Buying and selling digital goods assumes among many other things license, terms & conditions, and other legal stuff that we don’t read & understand. But what many deal websites and digital agencies use often is Lifetime access.
Indeed, for many, it sounds attractive and may convince the audience to buy the product or service without any second thoughts, as what people understand under this term is only a single-time payment and you own the good as yours with a lot of rights.
Well, the term “lifetime access” is actually more than this, and in this article, we will talk about the definition, how to read it, and as well about pros and cons of this controverted term we often meet.
What Does Lifetime Access Mean?
There are two, most common ways to sell digital goods:
- Using a Subscription Service – which means that users of the specific product or service will be billed periodically based on the selected subscription plan, and in exchange, they will receive updates & new features.
- Lifetime access – the single time payment, with unlimited access to the new acquisition, and further updates, again, without any other payments.
However, you probably wonder what is the length of the lifetime access, and the truth is cruel: It depends from product to product and from service to service. But for sure it’s not your lifetime not as a user or as a seller.
This is usually determined by product sustainability, so one year it may not be enough, but 5-10 years could be a good idea. Sellers usually have the task to decide and write about the length of lifetime access in the T&C – a document that almost none reads it until the end.
According to the latest statistics, less than 3% actually had problems with this term in the past 4 years. And the numbers are apparently low, but if we look at a 10 years timeline, then the percentage grew from 0,2% up to 4%. Yes, one of the main reasons is that compared to 10 years ago, now there are 25 times more digital products, but still, the statistics are worrying enough.
Like any other marketing feature and strategy, Lifetime Access has its benefits for both sides and even some of them bring a significant advantage compared to the subscription-based strategy, we have to admit that it has its negative effects. But let’s start with Pros
- Higher cashflow and worry-free service: For sellers that provide lifetime access to their products and services, this is a good feature and strategy, as most of the users would like to pay only once for what they get. This type of offer will increase the number of buyers compared to subscription-based products as there is no good reason to “rent” digital goods. On the other hand, people that buy lifetime access products or services are happier, as they don’t get the ugly feeling of being “robbed” by monthly payments. This is what we call worry-free services and products – buy once, and use your acquisition as long as you want.
- Easier accountancy: This goes for both sides. As mentioned earlier, users would prefer a single time payment over monthly transactions and it makes money easier to handle. On the other hand, it is true that not all sellers like monthly payments. Especially small businesses that are out of resources, both human and financial. So even if the monthly subscription brings a constant income, lifetime access still beats the records, especially in the small and medium segment.
- Possible support your further sales/purchases: So once you’ve sold a lifetime product, you don’t have to worry too much about updates and maintenance if you are not supposed to, obviously. Instead, as a seller, you can focus easier on your next product. The same thing is available for buyers – If they liked the previous lifetime product, for sure will come back for more, if the price-quality ratio is reasonable.
Now that we have done with pros, we also have to mention what is the cost you have to pay for selling and buying lifetime access products or services. And even though buyers are not touched so much by the negative side, sellers, on the other hand, have to take the risks.
- Legal Obligations: Once the product or service assumes lifetime access, the seller has to highlight what is the length of the lifetime period, and as well it is important to provide clear information on what happens when the lifetime period expires. Experienced clients may take a closer look at these T&C specifications and could be disappointed if the lifetime period doesn’t rise to their expectations. But that’s only the beginning – if the T&C are not fulfilled then the entire set of troubles begins for sellers.
- Long Term Cost: Maintenance may cost a lot if there are only a few users using a product that has been provided lifetime access, but it’s not so trendy as it was its best times. So if there was a product with 5 years’ support, and it’s not used starting with its second year, you will still be obliged as a seller/provider to offer support and & maintenance for the remaining period for a few clients that still use it. Does the revenue cover the costs? This is a question you should’ve asked yourself since the very beginning.
Except what was mentioned above, there are a lot of more risks & benefits for lifetime access, and they vary from market to market and depend a lot on industry, purpose, and of course price. But it is good to keep in mind that you should always be aware when you buy or sell products & services, as you never know what may turn around against you.