Monday, March 30, 2015

Software Sales,
Target Marketing, and Segmentation

Mass marketing is a good way for a small independent software vendor (microISV) to sell small quantities of software. But if you want to build a software development company that will last for years, you need to learn to segment the marketplace, and to target each segment with its own sales presentation and perhaps even its own software version.

With mass marketing, you create a single product or service, and a single sales message. Using a "one size fits all" marketing strategy, you try to get as many people as possible to buy your software applications. By contrast, target marketing identifies significant groups of prospects (segments), smaller groups (niches), and even smaller groups (market cells).

If you can target a specific group of individuals, it's much easier to sell them your software because you can tailor the software and the marketing message much more effectively to their needs. Marketing isn't something that you do to a software application after it's been developed. Marketing has to be baked into the software itself. Software developers need to define their target markets before software design begins, and weeks before the first line of code is written. Determine the needs and desires of people in every segment that you're targeting, and tailor the substance of your software to meet those needs. Then, design unique sales messages that make your software irresistible to each market segment.

Geographic Segmentation

For software developers, geographic segmentation means translating and localizing the software, help files, and sales presentations for prospects in every major language and country on the planet. You don't need to offer your software in multiple languages on the first day that you launch a new application. But it makes a lot of sense to design your software with all of the key software strings in the same place so that you can give it to professionals for translation and localization.

Benefit Segmentation

microISVs need to create a separate sales message - and possibly a separate version of their software - for each group of prospects that is expecting a specific benefit from the application. For example, if you're marketing a text editor, word processor, or other text-intensive program, you may want to add a legal dictionary and spell checker to make it easier to market the application to attorneys. Similarly, you can target hospital administrators and medical office managers by adding a dictionary and spell checker for health, fitness, and medical words and phrases.

It may not be necessary to create separate versions of your applications. You may simply need to customize your sales message to emphasize the benefit that would be attractive to each segment. With a little creativity, you might find a way to promote your application to, say, both bargain-hunters and to people who seek high-prestige software products or services.

Identify the groups of people who would benefit by having your application installed on their computers. Whether it's people with particular physical limitations or people who work in a specific industry, explain why your application is the right program to solve their problems.

Benefit segmentation allows you to create seemingly conflicting sales messages that appeal to different groups of prospects. For example, use one sales message to appeal to people who want to use leading-edge technology, and another sales presentation for prospects who value your software's rock-solid reputation for stability and safety.

Create a separate landing page, develop case studies, write whitepapers, design eBooks, and write a blog for each segment you need to target. Create a large library of the right type of content, and the search engines will send nicely-targeted traffic to your websites and blogs.

Demographic, Psychographic, and Lifestyle Segmentation

Identify market segments of prospects who have similar characteristics, and help them find a sales message for your software that is targeted specifically to their needs. The difficult task is determining which demographic, psychographic, and lifestyle characteristics affect prospects' eagerness to buy your software.

Men and women buy things differently. For example, the October 2013 issue of Consumer Reports magazine points out that 56 percent of men take multivitamins or supplements, while 76 percent of women take them. Does this mean that vitamin manufacturers should tailor different sales messages to nudge men and women to purchase the pills? Maybe. Or perhaps women are the major buyers of these products, and vitamin makers should craft sales presentations to encourage men to take the vitamins that their wives have already purchased.

Would a prospect's marital status affect his or her inclination to buy your application? Before you create separate messages for married versus single people, perhaps you should create a more detailed set of lifestyle alternatives. Try defining segments for individuals who have never been married, newlyweds, long-married people, recently divorced individuals, and other groups. For example, home financial planning software would have to consider these varied statuses.

Ultimately, you're probably going to find that the best market segments have combinations of attributes such as highly-educated senior citizens or teachers in affluent school systems. As with all marketing campaigns, develop a sales message, measure the results, make changes, and measure again.

Occasion Segmentation

With occasion segmentation, software developers need to examine event-based usage of their software, and target prospects based on how they use their application. For example, if you've created a kid's game, you might want to create a separate sales message for home-schooling parents. Or if you offer an education application, you might want to create a separate landing page for people involved with continuing education.

Find a way to turn your software into a gift that people will want to present to friends, business colleagues, and loved ones. You may find that there is a substantial market for people buying your program as a graduation present, a Mother's Day or Father's Day gift, or a Valentine's Day surprise.

Usage Level Segmentation

Behavioral segmentation or usage level segmentation means targeting prospects based on how intensely they might use your software. For example, if you market a file management utility, you could target several user segments. If your application handles basic functions extremely well, you could appeal to newbies by emphasizing the short learning curve. For power users such as network administrators, database managers, and computer consultants, describe the program's many features and power.

In addition, there may be a segment of prospects who need a combination of these two sets of benefits. Explain how your program is ideal for people who need a feature-rich product but only use the software a few times each year.

The Bottom Line

It's a lot more work to create a different sales message and perhaps even a different software product targeted at each market segment. But you can sell a lot more software with targeted marketing.

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