TidBITS: Marketing Software

Article 1 of 2 in series

10 Sep 2002 | Print

Marketing Software, Part 1

So you've built what you think is a great application. All your Mac-using friends think it's cool. Your beta testers tell you that it works. All you've got to do now is post it to VersionTracker and Download.com and you can quit your day job, right? Don't do itShow full article

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Don't do it. Not yet, anyway.

You may have an application, and it might be truly useful (rather than a candidate for MacHack), but you don't necessarily have a product or, more importantly, a solution. What's the difference? A pencil is a product, but it's not a solution. Sure, you write with a pencil, but you can't do anything with that pencil if you don't have a pencil sharpener and paper. So until those items are in the mix, you don't have a solution.

As a software developer, you're probably more comfortable building your software than marketing it. While there's nothing wrong with creating software to "see what I can do with a Mac," you'll need a marketing perspective before you'll successfully sell your application as a solution.

Three Dangerous Assumptions -- Developers, like anyone else who creates a product, can be susceptible to dangerous assumptions, which, unless examined closely and continually, can doom the product to failure. Perhaps more than most, developers need to avoid falling into three traps.

Trap #1: The product will sell because the creator thinks it's a good product. What matters is the customer's point of view; an application's cool factor in no way guarantees its success. Keep in mind that there are ways to convince the customer it's a great product, which we'll look at in the second part of this article.
Trap #2: Customers will buy a product because it's technically superior to the competition. You don't have to go very far to see how this one plays out: Windows has 95 percent of the market. The Mac OS has 5 percent. 'Nuff said.
Trap #3: Customers will agree with you that the product is great. Maybe, maybe not. You can't ever assume that.

Taken together, these three assumptions often can lead to equally false beliefs, such as the product being so cool and so great that it will sell itself, or that you somehow will be able to insulate your product from any competition. The history of software is littered with the corpses of applications and companies, big and small, that have perished under such lofty ideas.

Improve Your Odds -- So, how can a developer increase the admittedly long odds that a new product will succeed in the marketplace? You need to ask yourself a series of questions and be reasonably sure that you have solid reasons, backed by market research, to believe your answers are real and true.

First, who will buy the product, and what problem will it solve for them? You may think that because you're developing Mac software that the whole universe of 25 million Mac users is your market. That's unlikely to be true. For example, I consulted for Sustainable Softworks, a developer of Macintosh networking products and utilities. If you have only a single Mac, you don't need a networking application. If you don't have an Internet connection, you don't need a firewall or software to optimize that connection. Sustainable Softworks' products were therefore applicable to only a specific galaxy within the Mac universe.

Further, you need to think in terms of your addressable market. What portion of those 25 million Mac users can you actually reach? How will you reach them? Do you have an ad budget? Can you write effective press releases and do you know where and how to distribute them? Also, a significant portion of the Mac market is overseas. Can you communicate to those users in their language(s)? If you can't do those kinds of things, your addressable market will shrink.

Let's say you've identified a real problem that your software can solve for users. Congratulations! You've made a significant step forward. But there are often multiple solutions to any problem, and you need to understand how users are solving that problem today. Are there workarounds that, while inconvenient, may not be sufficiently inconvenient to cause the user to want to spend money on your solution? Always keep in mind that people will tell you what they want, but will spend money only on what they actually need. The toughest part of your job is figuring out what they need.

If you can offer a better, faster, and/or cheaper solution to a problem, you have a good chance of being successful - but you must be able to prove it. For example, email is clearly better, faster, and cheaper than a fax for getting a document into another person's hands. A fax, while it often was more expensive than using regular postal mail, obviously was faster than the post office.

On the other hand, for years the primary claim of many Mac products was that they would somehow make you more productive. That's a tough thing to quantify. You need to consider how you will demonstrate to the customer that your solution is better, faster, or cheaper than what they're doing now.

The next questions to ask yourself relate to how you will sell the product. What will be your distribution method? Will you sell online? Will you do only electronic distribution, which is cheaper, or will you offer the software on CD-ROM, which seems to be favored by more people? Do you need a network of salespeople or resellers? Who is your target market? Consumers, small businesses, network administrators? All of these issues contribute to how you'll sell your product.

You also might need to consider an ancillary question: Can you survive financially while you build your customer base? The time period during which a market adopts a new product varies with each product, but consider this: Innovators are those who are the first to purchase any new product. Most experts believe the innovators make up about 2.5 percent of the market. Early adopters (about 13.5 percent of the market) are the next to purchase, followed by the early majority (34 percent), late majority (34 percent) and then the laggards (16 percent).

Finally, how will you differentiate your product in the market? Most developers think in terms of features. Fair enough. Many customers say things like, "I wish I could [insert action here]" and developers respond to that. But remember that, while features are important, customers actually respond to the benefits of those features, not to the features themselves.

For example, look at Apple's Mac OS X box, which touts Aqua, a feature. Aqua's benefits include being "intuitive for new users", and "powerful and customizable for professionals." The Finder is a feature; its benefits, Apple claims, include helping you "quickly navigate and organize gigabytes" of various types of data. You may or may not agree with that claim, which points to the importance of being able to convince users that what you say about your product is true.

Before you can successfully differentiate your product, you must fully understand your competition. Once you've done that research, you can begin to craft your marketing message and value proposition - how your product will benefit the user - to suit your target market(s). That message may vary depending on what stage of the adoption curve - the phases in the process of deciding to make a purchase - the customer is in at the time the message is delivered.

Set Phases on Sell -- Every buying decision a customer makes goes through six distinct phases, though some phases may take place simultaneously. The first stage is awareness, where the customer learns about your product. The second is the information stage, during which the customer gathers information about the product and develops an interest in it. The third phase is evaluation: the customer envisions using the product, and also considers alternatives.

The fourth phase is the trial phase, where customers might experiment with the product itself, but also tests it for "social acceptability" - the customer is interested in what others think of the product and what friends and acquaintances might think of her if she buys and uses the product. Phase five is full-scale adoption. The customer has bought it and uses it. The final phase is reinforcement, where the customer is continually reminded that she in fact made a good buying decision.

The process of getting a customer to buy the product includes a combination of appeals to logic and emotion, delivered through either impersonal media (the mass media such as print, broadcast, or the Internet) and personal media, which include friends, experts, opinion leaders, and the like. In the second part of this article, I'll talk about how you can make those appeals with a good marketing plan, and also include examples of sales successes.

In the meantime, I'd encourage you to check out the following Web resources for more information on marketing software: the Product Development and Management Association; the University of California, Berkeley's Software Product Marketing page; the Silicon Valley Product Management Association; and the Association of Shareware Professionals

<http://www.pdma.org/>
<http://www.iwl.com/SPM/resources.html>
<http://www.svpma.org/resources.htm>
<http://www.asp-shareware.org/>

[Mike Diegel is a strategic marketing and public relations consultant specializing in helping small businesses and other organizations use the Web more effectively.]

<http://www.emortals.com/>

Article 2 of 2 in series

16 Sep 2002 | Print

Marketing Software, Part 2

by Mike Diegel

Have you done your homework from last week's article? In preparing to market your software, have you done the research, readied your product, and crafted your marketing messages? GoodShow full article

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<http://db.tidbits.com/article/06933>

I'll focus on online distribution and sales, because unless you're prepared to make a six- or seven-figure investment, it will be extremely difficult for you to put your software in a box and get it on the shelf at CompUSA or Best Buy. So, you first need a Web site where people can learn about your product, download it, and purchase it. While a complete discussion of what makes an effective Web site is beyond the scope of this article, there are some guiding principles to keep in mind.

Simple and Effective -- First and foremost, you need to establish the purpose of your site. Although the Web offers many possibilities, you want to do three things and three things only: attract visitors, turn those visitors into prospects, and then turn those prospects into paying customers. That's it. Everything you do related to your site should contribute to those goals; otherwise, why do it?

Strive for a clean and simple site. A fancy Flash presentation on your home page will baffle search engine spiders and cause them to pass you by, wasting all the work you need to do to get included on Google, Yahoo, or other sites.

<http://www.google.com/>
<http://www.yahoo.com/>

At the same time, your home page must state clearly what the visitor will find there, and how to find it. Make good use of your Web statistics reports to judge how well you're accomplishing that goal. For example, I have a client whose site was clean and simple, but it wasn't clear. When I looked at their Web stats, I could see that the home page was near the top of the entry page list, but it was also one of the top 10 exit pages. That's not good. Combined with some other information, it meant visitors were finding the home page and going no further into the site.

Another important design consideration to keep in mind is scrolling. More than 90 percent of visitors never scroll horizontally to see page content, and about 30 percent won't scroll down to view any content "below the fold," or the bottom of the window. A significant portion of your visitors could miss any important information or links located in those places - links like a Buy button, for instance.

Build Awareness -- To get customers to your site, you must engage them in phase one of the buying decision-making process discussed last week: the awareness phase. At this stage, the mass media tend to be the most effective means of communication. That's not to denigrate word-of-mouth. It simply means that word-of-mouth takes on more significance later in the process.

In most people's minds, the three most common ways to drive traffic to your site are search engines, paid advertising (and here I include putting your URL on stationery, trinkets, etc.), and free media, otherwise known as press coverage. You can also learn a lot of other creative ways to drive traffic at sites such as Trafficology or MarketingSherpa.

<http://www.trafficology.com/>
<http://www.marketingsherpa.com/>

The key to search engines is to make sure the keywords you select are the ones that your customers are likely to use. Too often, you can get caught up in industry jargon and assume that's the language that everyone uses. Test your keywords by entering them in some search engines. Do your competitors appear? Are the results showing the types of sites you want to be associated with in a customer's mind? If not, you need to examine your keywords.

Paid advertising online includes ads or sponsorships in newsletters like TidBITS, banner ads on sites, and pay-per-click ads, which also depend on keywords. For Sustainable Softworks, a Mac developer I consulted with for nearly a year and a half, the pay-per-click approach was the most effective form of paid advertising, with targeted electronic newsletters coming in second. Again, you must target and test for your audience.

If you buy a keyword on Google or Overture, you will likely drive Windows users to your site. If you're a Mac-only developer like Sustainable Softworks, you're paying for someone who might never use your product, but remember that many Windows users will download software at work for use on Macs at home.

<http://www.overture.com/>

Other than releasing updates, which I recommend you do every six weeks or so, the single most effective way I've found to drive traffic is media coverage. That's especially true for online media, where a direct link to your site can be included. Every time we sent out a press release about a Sustainable Softworks product, we saw a significant spike in the number of software downloads, even if only one media outlet picked up the story.

The field of media relations is another topic in itself, but you should know that the Mac community is blessed with many Web sites and traditional publications devoted to informing Mac users about the latest and greatest products. Use that resource. (Start by checking out Adam's "Hacking the Press" series starting in TidBITS-538).

<http://db.tidbits.com/series/1172>

Learn to write a good press release. You may have heard of the traditional five Ws of journalism - who, what when, where, and why - but more and more editors want to know the "how" of the story as well; and who's better equipped to talk about it than you? You can take an inexpensive course in writing for the press through local adult education programs or community colleges. Many local business groups offer seminars in the topic as well. If you take the time to learn something about the journalism profession, and can show editors by your releases and by how you treat them that you respect what they do, you can see a tremendous payoff in coverage of your product.

Prospecting for Gold -- Now that you've created awareness and driven visitors to your site, you're ready to convert them to prospects. At this point, the customer is gathering information, evaluating the value your software has for him or her, and getting into the trial phase.

Here you want to emphasize any kudos you've collected for your work. Include links to press coverage and reviews, even if they're for another product you've done. It's also valuable to quote from beta testers (with their knowledge and permission, of course); with a new product, those quotes may be all you have available.

As you collect feedback from prospects and customers (a subject I'll come back to in a minute), ask for their permission to post positive comments on your site. Psychologically, it's critically important to a potential customer to know that other people have used the product and approve of it.

What form should your software take for these prospective users? In my experience, fully functioning trialware is the way to go. I have nothing against shareware - it's a great idea and one that has led to the creation of cool software that never would have appeared otherwise, especially in the early days of personal computing. But as a developer, perhaps you want to maximize your selling opportunities so that you can afford to write more great software. Do a little social engineering and avoid the word "shareware." Too many people have come to equate it with "freeware."

Resist the urge to cripple the trialware by disabling some features. Give your prospects the chance to download a full version of that terrific software you wrote. After all, why would you not want a prospective customer to see everything your product can do? Instead, build in a time limit of three to four weeks, after which the software quits working unless the user purchases a registration key. Alternatively, consider limiting the number of times prospective users can launch your program - that eliminates a potentially stressful or irritating deadline while still making sure that people who want to use your program purchase it.

From Try to Buy -- Now that the software is installed on the prospect's hard drive, how do you convert him or her to a paying customer? Follow up. At Sustainable Softworks, we created a system in which we asked for customer information - on a voluntary basis - and stored it in a database. Each day, I would go through the records from seven days before and send those people a follow-up email.

The message was low-key, simply asking if the software was working properly and if there was anything we could do to help (even if the customer hadn't yet paid). We included a reminder about the trial period expiration and a link to our registration page.

After sending out thousands of email messages, the feedback we received was overwhelmingly positive. Comments such as "I am impressed at the focus on customer satisfaction," and "This is the first time I have ever received email from a software publisher that had a helpful and friendly, instead of nagging, tone" were proof that the system enhanced the company's reputation for good customer service. It was also the best way we found to collect quotes from users that we could use for promotional purposes.

But the system's real value was in the conversion of prospect to buyer. We increased those conversion rates from 25 percent to 40 percent, depending on the product. In addition, we achieved conversion rates much higher than the typical one percent. Those numbers contributed directly to the bottom line.

We also devised a similar system to follow up with customers who tried to register products, but for whatever reason didn't complete the process. We were able to save a number of sales that otherwise would have been lost.

When It Works, Keep Working -- Now you have a broad outline of an integrated marketing and public relations program that cost-effectively produces sales. There's just one more thing - once you've gone through this process, do it again and again. Question your assumptions. Study your results. And be sure to keep up with the market by consulting additional resources, such as Trafficology and MarketingSherpa, mentioned earlier, and the AdMarketing discussion list and resource section of Netpreneur.org. You can also email me at <mdiegel@emortals.com> for a free copy (in electronic format only) of "Media Relations Made Simple," a short publication I created discussing low-budget ways to achieve press coverage.

<http://www.netpreneur.org/>

Make this process an integral part of your business. The market changes constantly, and if you want to be successful, you must change along with it.

[Mike Diegel is a strategic marketing and public relations consultant specializing in helping small businesses and other organizations to more effectively use the Web. He can be reached at <MDiegel@emortals.com>.]

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Series: Marketing Software

Marketing Software, Part 1

Marketing Software, Part 2