To AppSumo or not to AppSumo? That is the question.
It’s almost certainly what Shakespeare would ponder if he was a 21st-century software entrepreneur instead of a (pretty good) Tudor playwright.
It’s probably a question you’ve asked yourself, too.
As a long-time follower of AppSumo – nothing crazy, but I’ve bought a few deals in the past – it was certainly on my list of possible marketing strategies when we first launched.
Eventually, I decided it was the right thing for us to do, and now the process is complete I wanted to share our experience and the results with you.
Hopefully, you’ll find it interesting – and it’ll help you decide whether running an AppSumo promotion is right for you!
Article Contents
Executive Summary
We had an awesome experience with AppSumo. They are a thoroughly nice team and 100% delivered on their promise of a flood of traffic and educated new users. They have a very slick process that has clearly been been tried, tested and refined over time. Their ability to provide their community with what they want is also impressive. When the deal closed out we had received a ton of traffic, a lot of new account sign ups, a lot of purchases and we’ve been speaking with new customers non-stop. This provided us with a huge amount of exceptionally useful product feedback. So overall this was a huge win for us! Some of the key stats are as follows:
AppSumwho?
Ok, for the uninitiated, AppSumo is essentially a deal site offering deep-discounted, ‘lifetime’ deals on software products for early adopters.
They have a huge database of around 800,000 users who are passionate about getting early access to software, and score some amazing deals in the process.
This makes the AppSumo decision a balancing act; yes, it can lead to new users, revenue and crucial feedback, but it also means heavily discounting your product.
For these reasons, it isn’t always a ‘no-brainer.’ There are pros and cons to weigh up, which I’ll talk about shortly.
Background
So, for context, we were coming at this from a standing start. We had only just launched Project.co, and we were really looking to just get out there – to build some visibility and traction.
To help us do this, we launched on Betali.st and a few other beta sites a couple of months before we spoke with AppSumo.
The idea of these sites is roughly the same – their audiences are made up of people looking to discover emerging startups and software tools before they become mainstream. It’s all about that competitive advantage of finding an awesome tool before your competitors.
We paid $129 – for the listing on Betali.st. And that was where AppSumo found us.
I’d already taken a sneaky look to see if AppSumo might be right for us in the future, but they actually approached me before I had the chance to take this further. (Incidentally, I almost certainly would have reached out to them eventually if they hadn’t made contact first.)
Why run an AppSumo promotion?
One of the things I was most concerned about was potentially devaluing our product. I didn’t want future potential customers to look back and wrongly surmise that this significantly slashed price was a true reflection of our actual value.
Ultimately, though, I concluded that this exercise wasn’t entirely financial, and paled into insignificance behind the reasons to go ahead….
Exposure – AppSumo’s list is seriously huge. The ability for a startup to reach 800,000 people isn’t to be sniffed at, and – more than that – it’s a targeted audience of early adopters who are actively engaged in trialling and using the latest software products.
Feedback – By getting our product in front of people who were likely to try out and use it, I knew we’d also get a bunch of interesting and useful feedback. I thought of it as a sort of public beta; a logical next step in testing Project.co and building our audience, while still generating some revenue rather than giving the product away for free. The feedback would be ongoing, too – we’d be able to get data around how many people were using it every day.
Network Effects – Because of the nature of Project.co – a collaboration tool – I knew that the likelihood was that people would invite colleagues and clients to the tool, and that this would further building exposure and visibility in the market. I knew there was a high chance that the people AppSumo users invite to Project.co might also create their own accounts in the future as well.
Negotiation
The promotion we ended up with was that users would pay $49 for a lifetime (small plan) account, providing access for up to 10 users and 25gb storage space.
AppSumo also offers the ability for customers to ‘stack’ deals, increasing things like user limits.
Essentially, this meant we were giving away a lifetime deal for the price of just one month.
In other words, we’d have to support people forever for one relatively low up-front payment.
We also agreed on a 30/70 revenue split in AppSumo’s favour. This doesn’t sound like the most favourable deal, but, ultimately, it comes back to the fact that this was never a purely financial thing for us.
The opportunity to get in front of 800,000 targeted potential users is priceless, and – given that AppSumo handle all of the promotion – I wasn’t particularly unhappy with the split.
It’s important to mention that there was minimal negotiation around this. The team at AppSumo will tell you their terms – and ask you to confirm you’re happy to work on that basis. Of course, we were!
Testing & Evaluation
Not to sound conceited – but AppSumo don’t just promote anybody. They understandably have an evaluation and testing period where they check a product out and make sure it works before they stake their reputation on promoting it.
They also invite 3-4 of their testers that they know and respect to check it out. This is all perfectly understandable as a way for AppSumo to safeguard the value of their business, which comes mainly from their audience.
Our Strategy
From the outset, my view was that we should minimise our own promotion of the AppSumo deal. Ultimately this was the whole point of working with AppSumo – we would provide the software, they would provide the audience.
This also meant we could focus more of our time on what was really important (and pretty challenging): support. There’s no other way to put it: it was hard work. I pretty much single-handedly dealt with support issues for the whole period, and this meant working non-stop for two weeks, responding to a barrage (in the nicest possible way) of support requests.
Of course – this was to be expected and, actually, as I’ve mentioned earlier, honestly a good thing.
We wanted to dive in at the deep end and fully test the product. Every support ticket, every customer conversation, was a chance to improve our understanding of what people wanted from the system – so that we could improve and make it better.
In comparison, if we launched without the AppSumo promotion and saw a slow trickle of traffic and sign-ups, we would ultimately be in a much worse place.
As a new product to market it’s essential to get committed people using the software as quickly as possible. It’s only with a significant amount of users that you can make quality decisions about what features the general consensus of people want.
If we had 1-2 users asking for something instead of 100-200 users then we could be building the wrong things and wasting a lot of our time.
Pre-launch
To kick things off, we created a test account for AppSumo, which they shared with their testers for evaluation.
The testers came back with a bunch of questions and some positive feedback – and we also got a nice review article published on the AppSumo blog to raise some initial awareness.
Next up was the fairly mundane – but highly important – logistical task of creating 10,000 unique deal codes. This was on AppSumo’s advice, and, while we ended up selling far less than the 10,000 codes, it at least gave us some breathing space.
How do you set up 10,000 deal codes? Good question, and one I asked myself in a cold sweat when this challenge presented itself, but it turns out it was actually fairly easy to do. We used Chargebee, a subscription management software. We found this article on the Chargebee blog which explained how to do it.
To further complicate things, we had to build in the ability to ‘stack’ codes as I mentioned earlier – so users could upgrade their account to incorporate more users. Our workaround here was for them to use one code to get onto the ‘Small’ plan and then, for any other codes they bought, they’d simply email over to our support email and we would stack them onto the account manually.
Another pre-launch step was to fill out 5 fairly long documents with our info, the deal info and various other bits for AppSumo to use as sales collateral.
We took the time to get our website set up, refreshing our brand and message in time for launch so that we’d make the best possible first impression when people found us.
Just before the launch, we were super excited to see AppSumo launch their own video review of our tool. This was just so exciting to see – as it gave us a window into what another (sort of) neutral person thought was really great about our software.
Launch
After all the setup work, it was time to launch.
First up, an email was sent out to AppSumo ‘Plus’ members – people who have paid for early access to deals. They tend to be AppSumo’s most engaged users, as you’d expect from a network of people who pay for the privilege!
Strangely, though, we also noticed that the deal went live on the AppSumo homepage, so – if you’d happened to visit the website on the day our deal went live – you’d have got the same early access as Plus members.
There’s another safeguard in place at this stage for AppSumo which is – if your product gets panned with bad feedback, or the deal doesn’t take off, they reserve the right to pull it at this point. This means you might never actually get promoted to the whole list. Again, though, while this sounds like a threat, it’s a real motivation to give great support and take pride in the product. It’s all about AppSumo’s barrier-to-entry which helps ensure their audience get real value.
Immediately, a steady stream of traffic started to appear on our site…
And we also got a wave of feedback! We went from zero to 70+ conversations a day, and became incredibly busy. When it comes to dealing with these conversations, I have three lessons to share…
Canned responses – I’m not suggesting you should plan and create these in advance, but pay attention to the questions you’re answering frequently. Pull out the best parts of your answers, and put them into a text document for future use. We ended up with around 30 different canned responses to common questions. But not just that – we let this guide our content creation. Where people were struggling, we thought we could create support articles or content to help our users out.
Documentation – Real value to your audience comes not from writing short replies, but actually sending people to a step-by-step guide, or a full manual, that shows them how to do everything they need to do.
Listen carefully – Again, this was primarily a listening exercise for us. Answering questions can be done in two ways: you can either answer the question without much thought, or you can dig a little deeper into where the question comes from. What are they wanting from the product? Where do they want to get to, and how can you adapt your systems, processes and features to help them get there quicker? This can really help you rapidly develop your product.
Emailed to 800,000 people!!
If the initial launch was a ‘soft’ one to AppSumo Plus members, then the ‘hard’ launch was about as ‘hard’ as can be, as Project.co was exposed to 800,000 new people.
Support requests – which had settled down since the soft launch – went from being manageable to extremely busy again! This was our 2nd wave!
And there was a painful moment when we saw a video review from a lifetime deal vlogger, who highlighted a simple but real error within the tool, something that we’d missed. This error (around task start and end dates) was an incredibly simple, quick fix – but it caused problems in the rest of the system for the video review, which made it look like the system was buggy and glitchy – which wasn’t the case. This really hurt, but was a lesson learned.
I continued offering pretty much non-stop customer support, making sure people had access to the system, and – of course – using all that feedback to learn, and grow, improving the system based on the feedback people were continually giving. A busy, breathless but incredibly satisfying and worthwhile process!
Final reminder email & webinar
Before the end of the promotion, a final reminder email went out to the full AppSumo list, reminding people to buy quickly because the offer would be closing in 2 days. To coincide with this email, we put together a communique explaining all our new features, and outlining how we’d been listening to feedback so far, about an hour before the AppSumo email went out. This was a great way to illustrate that we’d been listening and build confidence among people who were interested but hadn’t bought yet.
It makes total sense, of course, but this is where most of our sales happened. In fact, 35% of our sales happened in the last three days. The sense of urgency and scarcity clearly helped convince a few ‘maybe’ customers to take the plunge and buy.
The day after the emails went out, we conducted a webinar – this was a 20-minute demo of the system, and a Q&A, and I have to say it went really well. We got loads of questions from a highly engaged audience.
The webinar was moderated and hosted by AppSumo and went out on their channels. They also promoted this on social with some ads – at their expense – to get people to opt-in, which I thought was good, as it shows they don’t just rely on their existing list.
The Results
Ok, so let’s talk numbers…
Launch to AppSumo Plus and added to AppSumo homepage: 17th July 2019
Launch to full list: 24th July 2019
Final email sent: 8th August
Webinar: 9th August
Deal close: 10th August
- 3,713 accounts created
- 2,282 free accounts
- 1,431 paid accounts
- 485 accounts with more than 1 code
- 1,916 total codes sold
- 764 codes refunded
- $93,884 total revenue generated
- 30% = Our AppSumo split
- $28,165.20 our revenue
- 130 on site questions
- 1,700+ support conversations
- 53 on site reviews (4.65 / 5 avg review)
- 47 full 5 taco reviews!!
- 30 Capterra reviews (4.8 / 5 avg review)
What happened next?
After the deal finished, the support, of course, continued, although it was less intense!
For weeks after the promotion closed, we had people asking if they could buy at the AppSumo price. We decided to give a 2 week grace period and sold for $49 – which meant we kept 100% of the money. This amounted to £1,345.82 (when converted to our local currency GBP).
Every code bought had an expiration date – which was supposed to be 1st October 2019 as suggested by AppSumo. However, even now (first week of November 2019) we have people asking if they can redeem codes.
Payment was staggered. The deal finished on 8th August, and we were paid based on when deals were bought, on 90 day terms. To put it simply, we were paid in October for deals bought in July, in November for deals bought in August.
Summary – Was it worth it?
So, was it all worthwhile? It’s a definitive ‘yes!’
Working with AppSumo helped us generate traction that would have been nearly impossible to generate any other way.
It also drove excellent product feedback which helped us develop the product quickly. The alternative here would have been to do our own promotion, with a trickle of customers.
This would have meant making development decisions based on one, or a couple, of users asking for a feature. We’d have been investing huge amounts of time and resource into developing features that may have only been useful to a handful of users.
Having a wider sample group meant that we were able to notice when 50-100 people were asking for the same thing – which gave us a much more accurate steer on what people wanted from Project.co. I believe has been a real bonus for the product.
The promotion also created some initial revenue – sure, it’s not full-price, and it’s a one-off, lifetime deal payment, but this was still a good way to generate some initial revenue.
We also found the AppSumo experience helped us build our first ‘superfan’ audience. Again, not to be immodest, but some people don’t just like the product – they truly love it. This has helped us generate reviews and testimonials, with 50+ written testimonials and 2 testimonial videos in production.
Of course, it’s not all sunshine and rainbows – we have to support the users we acquired for life, which takes a lot of commitment. There’s no dancing around the fact that it’s very time-consuming compared to the revenue generated. If you’re just in it for the money, this isn’t going to work for you. But – if you’re looking to generate new users, and get a looooot of useful feedback, I think there’s a good chance it’ll be
Would we do it again? Not at this point. Not because it wasn’t worth doing – but because this was a way to generate initial traction, get people using the system and get feedback. We value our product and feel we have a more than fair price and offering currently.
But the exercise more than served its purpose, and we’d recommend the AppSumo experience to others looking to do it for the right reasons.