Thursday, February 19, 2015

Magical Software Adjacencies

Retail stores use magic to better merchandise their products and increase their sales. So says Paco Underhill, the author of "Why We Buy - The Science of Shopping." Underhill discusses techniques that managers of retail stores use to grab prospects' attention. With a little creativity, microISVs can use many of these techniques to sell more software.

Retail Store Adjacencies

Retail stores create adjacencies to increase their sales. It's a fact - putting two products next to each other will often get prospects to purchase both products. Software developers can use this same technique on their websites to increase their software application sales.

Underhill found that bookstore managers sold more volumes when they grouped books by the gender of the buyer. You'll find that most bookstores generate additional sales by grouping together books about nutrition, health, fitness, exercise, diet, and other book categories that are popular with women.

The author recommended that one of his clients - a computer store - group printers together by manufacturer. They quickly discovered that this wasn't the way that printer buyers want to see them grouped. Consumers come to a computer store knowing approximately how much they want to spend on their next printer. And they want to see, say, $100 inkjets across all manufacturers grouped together. After grouping printers by price range, printer sales increased.

Underhill went on to recommend that bookstores group children's books by price range. He found out very quickly that nobody cared about the minor differences in the prices of kids' books. So, for very low-priced products, people don't care about prices.

Online Software Adjacencies

How do Underhill's findings apply to online software sales? Software developers have to experiment and see which adjacencies create the most profit.

Try creating bundles. Combine two of your applications into a single product, and sell it at an attractive price. Bundle your software with other developers' programs, and share the profits. Try bundling downloadable software with related computer hardware, accessories, supplies, or books.

Perhaps you need to create adjacencies and bundles that are less obvious. Next to your "buy now" button you could place another button that says "Learn about our affordable family license." Or perhaps a banner that says "Coupon for a free upgrade to the next version of our software."

Bundle your software with a premium support package. If you're selling multi-user or site licenses to corporations and other large enterprises, selling premium support could be a real money-maker.

If you're like Underhill, your initial attempts to group software applications may not be very good. Try something, and measure the results. Tweak your bundle, and try again.

One last thought about Underhill's observations in retail stores - Endcaps and self-standing displays often increase product sales. Perhaps online merchants can find ways to replicate the effect with their online sales. Many microISVs are experimenting with floating windows and floating banners that follow the website visitor as they scroll around the page. As always, experiment with new marketing ideas, measure the results, make changes, and try again.

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