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Should you offer online lifetime access to your product?

Two common ways you can sell your product online are by subscription service or lifetime access. A subscription service is a payment plan. Your customer pays you a monthly, quarterly, or annual fee, and as long as the customer is current in payments he or she may access your product online.

Lifetime access, however, is not often as clear-cut. Many companies offer or have offered lifetime access (or a “lifetime subscription”) to their products – TiVo and Sirius satellite radio are two examples.

Generally, lifetime access means that for a single payment, the customer gets unlimited access to the product, and sometimes, free updates or other benefits as the product or technology evolves.

But what does “lifetime” really mean? How long is a lifetime in the constantly-changing, online world? Let’s take a look at some of the pros and cons of offering lifetime access to your product.

Pros to offering lifetime access:

You determine what a lifetime is.

You are probably wondering what the length of lifetime access really is. It’s generally considered for the lifetime of the product, not you or the customer.

The good news is that you can limit the length of your lifetime access in your terms of service. You might want to choose a length of time that seems generous, but sustainable for your product. One year is probably not sufficient to entice customers into buying lifetime access, but five years may be.

Up front money.

Another benefit to you in offering lifetime access is immediate cash flow.

A deal for your customers.

Customers don’t like to get monthly bills or charges. They may feel like they are getting a deal on lifetime access, versus a subscription service, if you price it right.

Easier books for you.

It’s a lot easier to manage a single payment in your books than it is to track recurring payments.

Potential leverage for other products.

Offering lifetime access to your current product line may increase your revenue stream in the long run if you continue to offer other good products and can entice your customers to pay for lifetime access to those as well.

Cons to offering lifetime access:

Legal obligations.

You must be clear in your terms of service what the length of a lifetime is, what happens if you discontinue your product, and what access is covered. You also want to specify whether you are required to maintain your exact product as it exists at the time of purchase, and what happens if you go out of business or technology makes your product obsolete. You don’t want to open yourself up to liability by not clarifying to your customers exactly what they get when they purchase lifetime access. These are all things that a lawyer can help you determine, and it will probably cost you some money.

Some customers may be turned off by describing something as “lifetime” but then limiting its availability to a certain number of years. You don’t want to appear less than trustworthy or deceptive in your advertising.

Long term cost.

Do you know what the cost of keeping your servers up or managing the product after its use has substantially decreased will be? If you have one remaining customer using the product or it has become technologically obsolete, but you are still required by your terms of service to maintain its access, do you have the revenue to cover those costs? Remember, you are only getting a single up-front payment from the customers, and it must be sufficient to manage your product’s access for as long as you have agreed to.

Limited revenue stream.

Offering lifetime access for a single, up front payment does not guarantee future payments. Your customers may feel that they have little incentive to purchase new versions of products. And because it is a more expensive initial investment than monthly payments, it may scare off some potential customers with the high up front costs.

Look at companies you respect to see what kind of terms they offer around lifetime access to help you decide what the smart business decision is for you.

If you decide to offer lifetime access to your online products, you probably want to find a lawyer to help draft your terms of service, so you are covering all the potential contingencies.

Should you offer online lifetime access to your product?

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