By Jennifer Beever, CMC
New Incite Marketing Analysis and Design
When the economy
boomed in the late nineties, many software companies strayed from
their business focus as they chased opportunities to bring in additional
revenue. Companies were expanding rapidly into new markets with
new products, and many rushed to create alliances with other technology
companies. When the economy took a downturn, these companies had
to pare down and eliminate their less profitable markets and product
lines. In doing so, they have had to re-evaluate and refocus their
business strategy in order to survive in the down market. The good
news is that reevaluation and refocusing is critical to successful
marketing. This article describes six key aspects of a successful
marketing program for software companies.
Research and Validate the Strategic Direction
Great marketing is based on a solid vision, mission, and goals.
For marketing to succeed, software companies must first do their
homework, re-focus, and establish or confirm their vision, mission,
and goals. They do so by reviewing their industry, opportunities,
strengths and weaknesses, and, if necessary, by conducting market
research to validate known opportunities and to unearth new opportunities.
the target markets a software company currently serves and can serve
is essential to planning successful marketing programs. Where necessary,
software companies should research their target market demographics
and psychographics. Demographics include information about age,
gender, income, etc. of customers. Psychographics take a look at
the needs and psyche of target customers. This research should include
surveying and interviewing current as well as potential customers.
marketing research, many companies leave their salespeople out of
the process. This is a critical error, as salespeople are usually
very in tune with their prospect base and know what they need and
what messages work to communicate their solution and product or
service. When conducting a review of markets, demographics, and
psychographics, software companies should conduct an interview or
information gathering session with their salespeople to glean this
Plan for Marketing Success
Successful marketing should be planned in advance to take advantage
of several important factors. It must be targeted to those markets
that were proven in the research stage to hold the most opportunity.
A "shotgun approach" to marketing doesn't work in any
industry, let alone software. It must be integrated, resulting in
response compression, an effect where, after repeated contact with
a prospect, that individual will remember the software company's
brand over others. For example, the target prospect may receive
a direct mail piece, shortly after read an article by or about the
software company, see the ad that is being run in a trade journal
a few days later, look at the company's web site, and then decide
to call for more information.
importantly, successful marketing in the software industry utilizes
referral or testimonial marketing. According to Geoffery Moore,
author of the landmark analysis of successful high tech marketing,
Crossing the Chasm, the greatest influence on high tech buy decisions
is the testimonial or recommendation of a peer. Marketing activities
that convey success stories or testimonials include testimonial
ads, direct mail, PR that leads to articles about a case study or
success story, and video taped testimonials of customers. What this
means for software marketers is that a good deal of the marketing
effort should be allocated to listening to customers, getting their
testimonies, and publishing them. Note that when a testimonial appears
in print, the software company should have a signed release from
the customer and their company that gives them permission to print
the customer's words.
This means that
start-up software companies must get their product in the hands
of customers quickly in order to generate testimonials. This can
be accomplished through special pricing or special services provided
in return for the customer using the software in a timely manner
and providing testimonial statements. Some software companies have
carefully screened their first potential customer companies, to
help assure that there is a high probability of success with the
installation and resulting case study.
plan must tie back to business objectives, and describe what activities
are required to achieve those objectives, as well as when, how and
who will implement each activity. Marketing activities that are
typically successful for software companies that serve either broad
(horizontal) or targeted (vertical) markets are effective web sites
and PR. Marketing activities that best apply to vertical markets
include advertising, direct mail, and trade shows. These activities
(ads, mailers, and trade shows) will be more successful if a company
can advertise in a targeted trade-specific journal, mail to a targeted
list, and attend a vertical industry trade show.
Communicate the Marketing Message to the Whole Company
Great marketing today is customer-driven, and the most progressive
companies make marketing a company-wide function. It's not only
the salespeople in a software company that must convey the right
marketing message to customers, but also customer service, accounting,
consulting, and administrative personnel. Software companies need
to identify the "touch points" for customers and share
the vision, mission, goals, marketing programs and messages with
all personnel to ensure a consistent customer experience.
Execute with Excellence
Execution or implementation of the marketing plan is the most important
step to ensuring marketing success. Implementation of the plan requires
certain variables, including obtaining the resources that fit your
business, ensuring that vendors are cost-effective, and creating
response compression. Resources available to execute the marketing
plan include ad agencies, hiring internal staff, or outsourcing
marketing to consultants or other experts.
sometimes work on a fee basis, but are often compensated by advertising
commissions. Because advertising is one of the marketing activities
that should be conducted judiciously in the software industry, software
company executives must be aware of this potential conflict of interest.
has certain advantages if you can afford the full-time staff or
executive position. Many companies don't need full-time marketing
personnel on site and can work with outsource marketing firms who
typically provide senior-level personnel at a lower cost without
the overhead. With any resource, software companies should make
sure that the service-provider has hands-on experience in the software
industry and that they understand the specific company's needs.
Analyze Results for Better Decision Making
With increasingly limited marketing budgets, the ability to compare
results of different marketing activities is important. Understanding
the cost per lead and the return on investment helps software companies
choose those activities that generate more revenue and get more
bang for their marketing buck.
Once a marketing
plan is being executed and the leads are coming in, software companies
must measure results by capturing and analyzing data about the leads
that are generated. They should be able to report cost per lead,
lead conversion rate, and return on investment for each marketing
activity. Merely tracking number of leads is not enough. For example,
a software company may get thousands of leads from an advertisement
but fail to convert those leads to sales. This is valuable information,
because if the lead conversion rate is low, it could be that there
is a problem in sales performance or that the leads were unqualified.
Assess and Coach Sales Staff to Improve Performance
A great marketing plan will not get results if salespeople are under
performing. It's important to ensure that a software company's sales
personnel are performing to the best of their ability and understand
and support the marketing initiatives that are being implemented.
Getting the sales people involved in the planning process can help
ensure their understanding and support. Software companies need
to communicate marketing messages with their sales staff and audit
each individual's performance. If necessary, the company should
invest in coaching or training to help improve individual sales
Following the above six steps for marketing success doesn't have
to be expensive, but it does require time and effort on the part
of software company executives. The benefits are many. Armed with
new information from market research, software companies can refocus
and perhaps find untapped opportunities. With a written marketing
plan, software companies move into a more systematic and results-oriented
way of marketing. Timely and expert execution of the marketing plan
will get better results and, in some cases, will help the company
save money on certain marketing activities. Results must be measured
and analyzed for better marketing decision-making. Finally, the
sales staff should be trained with the new marketing materials and
programs, and their performance audited to ensure increased revenues.
is a Certified Management Consultant and MBA with 19 years experience
in sales and marketing. Jennifer spent 14 years in the ERP software
industry with such companies as Marcam (Needham, MA) and System
Software Associates of Chicago. She was Director of Marketing for
JB Systems in Woodland Hills, California, a maintenance management
software company, prior to founding her consulting practice in 1997.
For more information contact Jennifer at 818-347-4248 or firstname.lastname@example.org.