Does Your Startup Need an AppSumo Launch?
And the complete guide to getting started
When you launch a startup the first thing you should do is to get feedback from as many users as possible. This is crucial to iterate and improve your product.
When we launched Copywritely, a software that checks for plagiarism and readability, we found no better way than using AppSumo to collect our customers' views. Our campaign lasted 5 months and gave us some key insights:
- a total of 2170 codes were bought;
- total campaign revenue = $ 97.645;
- 7000+ views of the product video from AppSumo;
- 4000+ clicks from the AppSumo website during the campaign;
- the growth of brand queries during the campaign by 4 times (2839 vs 766 clicks on the query “copywritely” from Google organic search for 3 months of the campaign compared to the last 3 months).
These insights provided us with great lessons and other companies should be considering running their own campaigns. We hope our experience can help you to grow.
What you need to know about AppSumo
AppSumo.com was founded in 2010 by Noah Kagan. This is a part of the Sumo Group. The business model is the selling of a lifetime license for SaaS products for a fraction of the transaction amount. AppSumo takes the annual tariff plans of your product, makes a 50–90% discount on them, and sells them as a lifetime license to use the product.
AppSumo has the perfect positioning for both of its audiences.
- For customers who make transactions on the platform: “The tools that you need for the business should not throw you out of the business.”
- For startups who want to launch on the platform: “Let us be your seed round.”
Chris Wilpert, who at one time served as vice president of marketing at AppSumo, wrote the book “Black Rhinos”. He sorted out ten multimillion-dollar companies, leaders in their niches, and described in detail what creative techniques, checklists, and social technologies they use.
These companies include Amazon, Mailchimp, Intercom, Slack, Supreme, Tony Robbins, Shopify, Hubspot, Sumo, and Appsumo.
According to him (for 2017), AppSumo is now the first company in the world in terms of employee income. She surpassed Facebook, Apple, Google Amazon, and Slack, without venture capital and generally no investors.
AppSumo is well aware of its audience and milestones in the user’s path, which turns it into a client and a regular customer.
A couple of slides from a presentation by Olman Quesada, Director of Business Development at AppSumo, at the SaaS Nation 2019 conference in Kyiv.
Olman examined what major mistakes SaaS startups make, and showed on the example of AppSumo and other products on how to avoid them.
The AppSumo team in its work uses Google Sheets and a simple formula for prioritizing tasks (priority = value/cost).
Also, the company representatives regularly hold offline meetings with their partners: rent a pub for several hours, invite those who have already launched on their platform, treat them with drinks and snacks, give T-shirts, and answer all questions in an informal setting.
On November 14, 2019, such a meeting was in Kyiv, a month before in Dublin.
At a meeting in Kyiv, Olman said that they are now focused on SaaS products. Previously, the company sold e-books and online courses, but such products are increasingly perceived by customers as having little value.
Another recent change is the campaign term. Earlier, AppSumo focused on the urgency and limited supply. Campaigns lasted up to 2 weeks. Now they are ready to campaign for months. Our campaign lasted 5 months.
But there is a thing in AppSumo that impressed me even more than effective marketing, a successful business model, and level of audience understanding. This is a streamlined process. It feels like I got to Japanese production, only in the digital field.
Key campaign rules
- You negotiate on the price of the lifetime plans indicated on your price list.
- Any changes that are made to these plans in the process and after the end of the campaign apply to all purchased users.
- It is impossible to reduce functions, limits of a specific plan.
- AppSumo, based on the data you fill in, compiles a video and a sales page about your product.
- AppSumo promotes your offer through its base of subscribers and partners, launches advertising campaigns on Facebook and Instagram.
- AppSumo guarantees all its customers the opportunity to return money for a purchase within 60 days, without explanation. AppSumo takes the risk on all returns.
- You cannot run similar campaigns on similar sites for a year after launching on AppSumo. These sites include StackCommerce, MightyDeals, JVZoo, DealFuel, Greedeals, SifteryDeals, SaaS Mantra, PitchGround, and Lifetime Tech Deals (Facebook groups), but this is not an entire list.
The pros of AppSumo launch
1. You get access to a solvent audience of entrepreneurs from all over the world who are open to new products
These are people who are looking for how to optimize their or team’s work process. They are open to new things and are ready to risk money, even if the product is not yet perfect. AppSumo calls its customers sumo-lings (and the customers themselves often call themselves that).
2. Due to the large volume of sales, you can quickly attract an impressive amount of money for a young startup
A well-established company may not even notice such an amount. But the smaller you are, the more important it is for you to survive in the first stages, and even the amount of $ 20k-200k will be like air for you.
3. A large number of feedback, questions, and suggestions helps to understand what needs to be changed in the product, marketing, team, and processes
You get a huge amount of feedback in a short period. Thus, in addition to making real money, you accelerate product iterations, search for product-market fit, and boost your product management efforts.
Probably during the campaign, you automatically check a couple of risky hypotheses and get ideas for new experiments. This value from the campaign is more difficult to calculate, but it certainly is.
4. The viral effect
It occurs for two reasons. The first is the AppSumo affiliate program. People shoot video reviews and write text reviews on the product, placing their affiliate links in the content. The struggle for traffic among partners leads to the fact that your product begins to appear everywhere: Google, YouTube, Twitter, Facebook.
And this reason strengthens the second — a natural desire to share an interesting product. Besides, you may begin to receive suggestions in the mail — to make a text or video review in exchange for a lifetime license for one of the packages.
5. The significant positive impact on SEO
All this together (an increase in the backlink profile, an increase in traffic from links from other sites and social networks, an increase in brand queries) leads to a significant increase in search engine rankings.
Based on the materials of those who have already run on AppSumo, this is not our only case. So the increase in organic traffic can be set as a completely guaranteed plus and you can use AppSumo launch as a part of your SaaS SEO strategy.
Below is a comparison of the number of impressions and clicks by brand queries 2 months before the launch of the campaign and 2 months from the start of the campaign.
4 times of growth. A huge leap occurred on the first day of launch when AppSumo published a product page and send the first letter to their email list.
6. The team spirit
This item is not guaranteed. It all depends on how skillfully the campaign manager presents the value of the campaign, its interim results, and the final.
It is important to remember that most startups die because there is no need for a product. Team members, when they perform tasks set by the product manager, marketer, often do not feel at all how much what they are doing is important for the end-user. The AppSumo campaign with many reviews and video reviews helps the entire team understand that they create value.
The cons of AppSumo launch
1. Big risks with the unit economy
The key minus. The AppSumo campaign initially contained a conflict of interest between the buyer and you, as the seller.
The buyer expects that the product will be improved, he will use it for a long time and thus will pay for the purchase many times over.
For you, as a seller, if every client action burns resources (server resources, API fees, customer support), then you can quickly fly out into the negative.
How to work with this risk? Gather data on the volume of use of your product, try to find the same data on competitors, and look for data for similar markets.
On the good, the statistics of use by customers who bought you on AppSumo should be similar to the statistics of use by customers who bought you products from other sources.
Just as a small percentage of your paid users use the product for a long time and generate most of the profit, so a small segment of AppSumo users will use the product for so long that it becomes unprofitable for you. But they will be paid for by those who quit using the product much earlier.
An ideal customer on AppSumo is a customer who has bought the maximum rate, uses it at a minimum, but recommends it to all his friends and colleagues.
2. Not suitable for market leaders and products with a well-established growth mechanism
If your product is already known, many users come up with recommendations, the product is often compared with other best products on the market, then the campaign will be unprofitable for you. You can reach the audience with AppSumo and in other ways, only you will earn an order of magnitude more than selling a lifetime license.
3. Early adopters ≠ your entire market
The fact that the AppSumo audience is open to new products and is ready to take risks when shopping is both a plus and a minus. It is difficult to single out the real reason for the purchase in her motivation: do they need this tool or do they expect that they will need it in the future or will they want to later resell access to a valuable tool?
Do not evaluate the potential of your market and product only based on the campaign on AppSumo.
How to start a launch on AppSumo
1. Fill out the form
The simplest, but not the most effective, is to fill out this form. I did this, but only for show or in case of emergency if using network does not help. But the acquaintance helped.
2. The help from a person who has already made a launch
I realized that it’s better to go to the site through people who have previously run on it. This is better for two reasons: they will contact you faster and you will immediately receive some sort of minimum credit of trust.
I turned to Max Pechersky from Promorepublic and Eugene Lata from Serpstat. Both responded and sent an intro message to an AppSumo representative. Max also advised me on how to properly conduct an orientation meeting, how to prepare and conduct a campaign.
So, if you plan to launch a campaign, you can fill out the form, but it’s better to contact those who have already done this and who will speed up the process.
3. An online meeting with the representative of AppSumo
Our meeting with the representative of AppSumo, Olman, took place on May 13. I did not conduct the meeting myself but with our founder Dmitry Bondar.
This is an important nuance. AppSumo loves to talk specifically with the founders, as those who are the best to understand for whom they create the product, the better they are, etc.
If you are a small company, then you will not have problems holding such a meeting, but if you are a manager in a company where dozens of products are still developing among yours and each of them competes for the time of the founder, then everything becomes more complicated. You will need to sell this idea.
The meeting is fast enough, about 30 minutes. You will be asked to tell about the history of the product, the tasks that it solves, where and who your audience is from, and what your product metrics and growth metrics are.
Besides, you will need to confirm that you can scale the resources of servers and support departments.
Immediately in the negotiation process, you will agree on the plans that will participate in the campaign, their prices, and your revenue share.
The only thing is that at the first meeting with us AppSumo did not discuss the revenue share, but set their option without asking us. But here the choice is small, you can simply abandon the campaign.
AppSumo understands when they have a positional advantage. To start negotiations for revenue share, you must either conduct at least one campaign to show the value of the product. Or at the meeting, immediately show that you are already quite a successful product and that AppSumo needs you, and not you need AppSumo.
The acquaintance ended with the fact that they set a launch date for the campaign on July 1, that is, after a month and a half. As it turned out, this was enough for us, but at the first start, it is still better to take the time to prepare for the campaign with a margin.
4. Prices and unit economy
Since you will agree on plans, prices, and revenue share immediately during your acquaintance, it is better to calculate in advance how much the user will cost to use a particular plan at the maximum.
We calculated this after the fact after acquaintance, but in the end, we concluded that the existing unit economy is suitable for us.
5. Filling data templates
After meeting and approving the launch date, you will receive an AppSumo Promotion Agreement, an agreement on the conditions of the campaign, by e-mail.
Sign it electronically and proceed to long work on filling out all forms and attentively reading all the instructions.
Those that need to be completed in a week do not just take such a long time. This is exactly the moment that I mentioned at the beginning of the article — the debugging of processes.
From acquaintance to the payment of income, I have never had any indignation from any mistake or difficult task.
Each item that you read and fill in the instructions and forms matters. Also, after answering all the questions in the forms, you will begin to better understand your product and audience.
And if before you thought about this a little, now it will need to be done very carefully.
6. The generation of codes and principles of work with them
According to the instructions, you need to generate 10k codes. We did this through the built-in functionality of our payment system in just a few minutes.
But it was harder to understand how promotional codes work. I will show on our example what it consists of:
- The first plan, $59, 1 code.
- The second plan, $118, 2 codes.
- The third plan, $177, 3 codes.
The user can’t buy the highest package for one code at once. He needs to apply 3 pieces. This gives great flexibility to the user and the AppSumo team.
If the client in the process of using realized that he needs a lower plan, then he does not need to buy one package and return another. He only needs to return one or two codes for which he will receive a refund.
The same thing if he wants to upgrade his package. There may be many more such plans and codes for them.
All requirements for codes and their work can be found in this presentation of AppSumo, which you will also receive in the email.
7. The creation and testing of the funnel
Creating and setting up codes is not enough, you also need to configure and test the funnel through which users will pass.
Taken from this FAQ.
I must say right away that we did not test them all, and this resulted in a large number of requests to the support service and the indignation of users who did not know how to start using the product. Do not be lazy 🙂
Only after you complete all the tasks from the list, you will receive confirmation that the campaign will take place. Now it’s time to complete some more tasks.
How to prepare for the AppSumo campaign
1. Competitor research for proper positioning
This is what we did not do. We investigated competitors earlier, at the stage of market analysis and product launch, but we didn’t do specifically for the AppSumo campaign. But it was necessary.
Search Google or ask someone from the AppSumo team about similar products that run on their site. Users will be sure to ask you — what are you better. If you do not prepare answers to such questions in advance, you will have to do it in an accelerated mode.
Some users themselves can suggest ideas for positioning strategies, highlighting in reviews what they liked most about the product.
Our product was compared with different competitors, but the most popular among them were Grammarly and Textmetrics.
Answer templates for such questions should be available to both those who answer on the product page on AppSumo and specialists from the support department. And the most perfect level is the creation on your site of comparison pages with competitors.
2. Preparation of instructions for users
Our instructions left much to be desired since the product was changing rapidly and I did not see any reason to capture screenshots and descriptions, which is a month would need to be edited again. But still, they were.
Before AppSumo, we used Zendesk both to process tickets falling in the mail and to create a knowledge base.
AppSumo added our knowledge base to the widget in the lower left on the product page.
As a result, users complained about the scarcity of materials that would help them understand the product. Therefore, when you are preparing to launch, check for at least two instructions (ideally in video format, too):
- Instructions on how to apply code on your site.
- Instructions for beginners on how to use the product (getting started guide).
And again, if you do not do this in advance, then you will prepare them in a hurry when questions and angry reviews from users sprinkle on you.
3. The preparation of instructions for the customer support
Next, you need to prepare instructions for the support department. And even if this role is performed only by you or the two of you as a teammate, you need to think about how to increase your effectiveness.
Before AppSumo, we used Zendesk to handle user requests. But AppSumo said their support team especially likes HelpScout.
I did not like Zendesk’s poor integration of chat + knowledge base + ticket system. In all other respects, they are good and not just because they are leaders.
But when I went in and tried HelpScout, I had a feeling that the guys read my thoughts and pains. We switched to them, and we processed all the tickets already in it.
In general, I do not recommend changing the support system a couple of days before the campaign, as I did myself. It was easy for me to rebuild, but so I let the guys from the support department who were used to one system and needed time to learn.
In addition to the instructions, it is also important to convey in detail to the support department what kind of company it will be, how and how much it will take, and with what requests users will most often write.
Model all possible questions. Your task is to reduce the uncertainty for support to zero. So they will pull you less and you can concentrate on the correct answers on the product page on AppSumo.
4. The preparation of public backlog
Before the launch, we didn’t even have a thought to do this. But during the campaign, users bombarded us with offers and their desires. Olman gave us access to a simple tool for generating backlogs based on user suggestions and votes, and we started to keep it here — https://copywritely.dashvine.com/
If you take such a step in advance and display what tasks you are planning to do, then you will fall an additional plus in the eyes of customers.
5. The private Facebook group
We did not expect customers with AppSumo to be so actively added to our private Facebook group. This communication format is convenient for users in that they can evaluate the speed of answers and see what questions and complaints other participants express.
Also, such clients often ask about the status of promotion for specific items from the backlog. It is not very good to write about this in the email, but in a private group, where other participants can support you much more efficiently.
If you do not have such a group yet, create and embed a link to it in the user’s path.
6. Product analytics
Check if everything you have configured correctly in product analytics. Yes, clients with AppSumo are atypical clients and there is no need to extrapolate them to the entire audience. But it is quite possible to measure the frequency and retention of using individual modules and product functions.
If your product has little traffic and audience, then such data will be especially useful for you. At least you can understand which of the functions are used most often, and which do not notice or ignore at all.
How to run the AppSumo campaign
1. The first email
After you have prepared yourself, the team, and everything you have tested, you can only wait for the launch. We did not allocate additional servers for the campaign, but we knew that we could expand this resource at any time. Here’s a summary of traffic from AppSumo for the duration of our campaign.
Peaks on the chart, these are the days of the largest mailings. AppSumo does not send your offer immediately throughout the email list. They test it on a small volume and then look at sales and reviews. This is where the grail of a successful campaign lies.
A good average rating and positive reviews directly affect the activity with which AppSumo will send offers to subscribers, promote it on its main page, and invest in campaigns on Facebook and Instagram.
Our beginning was not the best. Even though we tested our tool many times before launch and the tester with AppSumo did it too — users still found a lot of bugs and started to bombard us with negative reviews and questions. In addition to bugs, for them was not obvious our “best” in comparison with competitors.
This led to the fact that AppSumo was forced to reduce our traffic until we fix everything and bring the average rating to at least 4.0.
2. The rules for working with reviews
I answered feedback and questions on the product page on the AppSumo website. Users’ requests were handled by our product manager and several people from the support department.
At the very beginning, we began to receive proposals to raise the limits according to the document. We said that plans have already been set and cannot be changed. If a person needs more limits, then just buy a higher plan. But then there were more such requests and we decided to raise the limits for each of the plans.
Listen to users and evaluate how expensive it is for you to add those features or increase the limits that they ask. A way to meet people is well displayed on reviews, and ultimately on the total number of sales.
When answering questions, use the templates that you previously compiled. Users will often ask you identical questions. It makes no sense to answer them each time in a unique way.
3. The webinar
Immediately after starting the newsletter and publishing the product page, AppSumo starts promoting the registration to your webinar, where for all those who have bought and who are in doubt, you will talk about the nuances of using the product.
Here is an example of my webinar — https://www.youtube.com/watch?v=SnSZNBMleAg. It was not the best way because of problems with the recording and weak English, but some users still wrote that the webinar clarified a lot for them.
Make a structure, describe specific cases, show on your behalf the use of specific functions.
4. Maintaining a public backlog
The first users ask about the public backlog. They perceive their purchase primarily as an investment and are ready to put pressure on you to add features that are important for them.
This is good since you can more accurately see in large numbers what exactly there is a need for. And the bad thing is that AppSumo users are not your only users and after the campaign, you can decide to turn your product in a radically different direction than upset this segment of your audience greatly.
If possible, carry out non-laborious items from this backlog immediately during the campaign. This again will greatly affect the rating.
Results and conclusions
What have we learned
No need to write features that are just planned on the pricing page. Users read them carefully and often make a purchase decision based on them. In a couple of months before the campaign, we added the number of users available for each plan to the price list.
We did it for the experiment, there was no real functionality yet. As a result, a huge number of buyers with AppSumo asked about this functionality and asked when it would be ready. It turned out for many the value of the tool is preserved only when teamwork is possible. And since we haven’t added it yet, some of those who bought it made a refund.
All unnecessary functions reduce the value of the product, even if they work correctly. Among the extra functions, I consider those whose value users don’t understand and you don’t bring it to them.
We had such a function block of text analysis for morphology. A couple of weeks after the start of the campaign, we decided to remove this block and were not mistaken. The tool has become cleaner.
AppSumo has a different audience, it is radically different from those who come by your search queries. And this is their great value, they immediately write out with whom they compare the instrument and by what parameters, they say what they like in your product and what they don’t like in your competitors. They are ready to participate in product development. Many of them have the consciousness of investors and entrepreneurs, not pure consumers.
The views on your product can differ dramatically: both in the plane of a good-bad product and in terms of answers for what tasks it is ideally suited. Some users wrote that we are the perfect alternative to Grammarly, another that we are better than certain SEO tools that they used earlier. It is important to always keep in mind that on AppSumo there is an audience with different goals and different experiences using other tools.
Don’t be lazy. If you feel that some cases of using the product, user funnels are not tested — test them yourself. If you feel that the support department does not know something, test them yourself by asking a couple of possible questions via chat or email. If you feel that something is not working perfectly and skip it, then it is likely that the first negative reviews about your product on AppSumo will be about that.
What to do after the campaign ends
- Make a brief squeeze of the strengths and weaknesses of your product based on feedback and questions from AppSumo.
- Think again about your core value and positioning based on user feedback. Perhaps they need to be changed.
- Write instructions for the most frequently asked questions from users.
- Support AppSumo users as well as those who pay you every month. Think of them as brand ambassadors and your customer acquisition partners. It is very difficult to use a tool for a long time and not tell your reference group about it.
Does your SaaS startup need AppSumo launch
Above, I wrote about the risks associated with the unit economy. If you are a well-growing service and product analytics shows that users often and for a long time use the tool, then carrying out such a campaign can lead you into a minus in terms of payback.
I recommend taking AppSumo:
- As a campaign to test your most risky hypotheses on the product, audience, positioning.
- As a tool that will improve your SEO and brand awareness.
- And only last but not least, as a tool for generating quick income.
If your product is worth something and you are in a large market, the money that you earn on AppSumo is a very small part of what you can get at all by becoming a market leader.
Therefore, for me, AppSumo is primarily a tool to accelerate startup growth. Even if in the unit economics of those users who bought the product on AppSumo you go to zero, such a campaign can be considered successful.
Please, share your experience with AppSumo campaigns in comments. Thanks!
