Would you rather "invest" in a lifetime option, rather than pay a recurring fee?


(Leland Fiegel) #1

Lifetime pricing in theme clubs has long been derided as “unsustainable” ever since WooThemes announced they were removing the option in favor of more limiting, recurring plans.

However, from what I’ve heard, average theme club attrition rates hover between two and three years. Therefore, as a theme shop owner, you can price your “lifetime” price at somewhere between 2-3x whatever your annual price is, and not really be losing out.

Obviously, this can vary for you and there’s no way to know what your attrition rate will be for sure without actually being in business for a sufficient amount of time.

It also wouldn’t really make sense for something like hosting (anyone remember NodeKi?) which requires ongoing, fixed resources. After an initial “learning” phase, it’s reasonable to assume theme/plugin customers will require decreasing amounts of support as time goes on.

The only difference is you’re getting that 2-3x annual price upfront from your customer, instead of spread out over 2-3 years until they cancel (on average). And a dollar today is worth more than a dollar tomorrow. :smiley:

Since the WooThemes controversy, many theme shops have continued or introduced their own lifetime pricing options for clubs anyway, presumably due to this line of thinking. Elegant Themes, Array Themes, ThemeLab, just to name a few.

StudioPress is one of the few to backtrack on this after offering a lifetime package for many years, recently introducing an annual renewal fee (after an initial, larger one-time charge) for continued access to the Pro Plus package. This was after ample warning, and grandfathering in all existing lifetime customers.


Anyway, I’ve been noticing more and more people express what I’ll dub “subscription resentment.” This was expressed in @sccr410’s recent thread about convincing users to pay for subscriptions.

Instead of forcing a subscription on them, why not give them what they want? An option to pay a one-time fee to “invest” in access to existing and future products without the lingering pressure to “get their money’s worth” …even over annual subscription periods?

Combined with strategies like scarcity (i.e. “only 3 lifetime packages available at this price point!”), it can be a powerful way to increase revenue from customers who may not have otherwise been willing to pay anything due to aforementioned “subscription resentment.”

As a customer, which would you prefer when paying for a theme club (all existing and future products included)?

  • I’d rather pay between 2-3x the annual price once.
  • I’d rather pay an annual recurring price. I’m skeptical of “lifetime” pricing and would like the opportunity to cancel before making too much of a financial commitment.
  • I just wouldn’t ever pay money for themes. I make my own or use free ones.

0 voters


#2

I would’ve selected the third option but If I were to pay for a theme I would select an annual recurring price. Take for example Themeforest (maybe not the best example), in some cases developers stop supporting/updating a theme after 1 year. If they had some sort of lifetime package (for around 200$) I would be screwed after a year, in the above example :slight_smile:


(Leland Fiegel) #3

Hi @acosmin, thanks for the response. To clarify, I’m talking about pricing for a theme club. So presumably, you wouldn’t just get one theme, but a bundle of themes (including new ones as they’re developed) from the same author. But yeah, I understand the skepticism. There would have to be some level of trust and demonstrated consistency for people to buy it.


(Andy McIlwain) #4

Engh. It depends.

From a customer POV, I like the recurring subscription fee because I can roll it up with similar fees (e.g. hosting, Adobe CC, other tools) and write it all off as operational expenses. The recurring subscription also gives me a “voice” with the vendor. So if I’m not liking what they’re producing, I can cancel the subscription and go somewhere else. And I can ebb and flow my subscriptions in line with client/project requirements.

If I were setting up a theme club, I’d probably opt for tiered annual subscriptions: 1, 2, and 3 years, with some level of discount for longer subscriptions.


(Dale Reardon) #5

Hi.
I have grave concerns in relation to investing in a lifetime option for a brand new startup when you don’t know enough about their funding and long term commitment. They could well go bust and you lose your investment rather than just a few monthly payments.
Also as a matter of incentive and fairness to the developers / product owners, they have a far greater incentive to kep building the product or service and providing quality support and new features if they are receiving ongoing revenue If they only had lifetime customers then they may lose motivation to keep developing it.
I am launching my disability news and community soon:
https://mydisabilitymatters.com.au

and we will be offering 6 months bonus membership to the founders but no lifetime deals. That way we give out some incentive to signup but we need the ongoing revenue to keep the site growing and to pay staff to build the business.
Dale.


#6

I totally agree with @dalereardon. You could get 1000 sales the first month, then hardly anything after that. It’d be hard to sustain a business like that. On the other hand I wouldn’t want to see a yearly recurring cost ending up being the cost of a one off purchase.

Then take a plugin like WP Migrate DB Pro. That’s one of favorite plugins ever, period. The problem with it though, is their pricing plans suck. The only way to get all the features is to pay for the highest priced plan. You can’t just get a single license or even a smaller plan with all the features. It’s like their saying you either get the most expensive or eff off. The only reason they can do that is because no one has made a plugin to compete with it…yet.

I’ve always thought the commercial plugin market has been kinda wacked. The pricing is all over the place.

I like the idea of a one off purchase for the plugin then a recurring price for support. Have a midrange price not too cheap or too expensive for the plugin that will have free upgrades for the life of the plugin, but charge extra for support. Maybe add extra addons for the plugin with the recurring price to add some incentive. I’ve never liked the idea of stopping updates. Especially for security reasons. It kinda feels like blackmail. Pay us again or risk having your site broken or hacked.


(Jesse) #7

Seems this is limited to themes, but there are lots of plugins that do the same thing. For example the cache plugin that we promote, Comet Cache, offers lifetime pricing. Other plugins i.e. All In One Migration also do the lifetime pricing option, but you must pay per-feature that you want.

I think this is a common sentiment. Lifetime pricing makes me doubt whenever they are running a serious business or are just desperate for some customers, as it’s often not sustainable.

The recurring model forces both sides to maintain a better relationship, plus it encourages more updates to the software, while letting the author’s business grow bigger IMO. So-called “subscription resentment” seems kinda like a goofy concept as everything else in life is subscription based, such as magazines, paying rent, hiring contractors, Dollar Shave Club… etc. Plus, having a recurring model makes the product/service more affordable to the end user especially in the beginning.

As far as themes I think most true “pros” build their own and don’t need theme clubs, so its possible that various pricing schemes work better at attracting “non-pro” theme users.

Personally I think this doesn’t work, as inevitably many users will opt-out of paying for support, but will still contact the author for help when they need it (or WANT it).

Ultimately, I do think pricing structure is one of the biggest issues in the WordPress community.


(Miroslav Glavić) #8

To tell you the truth, I don’t ever get lifetime licenses or whatever. Whenever I buy a theme or plugin, I buy it for the updates and not the support. I think I know a wee bit of WordPressing, since 1.5


(De'Yonte W.) #9

I agree with @wpgaijin sentiment about paying for a recurring yearly fee. I was about to select the lifetime fee but I don’t think it’s a very sustainable model. I haven’t subscribed to any theme shops before but if I were too, I would lean more to one that offers a yearly subscription model to one with a lifetime model.


#10

The way I see it. There’s two types of support. The theme/plugin is broken and can affect all users, and custom support.

If the plugin is being used as intended without any custom modifications and something isn’t working. Then yes, it is the developer’s responsibility to fix it, but if someone is requesting support for something custom and didn’t get the pay for support. Then why should the dev offer the support? If the user wants it then they should pay for it.


(Leland Fiegel) #11

This is really interesting feedback, thanks everyone for sharing so far.

It’s interesting that while those who commented in the thread are overwhelmingly in favor of recurring fees, the poll is currently split down the middle with the “lifetime” choice.

I’m wondering if anyone who voted for the “lifetime” choice could elaborate on their thoughts in the thread as well.


(Miroslav Glavić) #12

If you get a lifetime whatever, what if the company shuts down?

What if the company gets bought by another company, will that another company honour company’s lifetime comitment?

What if company’s owner retires and someone else takes over but company continues with someone?

I had in the past done the lifetime thing, and had the company shut down or get bought out and new company did not honour my lifetime license.


(Leland Fiegel) #13

What if you make any investment into a company (time or money) and they shut down, or they make adverse material changes to your account (after an acquisition or not)?

This sort of thing happens all the time.

For example, GitHub’s recent pricing changes made some serious waves. Several people in the WordPress community may see their GitHub bills seriously increase, assuming they “enforce” the pricing changes after intense backlash.

Then there are countless stories of startups being acquired by large corporations, only to be shut down. While there may not have been a “lifetime pricing” investment to be honored, people still lost time they invested.

It sounds like the problem isn’t really with the lifetime pricing, but rather a lack of trust that the agreement will be honored for a reasonable length of time.

Assuming attrition rate is three years, and you price your lifetime option at 3x the annual price, how is selling a lifetime plan any less “sustainable” than somebody subscribing and cancelling after three years? If anything, the lifetime option is worth more considering the time value of money.

New customers still need to be acquired to be sustainable, regardless.

Let’s take the JavaScript for WordPress Master Course by Zac Gordon. I believe he only sells lifetime plans, and frequently sells out, using scarcity to build up demand. But he has a documented reputation as a reliable WordPress instructor from his time at Treehouse.

I bought into the course early on, and haven’t had much time to go through it yet. If it was a recurring payment, I might be thinking of cancelling because of “incremental regret” (something I learned about at @krogsgard’s WC Boston presentation). It’s the idea that every time you see a recurring bill on your credit card statement for something you didn’t use, you regret the purchase incrementally more.

If whoever was behind the company also had a similar reputation for reliability and you planned on sticking with the service for the long haul, would you rather invest in a lifetime option, or go recurring (which would end up being more expensive than the lifetime option after three years)?


(Zackary Allnutt) #14

Personally I love using subscription services. I like not investing too much money before I’m sure I’, satisfied. If I am satisfied then I am happy to keep supporting the creator with a recurring revenue.


(Zackary Allnutt) #15

Re-read this thread now I’m trying to choose a pricing option. Seems to be basically people have different preferences to maybe just have option to go for either would make sense.


(David McCan) #16

My personal opinion as an end user without going into an analysis of business models:

Having updates is essential so before I build something I want to make sure it is sustainable. I don’t know what my finances will look like in several years, so tend towards lifetime or DYI. I’m fine if updates are decoupled from support, especially if there is an active user forum or good documentation. If I’m putting up a website for a local nonprofit or my gamer guild then I don’t want to have ongoing costs. If it is a small entrepreneurial side project then I likewise want to keep costs low.

I understand the position of theme authors who want to make sure that development and support are sustainable also. I respect their pricing and marketing decision. For me, an annual subscription is a harder sell. If it is a business context where the reality of ongoing costs is understood and the theme or plugin is the best option to meet the needs, then it makes a lot of sense.


(Zackary Allnutt) #17

I completely understand and appreciate you points. Problem is that it requires new users to pay for maintainence. Considering that must new users come at launch, there comes a time where the money for continued maintaince simply runs out.

What ends up happening is the author loses money or the product stops getting updates.

I prefere one off purchases as well, its just I dont think its releastic, at least not for themes. With the exception of big sellers.

I tried decoupling support and updates. Unfortunitely I didnt work. Wordpress is not always simple and users are not always good a troubleshooting. I ended up with angry customers that thought my theme was broken because they installed some plugin that hasn’t been updated in years.


(David McCan) #18

Hi Zackary,

“Most new users come at launch…” Is that the norm? I would think that generally businesses build over time. I see theme clubs that are always getting new users (Elegant, Themify, Themefuse for examples). To make it work, I imagine there needs to be some economy of focus or scale. For example, Elegant focuses mainly on one theme and Themify has a framework that gives a lot of functionality that they can use to offer new themes without reinventing the wheel.

I definitely get what you say about support. There are users of all levels and good support is a big selling point. I guess I was thinking how iThemes gives you a year of support with BackupBuddy Gold, but after that you need to pay if you need support.

You say you don’t think lifetime is realistic for themes. Is it because there are fewer customization requests for plugins?


(Zackary Allnutt) #19

My experience is completely from Themeforest and what you experience on there is limited exposure time where you end up onboarding clients at the beginning then 2-3 years down the line the sales are all but dried up. You have to release a new theme to get new sales. What you end up with is a big customer base still needing support and updates but no more money coming in.

Private themeshops may be different but from what I’ve read from themeshop blogs, they experience the same thing and is why many of them do yearly subscriptions. Wether is it as extreme as Themeforest I dont know yet as I am in the process of moving away from themeforest.

There are exceptions of cause but I think its the exception rather then the rule. The big themeshops tent to have a big repeat seller but can experience the same thing on their other themes.

I think with plugins its different, I think its a product that you can keep promoting and find new customers but for themes, due to changing trends and blogs promoting them are constantly promotimg new themes.

With plugins, this is purely my perception, so I could well be in for a shock if I sold one but from what I’ve read I get the impression there is less support. With a theme it’s the base of the entire site rather than addon functionality. I do get a lot of customization requests but they arent really a problem, I’m strict on them. But it’s from those who are new to WordPress and setting up sites and are to be honest a little over there heads. But that may be my fault - page builder themes. I would get a lot of questions about how to achieve custom layout and do more complex things.

I am going to be releasing simpler themes suitible for any skill level.

With less support and less maintainence, lifetime options may be totally viable. Time will tell.


(Daniel Iser) #20

As a full time plugin author, I can tell you we play the same game as theme authors. Pricing models vary widely and all have benefits, but the same applies. Support doesn’t just magically stop one day just because you added features.

Take my plugin Popup Maker, the more popular it gets, the more support there is to provide, since its free with paid upgrades more users === more support, but more users != more money most of the time. So just because it can sit there collecting users doesn’t mean the ongoing time costs to maintain and support it go down. In fact mine have skyrocketed, I now have a full time support member and still end up answering a few dozen tickets a week myself.

If we offered lifetime I would be stuck supporting all those users over time with no income to pay my support staff. Since both of our time gets taken up consistently by PM support it hampers new development on this project or creating others.

So what that means in short is eventually we get to a point where Income < Support Expense, this happens extremely quickly for us in the Lifetime model, but with the recurring model and automated renewals we can eventually outgrow the support costs, leading to hiring more devs & support and being able to either expand our offering vertically or create other product lines to expand horizontally.

Lifetime is simply unsustainable. And since PM is now in year 3 we would be close to out of business already as first years licenses are still active but no longer funded (as typically lifetime pricing is x3 1 year price). That would not be good news to the 90k websites currently relying on it.