TryBeta.com

For the past year or so I have been reader of Shareware Promotion’s Software Marketing blog. Although I have never used their services, the content and information that Dave Collins writes about has always been very interesting and extremely useful.

Recently he has stopped posting to his blog and instead moved all of his future content, and insight, to a monthly newsletter. I have been a subscriber of his newsletter for a few months now and can highly recommend it to any software developer.

The newsletter talks a lot about Google adwords, search engine optimization, and general marketing advice.

What caught my attention in last months issue was not necessarily what he spoke about, but how he used his advice in the article he wrote. The article was about seeing the world through the eyes of your customers. Knowing what they need and delivering it to them, without the extra fluff. When you can identify what your customers need, and what problem you are solving, you won’t have to overwhelm them with so much information about every feature or service you offer.

The newsletter is free, so there is no reason why you shouldn’t be a subscriber.

Technorati Tags: microISV, marketing, software marketing, google adwords, shareware promotions

Forget what you may have learnt about accounting, your business does not have any costs. All you have are potential investments.

Any amount of money it takes to run your business has to be viewed as an investment, not a cost. It does not cost you to have Google Ads, post software on download.com, have a payment processor, or pay for web hosting. These are all the investments it takes to run a business and grow your money.

Expenses and costs are scary things especially for the small microISV. It’s extremely scary to take the first $500 you make and put it into a PR campaign, or spend $300 of your money on professionally designed icons. If you view these as costs, it makes it that much harder to actually get the nerve to spend the money.

Instead, look at everything you do as an investment. Firstly, for most microISVs, a major investment is in your payment processor. The reason is because when you give your payment processor 8%-15% of all sales, you have essentially made them a minority partner. However, without them, well, you just wouldn’t be making any money. So, in taking this into consideration, do they make a good minority partner? Are they worth the investment you have put into them?

Secondly, every dollar you spend must be viewed in terms of how much additional money it will generate for you. Put a value on everything your investment earns, from relationships, to good will, to any future opportunity you have just opened up.

If you truly believe you have a great product, you should not be afraid to continually invest your own money into it. Even borrow money in order to magnify your returns with other people’s cash.

Here is how to evaluate how and where to spend your money.

Quantify all possible investment decisions
How much your Google ads return is easy to see. However, how do you track how much professional icons will generate, or professionally written documentation? You can’t! You can only estimate based on what each outcome will mean to your company. Use your best guess taking into consideration your competition, the reputation you would like to build, and the tastes of your target market. Assign an actual value to everything you do.

How much money can you possible make?
With each investment you are considering, what is the best, worst and most probable outcome? If you put one dollar into Google adwords, what is the most amount of money you can make, the least amount, and the most likely amount?

If you could in no way make more than the risk free rate, (ie the rate offered by short term t-bills/GIC’s), don’t bother. Your money is better spent elsewhere.

Don’t forget about long-term payoffs. Many people are very risk averse. If its not a sure thing it can get real scary. Think long-term! Investing in a good customer support system means easier management and better customer relationships for years to come. How much is that worth to you?

Remember the indirect consequences as well. How will buying an ad in a magazine payoff in addition to sales? You get to build a relationship with the magazine so they will possibly review your software, and you build credibility in the eyes of your customers for your company.

Evaluate Alternatives
Always evaluate what else is out there. Competition improves prices and offerings. You don’t buy a mortgage from the first bank you go to. You shop around just like you should when finding any potential investment for your company. What magazine will provide the best rate of return? Even if one is not directly your target market, what would it mean if you were seen in that magazine?

You have so many options and you must get creative. Multiple ads in smaller magazines may be more profitable then one ad in a large magazine.

Keep track of ROI
Keep track of all your investment returns. Write down what you spent and for what. Then, write down how much it has returned in dollars, as well as keep notes on any non quantifiable returns.

Practice on old investments
How have previous investments paid off? How has upgrading the RAM on your computer improved your productivity? How has buying a new customer support help desk improved your response time, and in turn improved your customer retention?

It makes no sense, for any serious business to continually invest in itself if investments in other companies will provide greater future returns. Keep looking for great ways to grow your money through great investments. If you can’t, there are thousands of companies that can find a good use for your cash!

Our savings are tied up in mutual funds and invested in other companies we’ve probably never heard of. If you truly believe in your company, where are you putting your savings?*

*don’t forget to diversify:)

Technorati Tags: microISV, software developer, business, investment

When you are just starting out, getting picked up by search engines is not always so easy. Last year Google announced a sitemaps program where web site owners could submit a list of web pages, as well information about each page, to Google, which can help them index your web pages. It didn’t guarantee a listing in Google, but it could help a lot.

Over the last year they have been adding new features that give web developers more information about how their web site is represented in Google, including statistics on commonly searched terms related to the web site and any errors the Google spider encounters while crawling your site.

TechCrunch posted that yesterday, Yahoo and Microsoft announced that they will be supporting the sitemaps protocol and any other search engine can choose to support it as well. This is really good news for microISVs who have been trying to get noticed by these three search engines. My experience has shown that adding a sitemap is very beneficial and really easy to do. There is no reason why you should not have one.

I think as time goes on, the sitemaps program will be expanded with new features and more opportunities for web site owners to let search engines know about the content on their web site.

More information on Google’s web master program which includes Google Sitemaps can be found here. You can also find additional information about the sitemaps protocol at sitemaps.org.

As the developer of a sitemaps generator, if you are a Mac user and want to make a sitemap for your web site you can download RAGE Google Sitemap Automator. If you are currently a member of TryBeta, just send me an email and I will send you a free license until the end of the week.

As microISVs, especially those who are just starting out, we have one big advantage over large corporations. This advantage gives us the ability to develop and release applications that would take larger companies much longer. This advantage allows us to take risks that larger companies can not even consider. This advantage is so great that used properly, it allows us to accomplish things that no other company can. This advantage is our naiveity. Our ability to try new things, take risks, and learn more because, well, we just don’t know any better.

We can decide today to try something new simply because we can. We don’t have to worry what our boss thinks or what it will mean 5 years down the road. Our lack of experience and, in some cases, lack of knowledge about certain things pushes us to try new things without considering all of the consequences.

Large public companies have to evaluate all projects and ensure their rate of return is as much, or more, than their investors are expecting. For example, if you have purchased stock in Google you are paying 60 times their current earnings (as of the time of this post according to yahoo finance) for each share. This means you are expecting huge growth in their profits which will eventually be distributed to you in dividends or increases in the stock price. The only way to ensure growth in dividends and their stock price is by continually increasing their rate of return on their investments and making more money. Why else would you pay so much to own a share of Google? Now, how would you feel if Google announced today that instead of putting their money in creating new products, they will be putting it all into a savings account and earn 3%/year in interest? Or they decided they will go to vegas and put their 10.43 billion dollars in cash on double 0? Of course these are extreme circumstances, but the fact is that these large companies have a measure they must meet, and they better be pretty certain they can meet and surpass these expectations. You won’t see many companies take a large amount of risk without evaluating possible outcomes.

We as microISVs can use this to our advantage. We can be the ones who launch a simple site that sells each pixel for one dollar. We can decide that we will release a utility that lets users share files without concern for legal issues (not to say that this would be a good decision). We can decide that today we will try something new and so what if it fails. If it succeeds, WOW!

This does not mean that companies do not make bad decisions or try stupid ideas. What this means is that companies are required, by their investors, to provide a return on investment that will continue to attract these investors. In order to so, they must be careful to analyze everything they do.

When I released my first application I had never spoken to another developer. I had no mailing list. I hosted my web site on one of those free domain web sites. I didn’t do any market research on whether or not this product was something people needed. I didn’t even do any real beta testing (though it was a public beta). I just built it because it was fun and posted it on some software listing sites.

Seven years later I have a successful software company and am getting ready to launch an invaluable service for software developers. Looking back, I would never have released the product as it was knowing what I know now, or how much work would have to be put in to get to where I am now.

How far has your naivety taken you, and where will it lead you next?

Google has created a really easy way for web developers to optimize conversion rates on their web site.

Its currently being beta tested, but the Google Website Optimizer looks like it is going to be a really useful tool for micoISVs, or anyone for that matter, who want to test and improve conversion rates on their web site.

Web site developers place a code snippet on their web site, just like with Google Analytics. Then you can create modified versions of your landing page with different headlines, images or content. Google will then randomly display one of the modified pages to web site visitors. You will then be able to track which page provides the best conversion rates.

Selling software is not about the software, its about the service you offer and the experience you create for your users. That’s what separates commercial software from open source software.

I am a big supporter of customer focused software development. Solving the customer’s problems is what software is intended to do. If your software can’t provide the solution your users are looking for, do everything in your power to make sure you do.

When it gets tough to spend time handling support emails instead of developing software, think about all of your customers as potential sales people. Make them happy and they will spread the word about your products to friends, family, co-workers etc…

Now, some customers wont ever tell a friend about your product, but others will. Its difficult to determine which ones will end up talking about you.

For the past 7 years I have put a large focus towards helping customers as quickly and as best that I can. Here are some of the ways it has paid off;

1) A customer needed to use one of the applications provided by my company but it lacked a certain feature. I created a simple plug-in and sent it to him which provided a solution to his problem. A few weeks later a review came out about the product and the reviewer just happened to be the same guy I sent the plug-in too. The application ended up getting a great review that went out to a large user group.

2) A customer who bought our HTML editing application owned a large web site with a pretty big following. He sent in a handful of emails and surprisingly to him, we delivered prompt replies to all questions. He continues to recommend our software to his community.

3) We ask customers where they heard of us when they order. The most significant answer is friend, colleague, or co-worker followed by search engines and download listing web sites. Clearly, leaving a good experience with customers is the best form of marketing you can offer.

4) Another interesting success story can be found here.

Tips On Turning Customers Into Marketers
1) Encourage customers to spread the word
The usual tips of having a tell a friend link on your web site and an affiliate program are important. However, you have to actively seek out users who get exciting about your software. These users are the ones who provide feature requests, report bugs, and actively try to engage in any form of communication with you. If they take the time to talk to you, they are most likely excited about what you have to offer. After you provide them with top of line support, give them a coupon (try making the coupon ID their name), and tell them they can send it out to 10 of their friends for a 20% discount.

2) Take the blame for ALL mistakes
Did a bug in your software crash your customers computer or was it an error on their part? Who cares! Apologize for anything that goes wrong and offer to fix it. Tell them how important this issue is and get it fixed ASAP.

They don’t want to deal with your company anymore? Give them a refund before they get the chargeback and bad mouth your product. Never take money from a customer who can not use your software as advertised, whether or not it is your fault or theirs.

3) Understand that not all customers are as knowledgeable as you
After receiving their registration code I got an email from a customer saying that they need a new code because their keyboard could not type the zero with the diagonal line through it.

Lets face it, we are not all experts in all areas and will look inexperienced in anything we do. Understand where your customers are coming from and don’t get frustrated with any “basic” misunderstandings they may have.

If you get the same basic question over and over, there is something wrong with your software!

4) Always encourage customers to provide more feedback
Communication is the most important part of any business. You must base your decisions on what your customers need. Encourage them to continue to send feedback so that you can develop a bond that keeps them coming back to buy what you have to offer.

5) Your customers will talk about you
Your customers are talking about you, both good and bad. Don’t let anyone get away with a bad word about you.

The most important advice I have used for the past 7 years is to treat each customer as if their happiness means another sale. You never know who they will be taking too.

6) Get them involved in the planning/development
If your customer sees his or her opinions and suggestions incorporated into your software, which product do you think he is going to be sticking with and recommending to his friends?

Show your customers how much you value their opinions by taking their advice seriously. If you don’t quite agree with their suggestions, tell them why and offer alternatives.