Andy Brice, Successful Software

Andy Brice from Successful Software blog just released an excellent article where he is featuring 13 examples of software launches gone sour.

The article cover thirteen different software products and their launches that didn’t turn out like the software creators expected.

There are many lessons to be learned and if you are serious about your Software Marketing I suggest you read through the whole article.

Some of the bigger takeaways are that the software authors failed to research the market enough before venturing out and creating their software and the failed to market it when the product was released.

Take it away Andy…

Software entrepreneur culture is full of stories of the products that succeeded. But what about the products that failed? We rarely hear much about them. This can lead to a very skewed perspective on what works and what doesn’t (survivor bias). But I believe that failure can teach us as much as success. So I asked other software entrepreneurs to share their stories of failure in the hope that we might save others from making the same mistakes. To my surprise I got excellent 12 responses, which I include below along with one of my own. It is a small sample and biased by self selection, but I think it contains a lot of useful insights. It is an unashamedly a long post, as I didn’t want to lose any of these insights by editing it down.

Case #1: DRAMA

Contributor

Andy Brice.

The product

DRAMA (Design RAtionale MAnagement) was a commercialization of a University prototype for recording the decision-making process during the design of complex and long-lived artefacts, for example nuclear reactors and chemical plants. By recording it in a structured database this information would still be available long after the original engineers had forgotten it, retired or been run over by buses. This information was believed to be incredibly valuable to later maintainers of the system, engineers creating similar designs and industry regulators. The development was part funded by 4 big process engineering companies.

Why it was judged a commercial failure

Everyone told us what a great idea it was, but no-one bought it. despite some early funding from some big process engineering companies, none of them put it into use properly and we never sold any licences to anyone else.

What went wrong

• Lack of support from the people who would actually have to use it. There are lots of social factors that work against engineers wanting to record their design rationale, including:
  • The person taking the time to record the rationale probably isn’t the person getting the benefit from it.
  • Extra work for people who are already under a lot of time pressure.
  • It might make it easier for others to question decisions and hold companies and engineers accountable for mistakes.
  • Engineers may see giving away this knowledge as undermining their job security.
• Problems integrating with the other software tools that engineers spend most of their time in (e.g. CAD packages). This would probably be easier with modern web-based technology.
• It is difficult to capture the subtleties of the design process in a structured form.
• A bad hire. If you hire the wrong person, you should face up to it and get rid of them. Rather than keep moving them around in a vain attempt to find something they are good at.
• We took a phased approach, starting with a single-user proof of concept and then creating a client-server version. In hindsight it should have been obvious that not enough people were actively using the single-user system and we should have killed it then.

Time/money invested

At least 3 man years of work went into this product, with me doing most of it. Thankfully I was a salaried employee. But the lack of success of this product contributed to the demise of the part of the company I was in.

Current product status

The product is long dead.

Any regrets?

It was a fairly painful experience. I would rather have spent all that money, time and energy on something that someone actually used. But at least I learnt some expensive lessons without using my own money.

Lessons learned

• Creating a new market is difficult and risky.
• Changing people’s working habits is hard.
• Social factors can make or break a product. The end-users didn’t see anything in it for them.
• If the end-users don’t like a product, they will find a way not to use it, even if their bosses appear to be enthusiastic about it.
• Talk is cheap. Lots of people telling you how great your product is doesn’t mean much. You only really find out if your product is commercially viable when you start asking people to buy it.

Case #2: CleanChief

Contributor

Sam Howley.

The product

CleanChief was to be ‘The easy management solution for cleaning organisations’. Managing assets, employee schedules, ordering supplies, you name it CleanChief handled it. Essentially it was light weight accounting software for cleaning companies.

Why it was judged a commercial failure

A small number of copies were sold. No one is actively using it at present. Once I realised that it wasn’t a complete product and that additional development was required I moved on to other product ideas. I had basically run out of enthusiasm for the product.

What went wrong

• I am not an accountant.
• I have never run a cleaning company.
• I developed it for more than two years without getting feedback from real cleaning companies. I was arrogant enough to think that I knew what they wanted (or could work it out on my own). Or maybe it was that I was just where I was most happy and comfortable – writing software. Talking to real users was new and to be honest a bit scary for me.
• A successful cleaning company operator, a friend of a friend, offered to become involved for a 30% share. This was a gift from the heavens, exactly what I needed. I refused.
• In a way, even though I spent so long on the product, I gave in too soon, I was just getting feedback from real users, just getting my first batch of sales when I decided to move on.
• I developed the application in VB6 even though I knew it was outdated technology when I started the project.This meant there was no ‘cool factor’ when discussing it with other developers, I told myself it didn’t bother me, but it probably did.

Time/money invested

I worked on it at night and weekends for about 2 1/2 years. I paid for graphic design work, purchased stock icons and images. I probably spent a couple of thousand Australian dollars in total and an awful lot of time.

Current product status

I moved on to other products that have gone much better. My newer products were released in months rather than years and I looked for real feedback from real users from day one. they are:

• QueryCell – an Excel add-in making SQL in Excel easy.
• QuizNightChief – the easy way to organise a quiz Night.
• CustomerCradle – The easiest way to record and report on where your customers come from.

I do occasionally ponder returning to CleanChief and trying to raise it from the ashes.

Any regrets?

No. Looking back I learned a few lessons from a huge amount of time and work, it was a very inefficient way to learn those lessons. But when you are new to something like starting a business or creating useful software being inefficient at learning lessons is the best you can do, it’s a thousand times better than not learning lessons at all.

I learned so much more in my two and a half years of trying to develop CleanChief than I did in the two and a half years prior to that, during which time I really wanted to start a software business but didn’t take any action.

Lessons learned

Hearing or reading some piece of advice is totally different to living it. Here are some of the ideas that I always agreed were true but didn’t fully understand the implications of until I had lived them out:

• Force yourself to get out and talk to people. Ask their advice. Almost everyone will help if you ask them for feedback.
• Force yourself to cold call a few businesses in your target market.
• Create a plan of how to market your product.
• Try and use your product as much as possible as you build it.
• Get out of your comfort zone from day one
• Do not have the mind set that the day you release version 1.0 is the finish line, it’s the starting line, so hurry up and get there.

Case #3: Chimsoft

Contributor

Phil Anderson.

The product

ChimSoft – Software for Chimney Sweeps.

Why it was judged a commercial failure

I believe this failed for two reasons:

• Focusing on too small of a niche
• Me not being able to work full time on it.

I don’t consider it a complete failure because I sold two copies when it retailed for $2k, and maybe 10-15 more copies when I lowered the price to $200. Those sales proved that I wasn’t completely off base in thinking there was a market for the software, but the cost of customer acquisition and the size of the market were too small. Customers wanted to have a bunch of phone calls, face-to-face etc… the type of stuff you only see with much more expensive software. The problem was that for a niche this small we had to charge a lot of money to make it worthwhile for us, but the customers were small businesses where this is a major investment, so the fit was never right. The other issue was the people that did buy it were not super tech savvy, so there was a high cost of support that made even a $200 product not worth it.

What went wrong

• Having all partners who were not full-time, and had equal equity.  I ended up doing most of the work and this is the main reason I didn’t force success is I felt I was in it alone.
• Focusing on too narrow of a niche.  The plan all along was to expand for all service industries, but it was much harder to make that move than we expected.
• Not researching pricing more, we knew small businesses made major purchases for things that really helped their business, but I think it would have been better to have a cheaper product with wider appeal than an expensive product with narrow appeal.

Time/money invested

I invested maybe a year of time and $3k into the company. I did not take any huge risks on it, so there were no big negative outcomes.

Current product status

The company folded in 2007, I refocused my efforts on my existing companies (AUsedCar.com and BudgetSimple.com) and both have been doing well enough that I quit my day job.

Any regrets?

I don’t regret it entirely, I think I learned several valuable lessons about working with other people, small business sales, trade-shows and software development.

Lessons learned

• Pick partners wisely. Don’t try to be even-steven with equity. Use restricted stock to ensure everyone does their part.
• Know what your customers expect (24/7 phone support?) to determine if you can do this while working a day job.

Case #4: PC Desktop Cleaner

Contributor

Javier Rojas Goñi.

The product

PC Desktop Cleaner. Simple software that cleans your desktop and archives your files.

Why it was judged a commercial failure

My goal was to sell 10 units per month. I’ve sold less than 1 unit per month.

What went wrong

• I think that the product concept is not useful enough. It’s not a thing that people would pay for.
• The market exists (some people buy) but it’s too little or difficult to reach.
• I didn’t do any market research. I just got in love with the idea and did it. Later, I’ve learnt to use “lazy instantiation marketing” and have trashed a lot of embryo projects.

Time/money invested

I think I wasted near $500 in development tools and some freelancers. Not too much.

Current product status

I’m still selling it. I’ve thought about others products, but not really decided yet.

Any regrets?

No, it was a lot of fun and I learnt lot of things. In my “day job” I own a small firm that sells software for production scheduling. I’ve learn a lot of SEO and AdWords in the DesktopCleaner project that now I’m using with great results.

Lessons learned

Go for it, maybe you win, maybe you fail, but you will grow and get tons of useful knowledge on the way.

Case #5: Smart Diary Suite

Contributor

Dennis Volodomanov.

The product

Smart Diary Suite.

Why it was judged a commercial failure

It sells and the profits cover current investments in the product, but there is little left over on top of that.

What went wrong

If I had a chance to do anything differently:

• Take it seriously from day one.
• Never stop developing and supporting.
• Invest as much as possible in marketing early on.
• Don’t stop believing in your creation.

Time/money invested

Up to this point, I have spent 13 years on Smart Diary Suite and a lot of money went into buying hardware, software, hosting, marketing, etc… All of that money came from my day job, but at this point SDS has recovered all of that back and is now making a small profit. The actual amount is hard to calculate (over the 13 year span), but we would be talking in tens of thousands of US dollars.

Current product status

For a while it may have seemed like SDS is not going to be successful, but that’s probably my fault – I stopped believing for a little while. Now I am back, starting again and this time I’ll make sure it doesn’t fail.

Any regrets?

I do not regret doing it. I regret allowing myself to stop working on it, basically bailing out on it for a while – that is my biggest mistake.

Lessons learned

If you want a successful product – believe in it and let others know that you believe in it.

Case #6: Highlighter

Contributor

Mike Sutton.

The product

Highlighter. A utility to print neatly formatted, syntax highlighted source code listings.

Why it was judged a commercial failure

I earnt a grand total of £442.52 (about $700 in todays money) in just over two years, so I guess it paid for itself if you exclude my time.

What went wrong

Since it was my first product and I was very green about both marketing and product development. I would suggest the following would have made things better:

• Get feedback from potential users about the product (eg from the ASP forums). Some parts of the program where probably too option heavy and geeky.
• Diversify. If people didn’t want to print fancy listings, maybe they would have wanted them formatted in HTML.
• Better marketing. I’m not sure this would have saved it, but all I knew in those days was uploading to shareware sites. I never even sent a press release.

I figure it failed simply because it was a product nobody wanted. Actually, more importantly than that,, it was a product *I* didn’t want to use, but it developed from a larger product I was working on, on the assumption I could earn some money on the side from part of the code.  Since then I’ve stuck to products which I’ve actually wanted to use myself. There’s a lot to be said for dogfooding, not just for debugging, but for knowing where the pain points are and what extra features could be added.

Time/money invested

I would guess a couple of months of evening/weekend development time. Financially there was little spent, except that I offered the option of a printed manual and CD for an extra charge. One customer took me up on the offer, so I had to get 100 manuals printed and 99 of them went in the bin.

Current product status

I moved on to another product which has sold over £50,000 and a third which has earnt even more than that. Not enough to retire on but considering I only do this part time it must work out at a great hourly rate. There’s a lot to be said for not giving up…

Any regrets?

Nope. I figure every failure in life teaches you valuable lessons. Of course if I’d made a large financial investment I may feel differently, but that’s one of the big advantages of software over physical product sales.

Lessons learned

Just to reiterate – develop something which you find useful, instead of second guessing others.

Case #7: R10Clean

Contributor

Steve Cholerton.

The product

R10Clean. A data cleaning and manipulation tool.

Why it was judged a commercial failure

In the 18 months or so it’s been on the market I have sold 6. It has been £199, £99 and £19 – with no effect on sales !

What went wrong

Not sure what I did wrong ?  The product is maybe too techie ?

Time/money invested

No effect financially as at the time I was in a strong financial position.

Current product status

I still have it for sale but do not market it at all. I have other products.

Any regrets?

I don’t regret it as it saved me a ton of time when I was working with legacy databases a lot, as a commercial product it has been raved about (once!) and received a good review from the Kleper report, but has failed totally.

Lessons learned

Advice to others ?  Just because you need it personally, don’t assume the rest of the world does too.

Case #8: nBinder

Contributor

Boghiu Andrei.

The product

nBinder, packs multiple files into a stand alone executable with over 50 advanced output and file unpack options, conditional run and commands.

Why it was judged a commercial failure

It was the first product I began selling. It sold to 300+ customers in 4 years. But for about a year the sales began to go down and have finally stopped completely.

What went wrong

• The biggest problem was that because it was a packer intended for people that wanted to pack their products (software or games) into a single package (compressed and encrypted) many have used it for creating malware by binding malware files to legit files and then distributing the output so it isn’t detected by antivrus software (although it would be detected at runtime). Because of this I had lots of problems with antivirus companies that flagged files create with nBinder as malware. This was of course affecting legit users as their files would be falsely marked as malware. I used virustotal.com to see which antivirus detected it and contacted the antivirus manufacturer as soon as I detected the problem. In most cases they would remove it from their definitions. But it was an uphill battle because it would appear again in a matter of weeks. Some small AV companies didn’t event bother to reply to my emails to fix the problem. Others were using heuristics to flag files create with my applications and AV developers were reluctant to whitelist files created with nBinder. You can imagine it that it was enough for an AV such as Kaspersky or Norton to pick my files as malware for a day and customers would be affected and not use my product any more, especially that it took about 3 days for AVs to remove the false positive.
• Infrequent updates. Due to lack of time I only updated the product once or twice a year and this affected the product a lot.
• No marketing. I decided that I didn’t want to invest money in marketing so, except for a short AdWords campaign, I invested no money in marketing.
• My decision to develop 3 products instead of concentrating on one or two affected development time and quality. I have worked on 3 products simultaneously instead of concentrating on making a single good one. The reason I worked on 3 is because I enjoyed developing different software in different categories. I didn’t start this for money but for the fun of development.

Time/money invested

I invested almost no money (except for hosting costs). Time invested I can’t really say exactly, but not too much as I only worked on nBinder in short bursts like 6 hours a day for a week or so before releases.

Current product status

Still for sale. My other products are:

• nCleaner – a free system cleaner that has gone quite well (over 2 million downloads).
• nMacro – an automation tool that has seen some limited success (bought by over 100 customers in a year or so).

Any regrets?

It’s not a total failure as I did make some money out of it with no investment, so I don’t regret starting it, but it could have been much better.

Lessons learned

Words of advice for others trying to make money from software development:

• Study the market and the current trends very well.
• Before deciding to take on large competition make sure you have something better (at least from one point of view) than the competition ( for example you might not have the same features but you have a better GUI and general presentation).
• Do not get scared of an overly populated market segment. For example with nBinder I picked a segment with very little competition but also few possible users and the results were not so great (I didn’t have many users). With nCleaner I went head-to-head with lots of already established products but also the market is very big. Although nCleaner is free it has had the most success because there are so many potential users (anyone with a PC actually), so it had over 2 millions downloads and I still receive lots of mails regarding it, even if the last update was in 2007. So it is possible to have success in a market with lots of competition with no investment but it’s hard to reach the level of more established products.

Case #9: Net-Herald

Contributor

Torsten Uhlmann.

The product

Net-Herald – a monitoring application for water supply companies. It was a complex client server application that would receive monitoring data from specialized hardware and store that data inside a SQL database.  The client displays that data in different graphs, provides printable reports or sends alarm messages via SMS if a monitored value is not within its specified limits.

I developed Net-Herald as a perfect fit for that specialized hardware that is provided by a local manufacturer. That way, so I hoped, I could profit from their sales leads and would find a smoother way into these water supply companies. The downside of course, was that my software would only work with their hardware.

Why it was judged a commercial failure

I sold a first license fairly soon after I had a sellable product, although it took the customer nearly a year until they finally bought. But since then I sold only one more license within the last 4 years or so.

What went wrong

• I didn’t do my own marketing and the hardware guys weren’t really concerned with selling my software.
• Water management companies have a terribly long sales cycle. Other vendors monitoring applications usually cost tens of thousands and are geared toward large suppliers. Whenever a supplier buys into such a product he is unlikely to change within the next decade or more. I tried to position my software towards small suppliers but even then most of them were already locked into another vendor’s solution.
• My software only worked with a specific hardware. That narrowed the marked down substantially.
• In the end the software became too complex for one poor mortal to maintain. Because the software didn’t produce any substantial income I had to stop adding new features which would make it attractive for more prospective clients.
• This kind of software is not sold over the Internet. Rather it needs very active sales people that nurture clients over a rather long period of time.
• All these facts indicate that software like this should not be developed by a one man show.

Time/money invested

The development time for the first sellable version was maybe about 9 months. I didn’t have a job income at that time, but got funding due to government support for small start-up businesses. So I didn’t drain our family’s personal finances. But I did of course invest a great deal of time and sweat.

Current product status

Now, I have drawn a line and stopped active development of Net-Herald. I still do some custom extensions for my first clients. But I no longer market the software. I have instead focused on my consulting services. I also try to learn developing and selling software with my cross-platform drag and drop product Simidude.

Any regrets?

I didn’t succeed yet selling my own software (which is still my goal) but I do not regret doing it. I developed Net-Herald using (Java) technologies that now give me leverage at my consulting gigs. All in all it was a heavy ride. But it was fun and I would do it again.

Lessons learned

• My biggest mistake was the lack of market analysis. I trusted the word of the hardware manufacturer without verification.
• I have written more about the above and some other failures on my blog.

Case #10: HabitShaper

Contributor

Adriano Ferrari.

The product

HabitShaper – set and track daily targets for your goals (weight loss, quit smoking, jogging, writing, etc…).

Why it was judged a commercial failure

I sold a few copies, but not enough to make back the time I invested in it and my conversion numbers and traffic are below average.

What went wrong

• Did not do enough pre-production research (talking to customers, etc).
• Did not do a large enough beta to make up for lack of initial research.
• Ignored gut-feeling that my product is better suited to being web-based and multi-platform (incl. mobile).
• Did EVERYTHING myself (logo, web design, video, software, AdWords, etc).

Time/money invested

I worked on it two years, part-time, while doing Masters/PhD in Physics. It had no impact on my finances (very little money invested) or circumstances.

Current product status

I am relaunching as a web-based product this summer.

Any regrets?

Not in the least! I learned about as much from making HabitShaper as I have from my MSc thesis and PhD work.

Lessons learned

• Most important: PAPER prototypes, minimum viable product, and iterate.
• Don’t be afraid to launch early.
• Launch a little bigger than you’d expect (it’s harder to find those initial customers than you think).
• Don’t be afraid to change directions, especially early on.
• Doing things yourself is a great learning experience, but if you want to get your product out to customers as fast as possible, don’t be afraid to invest money and outsource your weaknesses.

Case #11: BPL

Contributor

Jim Lawless.

The product

BPL – Batch Programming Language Interpreter.

Why it was judged a commercial failure

I sold about 10 copies.

What went wrong

• I didn’t really do enough research to find out if the target market was in existence. I was hoping that network admins and support staff members would find it easier to use than batch files and less complicated than any of the free scripting language options available. So, I just rushed to get the MVP (Minimum Viable Product) out the door.
• I never did provide a compiler that would build a stand-alone EXE. I think that might have met with more success.
• I didn’t do much as far as advertising the existence of the product.

Time/money invested

I only spent a few weeks coding and documenting it in my spare time. Support issues sometimes took a whole evening, but nothing major. It did not have any impact on my finances as I had invested nothing but my time.

Current product status

I will still address support issues with this product for registered users, but I don’t actively sell it. I’ve open-sourced the program and it still really isn’t seeing heavy use.

I was more successful with other products. I have a few retired products that saw some good bulk-purchase deals ( command-line DUN HangUp, command-line scheduler ) and I still sell the following (for Windows):

• MailSend – Command-line SMTP mailer.
• MailGrab – Command-line POP3 reader.
• CMD2EXE – Packages up a batch file into an EXE.
• ScreenKap – Command-line screen capture.

All of the above still bring in a modest passive income.

Any regrets?

Not at all. “Nothing ventured,…”.

Lessons learned

Had I not attempted to bring the BPL product to life, I might still be sitting here wondering “what if?” I think it was very beneficial for me to invest the time to try out this idea.

Case #12: Anonymous

Contributor

Anonymous.

The product

A time tracker.

Why it was judged a commercial failure

Because it is not my primary income. I have about 150 customers in one year.

What went wrong

• No marketing.
• No real thought into features.
• I don’t spend any time on it.

In my defense, the reason I do not spend much time on it is that the market became saturated with ‘me toos’ right after I released, which was quite expected. In fact, as I was looking for users, I got an email from a competitor suggesting that I don’t enter the market because they are working on the same thing! I don’t know what I would do differently. Maybe spend more time on it? I think the law of diminishing returns applies quite early in this space so I am not sure.

Time/money invested

Since inception (Nov 2008), I’ve spent close to 250 hours total. Total cash outlay was something like $500.

Current product status

I never tried to make it succeed, to be honest. It was only a learning experience for me. What I probably need now is to go all in. Quite frankly, if I double the sales for this product, I can quit all consulting work. But I really do not think it is a good idea to work on this app full time as it is too simple.

Any regrets?

Definitely not.

Lessons learned

• Do it!
• Solve a problem people know they have.
• Don’t invest too much time and money at the beginning.
• Don’t be wedded to a particular idea.
• Don’t only listen to your customers. Listen to yourself. After all, you created the idea which attracted the customers.
• Never promise a feature for a sale. I’ve never done it but the pressure is really great. My stock response is always: “While such a feature may be available in the future, I recommend that you only use current features when deciding on your purchase.”
• Do use Google to your advantage.

Case #13: ScreenRest

Contributor

Derek Pollard.

The product

Why it was judged a commercial failure

What went wrong

• Not doing market research first.
• Creating a prevention rather than solution product – people generally wait until they have a problem and then look for a solution.
• Creating a product with medical associations – the SEO and PPC competition for related keywords is prohibitive for a product with a low purchase price.

Time/money invested

Current product status

Once the product was complete and we started learning SEO it became all too apparent that organic search traffic for related keywords was going to be insufficient.  Research into PPC then revealed that the price point was too low to support purchasing medical terms. Planned features for ScreenRest have been put on hold and no further marketing is planned.  We continue to support new and existing ScreenRest customers and plan to do so for the foreseeable future. Rather than create another software product we chose to use what we had learned about marketing, copywriting and SEO to create a series of websites targeting a range of topics (often known as niche sites).  The most successful of these sites we are expanding in value and functionality to fill gaps not serviced by the competition.

Any regrets?

No.  ScreenRest succeeded in every way intended, other than commercially.  Creating it was a rewarding learning exercise that started us down a path to finding the intersection of our skills, experience and market opportunities.

Lessons learned

• Start with market research – creating a high-quality product you believe in is not enough on its own.
• Make sure you can identify a specific target market, that you can reach that market and that it is large enough to support your financial goals.

Conclusion

Analysing the above (admittedly small and self-selected sample) it is clear that by far the commonest cause of failure were:

• lack of market research
• lack of marketing

With the benefitof 20/20 hindsight it seems blindingly obvious that we should:

• spend a few days researching if a product is commercially viable before we spend months or years creating it
• put considerable effort into letting people know about the products we create

Yet, by my count, a whopping 6 out of 13 of us admitted to failing to do each of these adequately. Probably we were too busy obsessing over the features and technical issues so beloved of developers, which actually contributed to far fewer failures.

It is also noticeable that, despite the failure of these products, there are few regrets. Important lessons were learned and no-one lost their house. Many of us have gone to develop successful products and the others will be in a much stronger position if they do decide to try again.

A big thank you to everyone who ate a large slice of humble pie and submitted the above. I hope we can prevent other budding software entrepreneurs making the same mistakes. Even if you don’t succeed, you will learn a lot.

Source: Successful Software

Feel free to add your own hard-won lessons from failure in the comments below.

Related posts:

1. Software Marketing for the Software Developer

You say: “But I am a B2B Marketer…”

If you are selling B2B software you may feel inclined to follow industry standards and use a somewhat higher flying language, and throwing in some buzzwords is never wrong, right? Well, I am here to tell you that you’re wrong. The difference between B2B and B2C is mostly existing in university literature and when it comes to selling software your end users and clients are people. And people are people.

How are you talking to your customers and clients? What language are you using communicating about your software? Take a look at this video, it will perhaps set off an alarm somewhere in the back of your head – Mind Your Language!

Also check out the guy 1:18 into the video. Find out why he switched software…

In fact, I felt that the message of keeping it simple was so brilliantly conveyed by Google that I immediately sent out an email to all my support staff asking them to check out this video. I also asked them to think about this when communicating to our software buyers. To make it easy to understand for everyone. The people in this video may very well be clients of yours and mine. Think about that.

Until next time

Peter – Software Marketing Secrets

TAKE IMMEDIATE ACTION: Ask your staff to “Keep It Simple” and ask them to check out this video:
http://www.softwaremarketingsecrets.com/sell-software/mind-your-language/

Thanks goes out to C Collins (see our Software Marketing Directory / Software Marketing Blogs ) for alerting me about this video.

No related posts.

I hope you have had a chance to check out the first part in this series; Software Branding: Introduction, and have an understanding of what I mean by brand and branding. To make a long story short I am not referring to the company/product, logotype or slogan. What’s really important is the brand identity, or the associations and expectations that are connected to a brand.

There are several important reasons as to why you should work with building your brand or brands. In this article I have included 6 major reasons why it is vital to build your software brands.

The reasons are…

1) Create Repeat Clients by Brand Recognition

With a strong brand you will have bigger chances to attract clients back to you when it is time to upgrade, crosssell or upsell your products. You can read more about up-selling and cross-selling software here.

2) Competitive Advantage � Differentiate Yourself

Few products are truly unique. In most software niches there are several strong competing brands, at least in the niches that are worth existing in.

If you can do what it takes to stand out you gain credibility and competitive advantage. Your products may be chosen before the competitors solely because of your brand.

2B) Protect Yourself

Reverse engineering, copying of software products – face it, anything you can develop most likely your competitors can too, but copying a well built brand identity is far more difficult.

3) Retain Increased Sales Price

A strong brand increases the perceived value of your product and with a higher perceived value you can charge higher prices. This also means that you have a better defense against competitors trying to compete by lowering their prices.

4) Transfer Value Between Products

If you have built a strong company brand and you are launching a completely new product under a new brand you can transfer value from your other products as they are already connected to your company brand. Thus your new products can get a flying start.

5) Decrease Marketing Costs

It costs money to build a brand. It doesn’t need to cost lots but you will need to invest. But when your brand image is memorable, you can actually invest less and still trigger the impulses you want. So a stronger brand can mean a higher ROI on your marketing campaigns.

And last, but not least…

6) A strong Brand Has An Economic Value

Have you ever pondered about selling your software company in the future and perhaps work with something else? Microsoft’s brand was valued to 56.9 Billion US$ in 2006 according to Business Week. A software company on the second place of Top 100 Global brands Scoreboard.

The actual value of a brand is calculated based on: “reports from analysts at J.P. Morgan Chase, Citigroup and Morgan Stanley. Interbrand projects five years of earnings and sales for the brand. It then deducts operating costs, taxes, and a charge for the capital employed to arrive at the intangible earnings. The company strips out intangibles such as patents and management strength to assess what portion of those earnings can be attributed to the brand.”

Furthermore “the brand’s strength is assessed to determine the risk profile of those earnings forecasts. Considerations include market leadership, stability, and global reach�or the ability to cross both geographic and cultural borders. That generates a discount rate, which is applied to brand earnings to get a net present value. BusinessWeek and Interbrand believe this figure comes closest to representing a brand’s true economic worth.” (Internbrand)

When researching this article I did a quick scan to find articles on this subject and there is no end to articles covering the fact that it’s important to build brands.

But when it comes to why I should spend my time building brands I came up surprisingly short. I admit I just spent a few minutes searching, but in this time I didn’t come up with one single in-depth article on the subject.

The closest I came was comments such as brands build loyalty and drive sales. Please do comment on this post if you have any good articles on the subject. Also, please don’t hesitate to post any comments or questions you have in the matter.

Recommended reading: Interbrand and BusinessWeek Rank the Best Global Brands by Value for 2007.

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

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1. Software Branding: Introduction

Read on to find out what Cristian has to say…

Back in 2002 I joined a software start-up to work on their sales. You know the regular geek company, 7 or 8 programmers in an apartment, coding all day and doing innovative products. I bet that most (small) software companies start like that, with some technical guys developing some products, placing the products on the site then waiting for the sales to happen.

Then, the same technical guys try to make some sales things, which might not be the most efficient approach in terms of sale results (but probably better than some sale guys trying to code

If you are in this situation (technical guy trying to work on sales), then you should handle at least the following aspects in selling and marketing your software.

Chicken and egg problem in software development

Now, most technical people are very feature oriented and while working on their baby are more interested in technical challenges and innovation than in making features requested by the market. So, should you develop a product to showcase your expertise or should you implement �useless� features that are requested by the customers?

You can�t have sales without features and at some point, you can�t have features if you don�t have sales. So before you think about starting a product, define your goal; making money or features?

Features/benefits/needs

From the same �toward features� orientation, the product descriptions and presentations are a �list of features. On a more advanced level we could probably have a list of benefits.

But really you want to get to Needs. Start by thinking what needs/pains your product can or should solve. Then make sure the market hears the right message: what needs you solve and how.

Market your products through look & feel and ease of use

No matter how hard your work on marketing and selling your products, there is no better tool than the look & feel and ease of use of the product itself. From my experience I know most technical people don�t think this way, so I should make some sort of explanation. So here it is: would you buy a car that is full of gadgets but with a terrible bad handling and a nightmare look, or a nice looking one, easy to drive and with some gadgets?

Listen to your customers

If you decided that you want to actually have a successful selling product and not just features, you need to start listening to your customers. Because they are the one that pay your work, have a pain than need solved and really matter at the end.

The best way to market your product is to start from the customer. Hear his pains and translate them into features. Make them nice and easy to use. Then half of your marketing is done. What do you think?

Care for some more articles on marketing and selling your products? We have some more advices on how to sell software online and offline (http://www.avangate.com/articles/software-business )

Cristian Dorobantescu has been involved in international software sales since 2002, with a special interest for online sales. Currently the Avangate Affiliate Network Coordinator, he has previously worked on distribution channel development and online sales for international software companies.

Related posts:

1. Sell More Software Online – 10 Tips
2. Viral Software Marketing � the �Callen Virus�
3. Competing With Price

But the visitors aren’t really converting into buyers, at least not in any satisfactory numbers. Maybe 95% are leaving your website without taking any action…

So how do you know you are doing a good job?

Read on and find out how you can benchmark your conversion rates…

Digital River is the world’s largest provider of e-commerce solutions for software publishers, currently managing half of the digital downloads for the software market (according to themselves.)

A daughter company, Fireclick provides a service that you should check out, a software conversion benchmark index.

According to Fireclick you should have a conversion rate about 3.5 to four percent today, and as this is based on such a large part of the market the numbers give good guidelines of what kind of conversion rate you should have.

I would be hesitant to share my numbers with Fireclick, but the overview is free and you can check conversion rates for a full year back in time.

We have noticed that many different factors play a part in the conversion numbers. For example when you are launching a new major version of your software and are targeting previous clients you should aim for numbers in the range of 10% – 40%.

Among other factors you should take into consideration are:

• Competition
• Price levels
• Niche
• How well-known brand you have (company and product)
• Yearly fluctuations
• Traffic sources
• Sales cycle
• Product-/Upgrade launch

I will go into more depths on some of these factors in future blog posts.

If you are interested in improving your online software sales, take a look at my previous blog post on how to sell more software online.

We also provide a service on how to improve conversion on software publishers websites and we are currently looking for reference clients. You can contact me if you would like to know more about this service.

Until next time

Peter Gillberg – Software Marketing Secrets

Related posts:

1. Sell More Software Online – 10 Tips
2. Help Prospects Forward In The Software Sales Cycle
3. Making the BIG Sales

How, you may ask…

Introducing the Software Upsell

More on that in a few moments, but first a little background.

Wikipedia defines Upsell or Up-selling as: “Up-selling is a sales technique whereby a salesman attempts to have the consumer purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Up-selling usually involves marketing more profitable services or products, but up-selling can also be simply exposing the customer to other options he or she may not have considered previously.”

Starbucks call their smaller size Tall and the up-sales Grande and Venti. Example of up-selling in the software industry would be to sell a more advanced version of the same software, a bundle with another software title, the software in a box as well as downloadable, a service agreement and so on.

How to Upsell Software

How do you go about it? It’s easy. At the time of purchase you simply offer your clients a more valuable deal. By making this offer interesting to the client you can easily convert 60% or more to go for the Upsell.

Upselling was perhaps not invented by the software industry but not many industries can match the creative ways software marketers has introduced the Software Upsell.

And if you’re not upselling your product you are definitely leaving money on the table. Start now…

Ways to Upsell Software

I have come across many different ways of upselling software, here are a few we and partners are currently utilizing

• Add a (or several) Premium version(s) of your software (Professional, Deluxe, Server, Technician, Plus…)
• Add a Support Agreement
• Add a Multi license option
• Add a Box, Manual to the order
• Add a Guarantee to access the software
• Add a related software product
• Add an option to lock in future upgrades to lower price
• Add express shipping options
• Offer Software Upgrades
• Offer Add-ons to your product

You should offer your clients as many of these as possible.

The Upsell should be optional. Don’t force your clients into at as it will not be appreciated. Some software companies don’t include any support with their products, it has to be purchased as an additional service. I don’t think I need to tell you how their clients feel about this.

Good luck upselling!

Peter – Software Marketing Secrets

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

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1. Competing With Price
2. Sell More Software Online – 10 Tips
3. Six Reasons Why You Should Build Brands

Brad Callen is a software creator and software marketer extraordinaire. He has just unleashed a new virus upon the world

Cough, cough. Oh, I think I just got the �Callen Virus��

In 2004 Brad Callen launched SEO Elite, a software targeting Search Engine Optimizers. It made a huge success.

The SEO Elite website is currently ranked the 4,611th most visited website on the Internet (according to Alexa ranking). At the end of 2005 he released another title – KeywordElite. It became an instant success and has sold extremely well.

Brad Callen is now launching a new series of 3 software titles under one brand – IMWishlist or Internet Market Wish List. The titles are Directory Submitter, Article Submitter and a third, yet to be revealed title.

All software products are aimed at the online marketing community. (Yes, I have the virus too � the links above are affiliate links.)

In this series of launches, Brad is using a series of very interesting viral components to spread the software like wildfire.

Viral Software Marketing

The three software titles are all released in two separate editions. A free version with less features, and a “Gold” paid version.

The free version is of tremendous value to the internet marketing community so Brad has no problem motivating people to download the software, and to have people promoting it for him.

In fact IMWishlist.com hit almost the 1,000 most visited website in the world just a few days ago.

The Viral Marketing Components

What first caught my eye is that IMWishlist viral components are so incredibly well worked out.

A few of the components that make the message viral are:

• A well developed version is given out free of charge
• When somebody that you have sent the free version buys the Gold version, you receive 75% commission
• Everything is done for you, you get step-by-step marketing advice
• Instant setup, when downloading the software you are also instantly and effortlessly set up as an affiliate (carrier of the Callen virus)

This is how it works: You somehow get word of one of the titles, for example Article Submitter. You go to the website, download the software for free. You are automatically signed up as an affiliate. All you need is a clickbank account (also free and easy to set up). You can now spread the word about the �excellent and free software�, giving value to for example your own list. You then get 75% commission on anyone upgrading to the paid version. And so it goes on (and on…)

The Callen Virus Comes In Many Forms

If you are a serious affiliate marketer you also get an incredible amount of already completely pre-made messages for the various ways of spreading the message. In fact, I have never seen such an extensive amount of material shared by any software publisher.

The material includes: Affilitate links, text links, audio links, email copy, signature ads, banners, articles, pre-made blog reviews, ezine ads, top sponsor ads, Google adwords and instant buzz ads.

All the material is well thought out. Even the absolute beginners get complete step-by-step instructions.

For example 8 different professionally designed banner ads, two long articles, already prepared blog reviews, (This one is not one of those ).

Lists of ezines where you could place the ad. List of marketing forums where it would be suitable to include posts and so on. Go and see the complete list of ways that the Callen Virus will display itself. Observe – you will need to enter a clickbank affiliate id to see all the information.

And all material of course automatically include your affiliate links.

As a professional software marketing Doctor I can only conclude � there is no stopping the Callen Virus…

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

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1. Software Marketing for the Software Developer

Here are ten fast action steps you can take to greatly improve your online conversion rate (turn visitors into software buyers.)

1) Include Professional looking Box Shot of your product. Even if you are selling downloadable products you should display a box shot of your product.

2) Include a short Video presenting your product for suspects early in the purchase process. Not everyone will want to download and install a trial version so this is an easy way to present your product benefits. We will introduce a service shortly that can help you with this. More about using Video

3) Offer trials version of your software, but collect emails when offering them and follow up with an auto responder. The average number of contacts to close a sale is seven, so make sure you follow up diligently. Don’t request too much information up front or you will lose prospects.

4) Offer Screen shots of your product in action. This is a quick way to explain the features and benefits of your software early in the sales cycle.

5) Set up individual landing pages for different products. Don’t drive your clients to your homepage, but instead to specific pages featuring your products, or better yet, your product benefits or even product target groups.

6) Set up a blog and post news and specific features of your product. An excellent way to feature individual benefits and inform your client base about product news and releases.

7) Even if you are trying to drive online sales, include a clearly visible phone number. Not many people will call, but it helps that the prospects know they can reach you if they need to.

Make sure your product page has a clear call to action. If your goal is to make a sale, the buy button should be the most eye-attracting element of your page.

9) Offer testimonials from previous customers. Third party endorsements sell your product better than you ever could. Choose your testimonials carefully so they address the benefits you want to promote. If you can include pictures of your customers or even video that will drive sales even further.

10. Make sure your check out process clearly show the number of steps and what will happen next. Many sales are lost in the checkout process.

One website that does almost everything right is SalesForce. The only thing that bugs me is their phone number 1-800-NO-SOFTWARE. They call themselves “CRM Software Leader” and on the other hand they say “no software”. Anyone care to explain that to me

The list above is part of an Online Software Sales System we have developed to increase conversion rates for software publishers and developers selling software online. This system includes over 100 action points that will help you increase your online software sales. The system covers both online advertisement campaigns, landing page optimization, checkout optimization as well as steps you can take in your overall strategy to increase software sales.

You can contact me directly for more details about our Online Software Sales System.

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

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1. Benchmark Online Software Sales
2. Google Website Optimizer Beta Tester
3. Software Upselling

To say that the average B2B software buyer is in a similar situation – equally pressed for time is an understatement. So how do you help him forward through the sales cycle?

When you have caught his attention you have a couple of ways to do this. The most normal tactics are talking about your product features, showing the product by screenshots and offering a trial version.

All of these marketing tactics are great, but there is one measurement that is severely underutilized and that is presenting an online video ad of your product.

You may argue that a video isn’t necessary because your prospect get a much better look at a product by running a trial version.

That’s correct, but the often overlooked point is where your prospect is in the sales cycle. If your product has just caught his attention, he is early in the cycle you will have a hard time to convince him to download, install and try your software.

You can peak the interest by easy accessible screenshots and describe the features. And the key word this early in the buying process really is “easy accessible”. You have to make it easy and fast for the prospect to understand the advantages and problem solving features of your product.

DoubleClick’s “Video Ad Benchmarks” study examined over 300 online video ad campaigns for over 130 advertisers in 2006.

Among the important findings:

• A higher ad interaction

The online video ads resulted in some kind of interaction in about 8% of the cases, compare this to the normal interaction with a standard jpg or gif image which is about 0.1%

• Longer viewing

The online video ads played on average 2/3 of their full time (about 20 seconds for a 30 second spot).

• The ads had a higher CTR (Click Through Rate)

The videos had a CTR of 0.4% – 0.74%, compare to image ads 0.10% – 0.15%.

So if you are interested in driving your suspects into prospects into buyers, you should definitely look into online video ads.

Expensive you say…

No, not any longer and I will tell you how next week.

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

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1. The Future: Advertise Your Software with Online Video Ads
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3. Sell More Software Online – 10 Tips

I recently had a conversation with one of our partners, Craig Justice, Director of Worldwide Channel Sales at SmartDraw, about pricing strategies. Our partner doesn’t use price to compete with and I fully agree with this strategy. “We have a unique product; there’s no need for us to compete on price,”

Justice also added “Our target customer is the ‘business user’ — if the customer needs our easy to use graphics solution, they will purchase it. Price is rarely an issue in the purchase decision.”

Make A Quick Buck

The possibilities of increasing number of sales when lowering your prices are obvious, but what happens in the long run?

It is very likely that the value of your product will be perceived at the price you set. The reason for this is that software products are generally very difficult to value. This is because there are so many factors determining the perceived value of your product such as your brand, offered support, product features, product image, competitor prices, your target market, word-of-mouth and many other factors.

I would even go as far as to say that they have a different value to each client based on how, what for and how often the products are used.

Price = Perceived Value

This all means that the price becomes a very important factor in setting the perceived value in the clients mind. And by lowering your price you then lower the perceived value of your product.

So if you have a chance to run a campaign which adds to the perceived value instead of lowering your price you should definitely take the high road. (I will cover ways to add value to your software product in future articles.)

It is also important that you extend these limitations of price competition to your resellers, affiliates and other partners because their pricing strategies and tactics also influence the perceived value of your product directly.

Limited Time Offer

If you still choose to lower prices, you should always try to accompany the offer with a reason why and limit the offer to a shorter period of time. If done correctly you will have a client stating “I got this product valued at $49.00 for $39.00, what a deal!” And your perceived value is still intact.

That said, there are occasions where a lower-price strategy can be interesting, for example if you have the opportunity to tie the client closer to you by a maintenance agreement. But that’s for another time.

You may reprint or distribute this article as long as you leave the content and this information intact. This Article was written by Peter Gillberg and published at http://www.SoftwareMarketingSecrets.com

Related posts:

1. Software Upselling
2. Six Reasons Why You Should Build Brands
3. Making the BIG Sales