The Rules Have Changed for the Software Industry

Advertising, Marketing, Sales, Customer Support: they’re all different now.

A quite tapping at the doors of industry revealed a small, cute, Trojan bunny-rabbit named e-mail. E-mail was friendly, helpful, courteous and was let in for the night.

By the next morning, e-mail had produced an off-spring.
Gopher had arrived on the scene without much more
noise than a slight “ftp!” As the information systems
department endeavored in its dutiful way to  provide for
these creatures, it was blind-sided by a horde of marketing
managers fostering a colossal craving for something called
the World Wide Web.

From an article in CIO Magazine by Jim Sterne

The question is not if the rules have changed, but how far and how fast? For the software industry, the answers are very, and very. Every time you turn around your competitors, strategic allies and complete strangers are offering more forms of communication and more services via the Net that you can count. It’s time to rethink what it means to be in the software business.

To lend a little structure to this madness, I divide the selling game into a series of logical steps; advertising, marketing, closing, customer service, and upgrade sales.

Showing Up on Radar

Advertising is the fine art of shouting your name loud enough and long enough that those who might buy your product recognize there is a product to buy. The most frequently run television ad, the most garish magazine ad, or the most clamorous trade show booth might do that for you. But the Web is a different place.

Send out your e-mail message to 50 million users and you’ll never sell code on this planet again. Web sites live and breath by Pull. Putting up a home page does not get your message to the masses, it makes if available to the masses.

There are, however three ways to go to advertise your software on the Net; money, smarts, and the old broadcast model using new, Push technology. If you’re Microsoft it makes sense to spend $6 million a year plastering your name all over the Web. Banners here and banners there are the model that makes brands so powerful. But if you’re disinclined to compete with Microsoft, AT&T, and Netscape for banner space, think targeting.

Besides being my company’s domain name, targeting is something the Web does better than any other marketing medium known to man. If you can properly identify your most likely prospects then you can find the most likely places they might frequent. An intentional banner placement on an intentional site targeting an intentional audience will cost infinitely less and produce significantly better results. This approach needn’t be limited to banners on pages. It also applies to new Push technologies gaining attention on the Web.

Internet Push isn’t new, but it is getting more sophisticated, and of more and more interest to marketers. Solicited Push started simply as Web site owners invited visitors to subscribe to newsletters. Now, companies like PointCast, BackWeb and Marimba offer a means of sending the latest updates of traffic, weather and sports (not to mention the latest on the computer industry) directly to the user, without them having to go to the site. Think e-mail list vs. newsgroup. But now the content is full-Web-graphic.

As these new information-flow tools were arriving on the Internet scene, the subscription model was taking a licking. It was becoming obvious that media sites were only going to survive if they were advertising supported. Marketers were quick to see the benefits of Pushing their message to the masses. Coupled with careful targeting, the Push approach makes economic sense.


Once you’ve successfully hit prospective customers over the head to get their attention and get them to your Web site, it’s time to change how you think about marketing. Don’t think seminars. Don’t think CD-ROM’s. Don’t think sending salespeople into the field for weeks on end to proselytize your products. Think instead about self-learning and the Internet gift culture.

When I am ready, willing and able to absorb information about your product is the time you want a salesperson to be in front of me. But humans are far more fickle than that. If I’m ready to learn now, I want the information NOW. I don’t want to wait a week for the brochure and two weeks for the sales presentation. Your Web site offers me all of the knowledge of your company and it’s available at any time, from any place.

I’m the first person asleep in a sales presentation and the last one awake when I’m teaching myself. Sales people drone on and on about the founder of the company and the fabulous customers you have. I just want to know if the product can solve my problem. It’s not just that I can do my own studying at ten o’clock at night, but I can do it when the impulse hits. That’s the point at which I am most receptive. Additionally, I can learn as much or as little as I wish, and satisfy my curiosity at my own pace. The result is a much higher rate of information acquisition and retention. And face it, if I don’t understand or remember your product, I’m not likely to buy it.

But a Web site that is simply full of brochures and datasheets is missing an important competitive opportunity; creating goodwill among would-be buyers.

Much like the pioneers of the old West, the engineers who first created the Internet were more than willing to help each other in order to preserve and advance the whole. The very nature of the technology created a gift culture. This gift culture permeates the Web and puts the burden on the site developer to offer something of value to the prospective buyer.

One thing your company can offer is the gift of knowledge. Your team knows a great deal about your industry. Perhaps you’ve commissioned research and made interesting  discoveries. Maybe you have an opinionated Chief Technology Officer who would like a forum. Divulge company secrets? Tip your hand vis-a-vis strategic plans? Not at all. However, sharing what you know can set you apart as a voice of reason, a font of knowledge, and a leader in your niche.

What else can a software company offer that might be of value? How about software? You might take a giant leap like Netscape and simply give your product away. It’s a proven method for gaining market share; just ask the makers of Doom. But maybe you can think of another approach that offers a look at your bits without having to atomize your cash flow. Try something like Cognos.

Cognos makes PowerPlay, a multidimensional, business analysis software package which will create analyzable data sets from 10 million records. During the World Series and again during the SuperBowl, Cognos offered a free, downloadable PC version of their software package along with a database packed full of game and player statistics for slicing and dicing. This combination of tying a popular event in with their software made for a smashing marketing success. In a few months time they had electronically shipped over 25,000 copies of their software, many of which turned into sales. Today they offer PowerPlay with an IDC Software Research Group database of worldwide packaged software revenues for more than 1,200 software vendors. Maybe there’s a way to get people to try your software.

Whatever you do on your site, your first responsibility is to offer clear, concise and complete information. Numerous studies show that people looking at business Web sites are not there to be entertained, they’re there to research product information. Telling them what your software does and why it’s great, but leaving out what platforms it runs on, what packages it’s compatible with and what the pricing structure looks like forces them to call. If you want people to be able to make a buying decision, you have to give them enough information. Then you have to give them the means to complete the transaction.

Making the Sale

This is the moment of truth. This is where the rubber meets the road, where the wheat is separated from the chaff, where the code is thrown at the compiler. How hard do you make it to buy your products? Does your site entice people down the path of least resistance only to display the corporate phone number? You’ve missed the mark.

Bear in mind that time spent in front of a computer is much more precious than time spent in front of the television or the newspaper. This is active time, research time, time when the Web site visitor is engaged in the activity. To pull the rug out from under them at the last minute is like your first paycheck before you knew they were going to take out taxes. Oh, you wanted the check anyway, but the experience left a bad taste in your mouth and that disappointed feeling comes back with every check.

Complete the transaction. If you cannot ship direct, take the orders anyway and pass them along to your dealers in rotation. Don’t assume you can only sell consumer products on the Web. Complex business applications or tools have add-ons, upgrades, and new versions that current customers should be able to buy without engaging in a human-based sales-cycle.

At the critical point of sale, remember the first rule of retail: when the customer wants to give you money, make it as simple and as quick as possible. For the sake of your customers, go to and buy a book. See how straightforward the process can be. explains every step and reassures you all along the way. Buying over the Net is not brainless, but it can be painless.

The Customer Service Sensation

You want to offer the best marketing on the Internet? You want your site to increase your sales? Start with customer service. While this is true for most companies, it is critical for software firms. Superior customer service has often been the deciding factor in a sales race and frequently been the overriding differentiator promoted by software vendors.

Software is never used in a vacuum. Software is never completely finished. Software is never completely understood. Applications you use on a daily basis frequently make you scratch your head. Why did it do that? How do I make it do this? How come it decided to quit in the middle? As Mike Chard, director of business planning for Olivetti North America pointed out in the February “Culpepper Letter”, the software business is about services.

The Web might be a pretty good place for advertising. It may be a very good place for marketing. It might be a painless way to make sales. But the Internet is the best medium for customer service since doctors made house calls.

All Web advice about sales and marketing applies to customer service and support as well. Instant availability from anywhere at anytime, astonishing depth of information, Web sites that remember visitors from one session to the next. But then there’s the bonus of the computer itself.

Your server can help your clients understand, use, and benefit from your packages. Computers have been helping your customer service people keep track of problem reports and trouble tickets. Now they can directly help distressed customers. Let your customers dig into that database and dig themselves out of trouble. Microsoft has a Knowledgebase with how many product or technology categories to choose from? Then, there are more than two dozen categories within each product area. Not good enough? Try entering a keyword.

Intersolv lets anybody who’s interested review questions their customers have about using their products. It’s a gutsy move. But the company thinks the benefits of customer self-service outweigh the risks of competitive dumpster diving. People want to get their problems solved, not memorize passwords.

Beth Martinko, Director, North American Customer Support says it’s working. “Even though this is an area rife for abuse by competitors we felt it was better to be forthcoming than to sweep the dirt under the carpet. If users can look up problems and get the answers faster, and we can give the answers cheaper, it becomes a no-brainer.” Customers with passwords can also enter trouble tickets and follow their progress through the problem solving process.

Customers know that you keep information about them in computers. They know that your World Wide Web site is on a computer. They know that computers can talk to each other. The expectation is that your computers can talk to each other, so customers should be able to access their account information through your Web sever.

They want to know if their tapes and manuals have shipped yet. They need to know when their backorders will be filled. They want to track their purchases across multiple divisions. They want to know where they stand according to your accounts receivable department. They will soon start expecting your Web site to be the electronic gateway to your company. Try to stay a step ahead of them.

When to Begin

The tools for creating powerful Web sites are in abundance these days. The Web developer who builds a site today can do it faster, better and cheaper than a year ago. But that developer would have missed out on some very important lessons in how to conduct electronic commerce. In other words: wait no more. Pop this to the top of your stack and get on with it today.

By The Way

The most important bit of advice I can offer concerns e-mail. While you invite consultants such as myself in to help lay out an Internet marketing strategy, be sure you are taking a proactive role in teaching your entire company about the importance of responding to e-mail in a hurry. You want to build customer loyalty? You want to impress prospects? You want to become known as a company that gets things done? Answer your e-mail.

Class dismissed.