Monday, August 31, 2015

Software Developers Should Stop
Giving Away Freebies

Too many software developers give away their products and services for free. While there may be times when it makes good economic sense to give away your software, you should be looking for ways to turn free products and services into money-makers.

Free Software Applications

There are some perfectly good reasons to spend months developing a software application, and to distribute it for free. You can use a freebie as a loss-leader for the standard and professional versions of your application. You can use your free software to drive traffic to your website. You can use your free application to generate adware and other revenue.

There are also a lot of bad reasons for giving away your programs. Make sure you're not offering software for free for the wrong reasons.

Some developers create an application, try to market it to the world, and fail. Out of frustration, they provide the software for free, or release it as an open source program.

Before declaring your software application to be a loser, you owe it to yourself to understand why it wasn't a financial success. Perhaps you need to apply some creative marketing to your program to turn it into a moneymaker.

Put the program back into beta testing, and ask your testers why they believe that you weren't able to sell it. Watch in silence as your friends, family members, and neighbors try to install the program on their computers. See if they run into technical or logistics problems. If they're confused, then a lot of your prospects may have been befuddled, too.

Search the Internet for similar programs that are being offered for free or at bargain-basement prices. Compare your program's feature-set with your competitors' offerings, and add more features if needed.

Find a better way to describe your software. Ensure that the people who use your trial version have expectations that line up realistically with the features and benefits that your application delivers.

Examine your program's characteristics and your marketing efforts exhaustively before you consider giving away your application.

Free Software Features

Many software developers give away too many features in the free version of their programs. As a result, they have hundreds or thousands of users who haven't paid them a cent, and who are receiving all the benefits that they will ever need from this type of application.

Remember that the free version of your application is a marketing tool for selling the standard and professional versions. The purpose of the free version is to show the buying public that you offer a family of well-designed, well-executed applications. Don't give away so many features that software buyers don't need to pay for the income-producing versions of your software.

Free Lifetime Software Upgrades

Don't offer free lifetime upgrades to your software. If you talk with successful microISVs who have been in the software development industry for a decade or more, they'll tell you that the majority - the vast majority - of their income is generated by selling software upgrades to happy customers. Without exception, these successful entrepreneurs will tell you that you should always charge for upgrades.

It's tempting to use free lifetime upgrades as a way to differentiate your software from your competitors' offerings. The value of these free upgrades, however, appears to be larger in the developers' minds than in many prospects' minds. Most software buyers know that the chances of a software developer being in business six or eight years in the future are low. Buyers know that the value of a free lifetime upgrade guarantee is not huge.

In addition, many software buyers have found that their software application is no longer being offered a few years after they bought it. The Widget program has been replaced by Widget Gold, a new program that isn't covered under the discontinued program's lifetime upgrade guarantee. Buyers have been burned, and they don't perceive a free lifetime upgrade policy as having a lot of value.

Offering free lifetime upgrades may generate a few more sales at the beginning. But this policy will cause an ever-increasing financial drag on the company in future years.

Free Software Support

It's usually a good idea to offer free technical support for the software that you sell, especially if you're selling your programs to consumers. Most software customers expect to receive free support for the applications that they buy.

With business software, however, you might be able to turn technical support into a profit center. Business software buyers expect to receive ordinary support for day-to-day problems. But if your program is a mission-critical application for a particular business, the company might be willing to pay for an annual support contract or for some other type of premium support.

For a price, offer 12-hour turnaround on support tickets instead of your usual 24-hour turnaround. Offer telephone support in addition to email support. Offer to assign an account representative to your customer. Find a way to deliver product training and support that your business customers will find valuable, and market that service aggressively.

Free Multi-User Licenses

Many microISVs price their multi-user and site licenses with the small business customer in mind. By concentrating on small businesses, software developers often sell their larger licenses to larger companies at prices that are far too low.

Software developers have two pricing models to choose from:

(1) Some developers create price bands whose per-user cost decreases as the number of licenses increases. For example, a single-user license costs $25, two through five licenses cost $23 each, six through ten licenses cost $20 each, 11 or more licenses cost $18 each, and a site license is priced at $450.

(2) Some developers create packs. A single-user license costs $25, a 5-pack costs $115, a 10-pack costs $200, and a site license is priced at $450.

While either of these pricing scenarios might be attractive to the owner of a small business, they're an absolute giveaway to larger enterprises. If you're selling to large corporations or nonprofits with hundreds of employees, the pricing regimens described above would mean that you're offering your application for a few pennies per user. Looking at it from a different perspective, under these scenarios you'd be getting a fair price for the first 10-or-so copies of your application, and you'd be giving hundreds - perhaps thousands - of copies away for free.

Be sure that your pricing bands or pack prices include an attractive profit margin for huge institutions that buy enterprise-wide licenses. Stop giving away hundreds or thousands of copies of your program for free.

The Bottom Line

You work hard to create and support your software applications. Stop giving away your software unless there's a compelling reason to do so.

Monday, August 24, 2015

Use Routine microISV Emails
to Sell More Software

When you send routine correspondence to your customers, be sure to include a sales message for your software. Whether you're sending a receipt for the credit card payment that you just processed, or a reminder that the customer needs to renew their annual support contract, the email that you send should include an offer for another product or service.

In addition to my press release writing and delivery services, I also have a "Rent Al's Brain" service in which I spend four hours analyzing a website, prioritizing concrete suggestions and actionable ideas for optimizing the website to sell more software. When I email a customer a "paid in full" message for their credit card payment for a press release emailing, I always include a suggestion that they rent my brain. And when I'm emailing a receipt for the "Rent Al's Brain" service, I always remind my customer that I offer press release writing and distribution services.

Every microISV should do something similar with the invoices, receipts, newsletters, and other routine correspondence that they send to their customers.

Invite customers to buy another of the programs that you offer. Suggest that they upgrade from the Lite version to the Standard or Professional version. Mention the availability of multi-user and site licenses. Nudge them to buy copies of your software as gifts for friends, family members, and business colleagues. Tell them about other microISVs' software that you offer on an affiliate basis.

You don't have to write a long sales message. Here are the two most common messages that I paste into invoices for my two most popular services:

  • There are hundreds of editors who could print a press release about your software. We've recently added hundreds of new music, video, photography, and other multimedia editors. We have women's, parenting, and lifestyles editors. And, of course, we have computer, business, education, game, and programming editors.
  • Rent Al's Brain. For $299(US), I'll spend four hours analyzing your website. I'll give it a sales makeover that will turn it into a sales machine. Visit www.dpdirectory.com for more information.

Even if you don't think that it's appropriate to send a sales message to your customers with your routine correspondence, find a way to invite them to do something that strengthens your business. Ask them to follow you or like you on your favorite social media site, to subscribe to your blog's RSS feed, or to request your monthly newsletter.

Be sure to take advantage of every contact point that you have with your customers to promote and market your software.

Monday, August 17, 2015

Social Media Collaboration
Campaigns for Software Developers

A well structured, well executed social media collaboration campaign might increase your software sales. Unfortunately, only ten percent of enterprise social collaboration campaigns succeed.

A couple of years ago, Anthony Bradley, a group VP at Gartner, studied campaigns across a variety of industries. "The underlying reason for the low success rate," Bradley explains, "is usually that the organization did not provide a compelling cause around which a community could form and be motivated to provide their time and knowledge."

To succeed, Bradley suggests, marketers need to develop a plan that will define the audience that they're trying to reach. In addition, marketers need to define the result that they're trying to achieve. If you can provide your target audience with a goal that they can support, they'll rally to your efforts on the various social media groups.

As with most social media marketing campaigns, it's not enough to develop a cute tag line and a so-so call-to-action message. Marketers, including software developers, need to figure out what's important to their target audience, and create a message that draws prospects in and makes them want to participate.

Your social media collaboration campaign can be launched on one of the huge social media sites such as Twitter or Facebook. Or you can run your campaign on a home-grown web page that you've built to encourage your stakeholders to participate in discussions about your product or service. Encourage your customers, prospects, friends, and suppliers to use your forum or newsgroup to talk about your business and its products.

You may be surprised to learn that your customers aren't using your software the way you thought they would be. In their book "What Were They Thinking?" authors Robert M. McMath and Thom Forbes found that the marketplace is full of surprises. When you launch a new product, you may find that your buyers aren't the people you thought would be your buyers.

For example, Kleenex was initially launched as a cold cream remover. Sales were not very impressive. But the Kimberly-Clark marketers found that people liked the idea of having disposable paper handkerchiefs, and they repositioned Kleenex. Since their repositioning, sales have been enormous.

Similarly, Liquid Downy was developed by Procter & Gamble (P&G) as a way to soften diapers. Before long, customers started using it to soften all of their washables. So P&G repositioned the product and sold quite a few bottles of Liquid Downy.

By creating a community for your customers and prospects to discuss your software, you can get them to share ideas about how your software can be used in the real world. And that could result in increased software sales.

In 2001, before the social media sites became the huge force in the marketplace that they are today, Faith Popcorn and Lys Marigold encouraged marketers to create a community for consumers. "Connecting your female consumers to each other," Popcorn and Marigold believe, "connects them to your brand."

The authors devoted a chapter of their book "EVEolution - Understanding Women - Eight Essential Truths that Work in Your Business and Your Life" to the topic of getting your female customers to connect with each other.

Women connect to other people - at home and in the workplace - better than men do, Popcorn and Marigold tell us. Take advantage of this by creating a brand that brings women together. The authors say that a brand can become the glue that connects women into communities.

The book cites a study that declares that women are three times more likely than men to recommend a brand to friends and colleagues. Help women connect to each other, and they can tell others about your software.

Popcorn and Marigold insist that they are not talking about word-of-mouth marketing or relationship marketing. This isn't about putting a simple "tell a friend about our software" link on your website.

It's about creating a genuine community around your brand. Weight Watchers did this. They transformed dieting from a private act to a public one.

Use the social media sites, or create your own website where people can discuss what they're worried about and passionate about. If the site is centered around your software brand, then you can get prospects and customers to join your brand.

Friday, August 14, 2015

Targeting Prospects and Customers
for your Software

"Before you build a better mousetrap, it helps to know if there are any mice out there."

... quotation by James Donnelly, Jr. from his book "Close to the Customer"

To learn more about targeting prospects and customers, visit my Software Marketing Glossary.

Wednesday, August 12, 2015

Overcoming Procrastination
in Software Sales

No salesperson wants to hear you say, "I want to think it over." While this objection comes up a lot in face-to-face sales, it's even worse online. The Internet turns your software website into a procrastination machine.

Joe Girard, the author of "How to Close Every Sale," tells us that people procrastinate because they are afraid to make the wrong decision.

Girard knows a lot about sales. The Guinness book of World Records named Joe Girard "the world's greatest salesman." He sold 13,000 cars, with no fleet sales and no leases, in just 15 years. He knows a bit about face-to-face selling.

Translating Girard's ideas into the world of the software development industry, it's not just the $30 that you charge for your software that your prospects are concerned about. They also worry about the time that they'll be spending on it, as well as the fear that they might discover a better application next month. And they worry that their software-buying decision might be challenged by friends and colleagues. Take away prospects' fears and at the same time build up your software development company's credibility. You'll increase your software sales.

Enthusiasm is contagious, Girard explains. So is hesitation. The microISV's website has to enthusiastically talk about their software. Convince people that they need to start benefiting from owning your application. Urge them to buy.

I'm confident that Girard would tell you that it's good for your customer when you deliver a powerful sales presentation. You're helping your prospects by pushing them to make the right decision - the decision to buy your software. Don't be shy about it. And that's why believing in your software is so important to your being able to sell it effectively.

One approach to avoiding procrastination is to appeal to prospects' egos. Tell them that they're competent and important. They're certainly important enough to make a decision about buying your affordable software application.

Tell prospects that they deserve to enjoy the benefits of using your program. Parents make decisions every day about how to best educate their children. They should be comfortable making the decision to buy your program. Similarly, business managers and entrepreneurs make important business decisions every day. They have the authority to buy a site license for your application so they can increase the productivity of everybody in the office.

On the web, software developers need to anticipate procrastination, and deliver a sales message that encourages prospects to buy. Now.

Monday, August 10, 2015

Software Developers' Content
and Software Sales

By managing content creatively, companies - including software developers - can increase their sales. So say Ann Handley and C.C. Chapman, the authors of the book "Content Rules." The book's last ten chapters are case studies of how various companies used content successfully to promote their businesses and increase sales. Here are some insights about how one company uses content to increase its revenues.

This company creates three or more blog postings every business day. They also create videos, webinars, reports, podcasts, and free tools. Some of their videos have had tens of thousands of YouTube viewers.

The authors cite a Forrester Research study that says that an optimized YouTube video is 50 times more likely to show up on the first page of Google results (versus an optimized web page without a video).

Talk to your customers, the authors advise us, and write for them. Find out what kind of content they're interested in, and deliver it in the formats that they enjoy most.

Connect your blog and your website. Use a common design, and make it easy for prospects to move back and forth between them.

End each blog posting with a link to a specific piece of content on your website. The company in the case study claims that implementing this strategy tripled the number of leads that their blog generates.

The authors advise us to create a variety of content for our readers, including news, lighthearted articles, and longer thought-pieces.

Tuesday, August 4, 2015

Software Development Business
Lessons from Microsoft

For decades, software developers have had a love-hate relationship with Microsoft. Those of us in the software development industry love Microsoft for giving us the operating systems that have allowed us to build our businesses and feed our families. These operating systems have also caused us serious problems, from pulling our hair out to destroying perfectly good keyboards.

In 1997 Julie Bick, a former senior product manager at Microsoft, wrote a book entitled "All I Really Need to Know in Business I Learned at Microsoft - Insider Strategies to Help You Succeed." Her business primer provides some good insights that will help one-person independent software vendors (microISVs) succeed.  Here are some of her Microsoft-based ideas about running a software business:

Learn from your Mistakes

Bick tells us that Microsofties (the term of endearment that employees use to describe themselves and each other) are dedicated to learning from their mistakes.

"Microsofties relentlessly study their underdog products, failed marketing programs, and missed forecasts," Bick explains. "This is not to assign blame or prove why it was someone else's fault. Many of the company's best lessons have come from failures. Microsofties figure as long as they lost all that money, mind share, or market share, they may as well learn something from it."

microISV owners would benefit greatly by following this Microsoft practice. Too many microISVs draw the wrong lessons from their failures and mishaps. The software development forums are littered with superficial discussions about marketing and business failures, and many developers seem to be learning the wrong lessons from these conversations.

One developer will post a question such as "I've been thinking about buying a display ad in a magazine to promote my application. Has anybody tried buying display ads? How well did it work?"

Another developer responds, "I tried it last year, and I lost my shirt. I'll never do it again." And a chorus of other developers thank the responder for the advice.

Truth is, there is absolutely no marketing or business information to be gleaned from a conversation like this one. Was the developer whose advertisement failed in a growing software niche, a mature niche, or a declining market? Did the developer advertise in a well-targeted technical magazine, a general computer publication, or a business journal? Did the advertiser have any experience writing headlines and sales messages? Was the display ad's artwork professionally executed? Did the ad's call-to-action attempt to sell the software, or did it encourage the reader to download the trial version?

Without knowing more information than is usually included in these forum discussions, it's impossible to learn enough about the advertiser's failure to know if other developers might suffer the same fate. Studying failures requires a lot of work. It's dangerous to perform a superficial analysis and draw conclusions about how to best spend your time and money.

Don't Punish Failure

Microsoft's employees are not punished for failures, Bick tells us. The company believes that allowing people to fail makes it easier for people to take risks on future projects.

Often, people who run 1- or 2-person companies are too hard on themselves. Herb Cohen, the author of "Negotiate This," calls this the Personal Pimple Principle. "We judge others by what they have accomplished," Cohen explains, "whereas we judge ourselves based upon how far we have fallen short of our potential capability."

Learn from your mistakes, but don't beat yourself up if you've created problems. Everybody makes mistakes. Learn from them, and do better next time.

Listen to your customers

"You can imagine or guess what your customers think of this or that product or service," Bick tells us. "But there's no replacement for asking them directly."

Most developers' websites don't include their support phone numbers. I believe that this is a serious mistake, for a number of reasons.

It's possible that the trial version of your software has a major problem. And if you encouraged phone calls from your software's users, you'd find out about it much quicker than by continuing with the feedback regimen that you're now using.

If you welcome your customers' phone calls, you can ask them why they bought your software. You can inquire about why they almost didn't buy it. You can query them about improvements that they'd like to see in your application.

What if listing your phone number on your website results in your getting lots and lots of support phone calls? You'll find out what's wrong with your software, allowing you to correct the code, or explain better how to use your application. And you can always remove your phone number again, and reduce the number of annoying support calls.

At Microsoft, most marketing managers must take their turn on the product support lines, listening to Microsoft technicians dealing with customers' complaints. Try this in your business, too, by welcoming tech support phone calls.

Think Big

Microsoft likes to think small. Microsoft's "small," of course, is what microISVs refer to as "big."

Microsoft's philosophy is to run individual business units like small microISV shops. Sure, they have huge marketing budgets, and oodles of money to spend on research and development (R&D). But employees are empowered to act like they own the product that they're developing.

Microsoft's ability to make decisions at the individual business unit level, Bick tells us, means that Microsoft can compete effectively with nimble microISVs.

Compete Intelligently

Bick quotes Microsoft's Vice President Chris Peters on the topic of changing the rules: "You usually can't win by doing the exact same thing as your competitors, but ten percent better. You need to change the rules to get ahead. Offer something else."

This attitude is even more important for microISVs.

Think Ahead

What features should you add to your application next month? Next year? Bick tells us that at Microsoft, the management team is encouraged to think "three moves ahead."

They think about competitors, customers, and partners. All of these parties will react to whatever Microsoft does. And before Microsoft implements any change, their management team thinks through how these people will react - and how Microsoft will respond to their reactions.

Fill Real Needs

Microsoft is always looking to fill unmet needs. They've figured out that there are great rewards for being the company to "get to a new platform, paradigm, or even country first with something customers want."

Remember, however, that even the smallest operating unit at Microsoft has access to R&D resources and marketing money. Be realistic when assessing what it will take for your microISV firm to break fresh ground and create a new category of software.

Openly Alpha Test and Beta Test

Microsoft tries to interact with customers and prospects before developing new software.

Microsofties aren't afraid to show prospects early versions of their software, even if there is missing functionality and an assortment of bugs. It's better to get reactions from prospects to your ideas, Bick explains, than to try to figure out everything while locked in your office.

The Bottom Line

Learn from your peers. But be open to learning more about Microsoft's management process. Adopt the ideas that Microsoft employs if these ideas would make sense in running your software development firm.

For more software development business and marketing ideas, visit my Software Marketing Glossary.