Friday, June 7, 2013

Gift Cards for Software

You can increase your microISV company's revenues by offering gift certificates for your software.

People buy entertainment, game, and home software for friends and relatives. And when the end-user has a problem with the software, they're much more likely to ask for help from their friend than from you, the software developer.

Business people buy productivity programs for colleagues and employees, especially during the year-end holidays.

This is the season for graduation and wedding gifts. Graduates might enjoy games, and perhaps business and productivity applications. Weddings and showers might be good opportunities for offering gift certificates for nutrition, cooking, and home maintenance software.

Many consumer and trade magazines and newspapers have Holiday Gift-Giving Guides that describe tech toys - like software - that make nice presents. Be sure to send them your year-end press release by the end of August if you want Christmas coverage for your application.

Most developers sell gift certificates for a specific version of the software. If you offer a number of software packages for sale (either programs that you've created, or other developers' applications that you sell on an affiliate basis), it might be worthwhile to sell gift certificates for a specific amount of money instead of gift certificates for a copy of a particular program. For example, sell a $25 gift certificate that can be used for any program or group of programs that you market.

According to First Data and Market Strategies International's "2012 U.S. Prepaid Consumer Insights Study" (as reported in the February 2013 issue of Direct Marketing News), the average amount of money that a consumer spent over and above the value of the gift card that they'd received is $20.79(US).

It's hard to compare the buying experience of somebody who received a gift card from, say, a sporting goods store with the experience of somebody who received a gift card for your software. But there might be a way to turn gift cards into additional sales, cross-sales, upgrades, and other upselling opportunities. Just look at the gift card display rack in your local grocery store to see how popular gift card sales are.

Before you launch a gift card program, look at the regulations that apply to sales where you do business. Here in the U.S., a few states have laws that regulate gift card expiration dates. And some states require you to jump through hoops with gift cards that aren't redeemed within a certain number of months; these states treat gift cards as unclaimed assets, in much the same way that abandoned bank accounts have to be turned over to the state.

It's complicated. But gift cards might offer some interesting opportunities to increase your microISV's revenue stream.

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