We settled on $79 for the price point which was higher than most AppSumo deals. Most are $49 but I just thought that was way too little for our platform. The real value of our Pro license if you were to price it for one-time buying is at least $500 in my humble and very un-biased opinion, but we certainly understand AppSumo’s perspective in wanting to bring incredible value as that is what they are known for. We were happy to oblige.
AppSumo does take a sizeable commission from each sale but when you compare it to their reach it makes sense. I don’t really want to disclose details on this as every deal is different.
The promo would begin on a Sunday night by simply adding the offer to their store. They would wait until Thursday that week to see the response to the product. If the response was good, and people were giving 5 taco reviews, then they would feature our product that Thursday and then mail on it the following Sunday night. The product would be available for a little under 3 weeks total, with one more mailing before the offer closed.
OK here we go, the fun begins…
Product went up on their store on a Sunday night like I said. They did email out that night for a different product that was featured on their homepage, but the traffic that came in for that also looked at the what else was available. The questions began immediately, much to my surprise. I was not expecting a whole lot of action on it so quickly. I was actually online to monitor things during this time and answered questions as best as I could.
Sales were pretty steady for those first few days, 200 to 300 per day and steady. Initially we had some haters who complained about this and that, not enough of this, why do I need a subscription for that, etc but I just told my team to ignore the noise, explain the deal, and be transparent. If they don’t like the deal, they don’t need to buy it. Unfortunately some people act like we are holding a gun to their head.
We started getting alot of positive reviews and the questions continued to come in. Many, many questions were repetitive. It was OK though, we just continued to answer them the same. Thursday came and AppSumo featured us on their homepage. It didn’t do a whole lot to change sales it seemed, as they continued to be steady at a few hundred per day.
Then on Sunday night they mailed out and Monday was pretty busy to say the least. We sold over 500 that day and an insane amount of questions poured into the offer page as well as our helpdesk. We had an “all hands on deck” for everyone on the team to jump into Intercom to answer questions that came into our helpdesk.
Sales continued to be steady that week holding at a few hundred per day like the the previous week. On the third and final week they dropped to about 100 per day until AppSumo emailed out on Thursday before the deal was going to close. They added a time limit to the deal, closing on Saturday I believe, and added a limit to the coupons as well. Over 700 were sold that Thursday, which made it the busiest day of the promo, and then about 300 more sold on Friday morning. And then it was sold out. It didn’t even make it to Saturday.
So like I said the entire promotion lasted just under 3 weeks. Just about every aspect of it was positive. And it was honestly a ton of fun. We received a tremendous amount of positive feedback, great reviews, ideas for improvements, etc. It was really amazing to see so many people take advantage of the offer and love it.
We received 250 reviews and over 200 of them were 5 tacos. By the end of our promotion we set the record for the best reviewed product in the history of AppSumo. That was pretty awesome to hear. Not sure if that still stands but awesome nonetheless.
In order to make sure happy people left a review about how they were happy, we encouraged them to leave a review when we worked with them in our helpdesk. So basically they would submit a ticket, we would work with them on answering their questions and/or resolving their problem, and then we would ask them to leave an honest review on the AppSumo page. To encourage them even more, we ran a contest. We gave away free lifetime accounts to our Enterprise license (which was $47/month or $397/year at the time) in a random drawing. Anyone that left a review would be put in the drawing. This definitely helped us get more reviews.
We also received 313 questions. Many of them were very good questions, although quite a few were repetitive as I mentioned. We did take an opportunity to create knowledge base articles to address the questions that came up over and over. If you run a promo you should definitely do this as it saved tons of time.
The offer page was shared over 3800 times. We did contribute to helping this and here’s how…when customers redeemed their coupon for the account we offered them extra storage if they shared the offer with their friends. This was a win-win all around…we got the page shared, customers got more storage, and their friends were alerted to the super awesome platform on sale.
Come on nothing negative? It’s all so awesome?!?!
Well, it pretty much was all awesome. If there was any negative to the experience it was some reviewers who left poor reviews only because of what they “didn’t get”. They basically reviewed the offer, not the platform. Those bad reviews all looked like this:
“You need to upgrade for XXX feature, these guys suck. 1 taco”
“What???? I don’t get XXX feature or XXX feature? Boooo!!!! 1 taco”
If someone leaves a bad review because something doesn’t work, or something about the UI is poor, or some feature is buggy, then I welcome it. We are happy to listen and fix stuff, make adjustments, etc.
If we had totally removed every feature from the user interface that was not included, I’m confident every review we received would be pretty positive. But it’s the nature of some people I guess, they want it all and they want it for as little as possible. I’ve been doing this a long time so I’m used to the haters but it was a bit disheartening to the team at times.
But like I said above…we just answered their questions in a professional manner, continued to explain the deal, and were as transparent as possible. That’s all you can really do.
There are some diminishing returns
Of course one of the biggest things to keep in mind here is the deal itself you are offering. You are only getting paid once so any features or access to your platform that costs you on a recurring basis will obviously eat into your profits.
The big issue here for us was storage. Without getting too deep into the details of our infrastructure, we wanted people to be able to upgrade easily from Pro to our subscription plans. So any storage we had for our customer videos was being paid for on a monthly basis by us. The more we stored, the more we paid every month. This accounts for the low amount of storage we were able to offer. So even though our platform does allow videos to be stored with a 3rd party and allow those videos to use our player and player features, some customers really want to us to host their videos too.
We had to get creative with this storage situation as we needed to keep a balance between performance for our customers and costs to us for storing their videos and not collecting a monthly/yearly fee for it.
And The Verdict Is…
The AppSumo team, Jeff and Chris and others, were great to work with. They also took our feedback seriously and made adjustments to the deal and the copy to make things more clear and better for the Sumo-lings.
In the end after refunds we sold just over 4300 coupons and brought in just over 2800 new customers. So you can see many people actually buy multiple coupons to “stack” the deal with more features. We offered more storage and a few other features that could be added by buying multiple coupons. The added storage was by far the most used.
I’ll do the math for you…basically the promo grossed about $339,000+.
And then from those 2800 unique new customers, 7.7% of them upgraded to a subscription plan. My goal for this promo was 10% so we missed the mark there. Overall though we were extremely pleased.
Again a big thanks to Jeff and the rest of the AppSumo team! It was a fun ride and we appreciate the opportunity to get exposure to your audience.
My tips and final thoughts for any of you guys thinking about doing a promo:
1. If you are worried about hurting your brand, don’t. In my humble opinion doing a special promo like this once every year or two is a great way to open up your platform to an audience that might not have a chance to use it. I think the PROs far outweigh the CONs
2. Be prepared for the same questions over and over. Create some KB articles for the promo and keep sending people there. We actually made an entire category called “AppSumo Promo” that contained a bunch of articles. Keep posting a link to there and it will save you same tickets and questions on the offer page.
3. Ask people to leave a review. Many times the loudest people are the ones that aren’t happy. So when people contact your helpdesk, ask them to leave an honest review. We even gave them a small incentive, but it’s important that they leave an honest review of course.
4. Be as transparent as possible.
5. Depending on the size of your helpdesk, you may want to do a “all hands on deck” for when AppSumo mails out. Tickets and questions on the offer page came in like crazy.
6. Watch for diminishing returns. You do want to create an offer that is awesome, but don’t give away too much and regret it 2 years down the road. I’ve seen some vendors do this and change what these LTD customers have access to a year or two after the deal is done. Don’t do that, it’s not cool. Think through your offer carefully and provide a balance between value for AppSumo customers and cost to you.
– Bill Zimmerman, CEO of Spotlightr