Thursday, January 2, 2014

Showrooming, Competitive Strategies,
and microISV Sales

Showrooming is the ability of customers to do in-store comparisons of the prices of retail products. Without leaving a store, prospects can use their smartphones to compare the price that the store is charging for a retail product with the price that other physical and online stores are charging for the same or similar items.

Showrooming is hurting retail stores worldwide, including the office and home electronics stores that sell boxed, shrinkwrapped software applications. Taken to the extreme, showrooming will drive prices down and will ultimately lead to the commoditization of software.

Brick and mortar stores are implementing innovative ways to deal with the problems caused by showrooming. Price-matching is a common tactic. Stores agree to match other stores' prices for identical products.

Some retail stores are trying to mimic the product reviews that buyers love (and hate) online. These local stores have made their websites' reviews available so customers can compare competitive solutions to their problems. Other retail outlets are training their salespeople and customer service representatives to be able to field prospects' questions about the products that they offer.

Competitive Strategies

What can microISVs do to take advantage of the price-shopping that takes place in retail stores? There are no perfect solutions. But here are some strategies that might respond to prospects' demand for the lowest prices for the software that they want and need:

Adjust your prices

Don't automatically lower your software prices. But carefully review your competitors' prices, and ensure that you're not being undersold.

Create a family of products

Consider converting your application to a family of programs, with different feature sets, and different price points. Be very competitive in your pricing at the low end of the spectrum. Since you're probably competing with free programs at the "Lite" end of your product line, you might want to release your light version at a particularly low price.

Price your high-end products a bit higher than your competitors, and tell a strong story about the value of the features that they include.

Compare prices online

Create a page on your website that compares the prices of your software with the prices of your competitors' applications. Check your competitors' prices and feature sets regularly, and ensure that your price-comparison page contains current information.

Publicize your software with press releases  

If magazine editors, newspaper editors, bloggers, and software reviewers don't know about your applications, then they can't tell their readers about the programs that you offer. Send press releases, and get some of the free publicity that press release campaigns generate.

News releases can help with your software's visibility, even months after you launch your press release campaign. Many publications and online software review sites have roundup articles. These write-ups have titles such as "Best Excel Add-Ins" and "Handy Windows Utilities You Should Own." Getting listed in these roundup articles can generate publicity in holiday gift-giving guides, best-of-the-year software picks, and similar write-ups that identify editors' picks for must-have applications.

Build an affiliate network

You might not have the resources to develop the kind of value-added reseller (VAR) program that you'd need to attract the huge VARs that call on corporations, nonprofits, and government agencies. But you can still use other microISVs to cross-sell software. Contact software developers who offer applications to the same niche that you're targeting, and sell each other's programs on a commission basis.

Content, content, content

Increase the number of words on your website. Lots.

Use your blog to generate a steady stream of articles about your software and about the industries and customers that you serve. Add case studies, whitepapers, and eBooks to your website. The more keyword-rich articles you add to your site, the more traffic the search engines will send you.

The bottom line

Showrooming has heightened consumers' awareness of prices. Even software sold at home electronics and office superstores may not have the competitive edge it previously enjoyed. With a series of strategies to increase your visibility and ensure that your pricing is attractive, you could benefit from the showrooming trend and increase your retail software sales.

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