AppSumo Case Study: Pros, Cons, Tacos, and $200.000 in sales

It's now been over a year since we launched our AppSumo Select deal, so I thought I'd finally put down on paper, or digital bits, what our experience was like.

At first, I was contacted by someone from Appsumo to list my icon manager, Norde, on their marketplace. I replied that I wasn't very interested in listing on their marketplace, but I was interested in Appsumo Select for my other product, Baseline. Immediately, they got very excited in Baseline and had their Select team reach out to me to discuss things further. Things got rolling pretty quickly, and we scheduled a campaign for a couple of months later.

I'll start by giving you the quick results of the campaign and our Pros and Cons list, but at the end of the article, you will find tips on optimizing your campaign for success and maximum profits.

Results

• Total Sales: over $200,000
• Our Profit: $60,569.35
• Total Copies sold: 1470 (Refunds not included)
• Refunds: 587
• Support requests first month: 223 (stopped tracking after that)
• Reviews: 73
• Questions: 144
• Tacos: 5/5

Pros and Cons

Our TL;DR is summarized nicely in this Pros and Cons list. To me, there are many more pros than cons. It's all about perspective and how you look at things.

Pros

1. Their audience matches Baseline's target audience very well; there are a lot of marketers, agencies, and small businesses that have many brands.
2. AppSumo puts a lot of work into promoting your product, at no upfront cost to you.
3. AppSumo has testers that come and put your product to the test and give you actionable feedback.
4. AppSumo customers are generally not the same as other users. They wouldn't be buying your product if it wasn't on Appsumo. They thrive on AppSumo deals and try to make bargains. So you are getting customers you likely wouldn't get otherwise.
5. AppSumo customers are amazingly enthusiastic. They are eager to give feedback and help the product grow, which is incredibly invaluable.
6. AppSumo customers do expect some bugs and are very forgiving.
7. Many AppSumo customers are excited about growing with the product and, in a way, feel like they are a part of the team.
8. Their customers are super open to writing reviews
9. Their customers spread the word about the product
10. The conversion rate was excellent
11. Being on AppSumo Select is like a stamp of approval

Cons

1. They take a large percentage
2. The customers are lifetime.
3. The customers are unlikely to ever switch to a monthly subscription.
4. There will be a lot of support requests.
5. You don't have any control over how much or where AppSumo promotes your product. However, you can try to influence it.
6. There is quite a lot of work involved with getting the product listed, even though they take care of many things. You still have to write a lot of copy and finish many tasks they require.
7. There will be people reselling accounts, and AppSumo doesn't provide any tools to combat that.
8. Adding new features that are somehow limited tends to upset some Sumolings.

The customers from AppSumo are great

The customers we got from AppSumo are absolutely fantastic. I had heard they were very demanding and rude. But they turned out to be so lovely, encouraging, and excited for Baseline. That really surprised me because I was prepared for the worst. Sure, they are demanding, but in a way that is good for the product. They see the potential and tell you what they feel is missing for their workflow. You then take what you want from that. They are also very keen on giving feedback and very understanding when there are bugs. They know they are getting a good deal for a product that might be in very early stages, so they are in it for the ride and often almost feel like a part of the team.

I remember reading a comment from someone on IndieHackers, I think, that was talking about how one of their AppSumo purchasers was asking for a lot of support when using the product, and they wanted to say to them something like "$15! That's how much you are worth to me" because they felt the support wasn't worth their time due to the low amount they got per customer. This is completely the wrong way to approach things, especially regarding something like this.

If you value having people using your product at all, then you are already profiting. After all, if you don't have anyone using your product, then you don't have a business.

You then should take the total income of all AppSumo customers and divide it by the hours spent on customer support and resource usage. Most likely, that will be a lot more per customer than $15. Of course, over time, this will continue to lower, but so will the support requests and usage from AppSumo customers. Just because they have lifetime access doesn't mean they will use it every day for the rest of their life.

On top of that, more users means more reach, awareness, word-of-mouth, and so on. Plus, the increase in support requests will help you fine-tune the product to fit your desired audience.

The revenue split

It's true; they do take a big chunk of the sales. But what you are getting instead is a sales machine unlike any other I've worked with before. They have what they do fine-tuned for maximum effect.

If you are bootstrapping your business, this is definitely a good deal. Having a super effective marketing team essentially working for you without paying them upfront, or at all if you don't make any sales, is not something you will easily find anywhere else. In general, nobody will work for you unless they are guaranteed payment.

We didn't do any promotion

We let AppSumo take care of all the marketing. We already had 3000 in our newsletter then. Still, I didn't send a single email about the AppSumo deal to them because I wanted to see the true power of what they could bring. I was not disappointed. They are great at what they do, and they know how to encourage purchase and communicate the product in a fun way. They put a lot of effort into making it a success.

Resellers

There will always be some who are only buying to resell. AppSumo does not provide any tools to combat this, but it is against their terms of service.

Lifetime Customers

In an interview, Ruben Gamez had an interesting way to look at the lifetime deal. He said it's like having free users. If you're OK with having free users, you should be OK with LTD users. This is a great way to look at it and fits us very well. We already have a free tier, and having some of them pay a decent amount upfront and then continue as a free user would anyway, except with access to more features, wasn't such a bad deal. Especially since it was very early days for us, so having that cash influx and validation was a lot more valuable.

Upselling

Another thing to note is that these customers are very unlikely to switch to a monthly plan later on, in my experience. So don't get your hopes up thinking you can later upsell them additional services. Although I have yet to add many features they don't get access to, the vibe I've gotten so far is that they will never be upgrading anything. I even offered some customers, who had refunded their AppSumo purchase but later changed their mind and wanted to re-purchase after the deal, a significant discount on the subscription plans, but none of them took me up on the offer. I stopped offering that a long time ago since it simply wasted my time by trying to be nice, and I've learned that if they want it bad enough, they will pay full price.

There will be a lot of customer requests

And by a lot, I mean a lot, which is good if you ask me. They are putting your product to the test and finding every single bug there is. So get ready.

Word of mouth

In just a few days after launching, there were already several video reviews, posts in Facebook groups, and articles about Baseline from the users.

A couple of weeks after that, it was even being promoted in webinars, courses, influencers, and by other company's customer support.

Reviews

Baseline got 73 reviews in total on their platform alone. They also wrote in other places like G2. See our wall of love

The conversion rate is great

We started our first day with around 2% conversion rate. It then quickly grew to and stayed around 4%, which is definitely a lot higher than you would typically see for SaaS. It even rose to over 7% on some days, like right before a price hike at the end of the first month.

AppSumo Select is a stamp of approval

For an early-stage product like Baseline was, being featured on AppSumo Select is like a stamp of approval.

Before, I had tried to get a little cash-influx by doing my own LTD and promoting it to Facebook groups I knew were really into LTDs. However, I didn't even get replies back from the admins on whether I could post about it or not.

However, after being on AppSumo Select, they were all for it and posting it themselves without me asking, and in fact, reaching out to me to do special promotions. Oh, how the tables turned.

So AppSumo definitely has a massive influence on what people choose to spend their time to even briefly glance at.

Adding new features can be problematic

Some Sumolings monitor your new features very closely and can react negatively when they are limited for them in any way. For example, we added a Digital Asset Management system with many new features, like search, history, folders, and more. But there were a couple of users who were upset that they couldn't just upload unlimited data. We always tried to be generous and generally give users more than we stated in our contract with AppSumo. Still, there will always be some who are unhappy. Thankfully, the majority are simply happy to be getting new features.

We made a mistake by offering a bonus app

We made a big mistake by adding our icon manager app to the deal. I'm pretty sure this did nothing to change someone's mind about buying the deal, but instead, it only created many problems for us. Instead of having support requests for one app, we had to support two.

Pro Tips

There were a few things I learned along the way that might help anyone about to enter this same journey.

Don't sign up for the Extended Campaign

In the beginning, if you are anything like us, you might not have such a strong negotiation stance since it was very early days for our product. As a result, they offer you only a 20% revenue share for the Standard Campaign.

They also offer you 25% if you sign on for an Extended Campaign. I wouldn't recommend taking that deal. We didn't, and when the Standard Campaign was almost up, they offered to extend it since it was a very successful campaign. That gave us an opportunity to renegotiate our contract. We settled for 40% for the next 30 days, along with being featured in a last call that happened a month after our campaign ended.

Seek feedback at every opportunity, iterate quickly, and update

After every support request:
Ask your customer to give you a review on AppSumo and/or any other place you might want reviews on.
Do your best to address the comments they give you and update the product.
Once you have made significant improvements, notify AppSumo and ask them to mention the updates in a newsletter and other places.

Listen to all the tips the AppSumo staff gives you

AppSumo will give many recommendations on how to approach customers, seek feedback, do marketing, etc. Listen to it. Everything I did that they had told me to do was absolutely worth doing. They know what they are doing, and you should use every opportunity to learn from them.

Do the support yourself

You might think you need to hire someone to manage the support, but I disagree. Almost every support request was not something a newly hired person with no knowledge of the features and limitations of the app would be able to answer. As a result, everything would end up on your desk anyway.

A lot of the support requests were for bugs that I needed to fix ASAP, and others were to ask questions about how to accomplish things that might not be so obvious. This is a great way to see where the bottlenecks are.

It's also an excellent opportunity to form connections with your customer base and truly understand their motivations and needs. The most prominent promoters of Baseline's word of mouth are all people I personally assisted when they reached out for support.

Get a good support app

I would recommend that you get a good support app before launching; don't expect people to email you. Make it as easy as possible for both of you. Make it so that you can take your phone with you and still be effective in helping them. I used Crisp.chat and would recommend it, but any modern app will do.

Summary

Overall, we are very happy with the deal. Even though AppSumo takes a large percentage, it is an excellent cash boost from a very enthusiastic userbase that is forgiving and happy to be a part of the journey.