Marketing to Your Users
I am going to talk about why you should focus on your existing users and how that will help you build a sustainable business around them. I am going to assume that:
- You have studied the marketplace and your product occupies an unique space in that marketplace.
- It is well designed and does what it should.
- You have priced it at a competitive price point.
- You have it available for distribution and it is easy to access and pay for.
These are the basics that I am taking for granted for the rest of the article. I will deal with these in more detail in future articles.
You have to do it. You have to concentrate on customer acquisition when you launch version 1.0. It is expensive. Advertising is expensive. Sending PR pieces to the press is expensive. Designing a web presence is expensive. Unfortunately at version 1.0, you have to do all of it. You have to come out of the dark and shine a flashlight on your product and its unique features. You don't have an option. Just building the product is not going to work. You have to sell it. Consumers have to know about it. They must see the differentiators that you have carefully built in to make your product competitive. They have to believe it. Then they have to give you money. This is a necessary evil of doing business with a 1.0 product. Don't believe me? Try winking at a person in a dark room next time. Did you get their attention? Didn't think so.
At version 1.0 you have a mountain of a communication task in your hand. You have to make the prospective customer aware that you exist. You have to elicit interest in your product, that interest you have to transform into desire through increased information and persuasion. All of that interest is only useful if you can change it into the ultimate payoff, action. They will give you a credit card, and you will give them an intangible product called software. This is going to be expensive.
After 1.0 has been launched and you have acquired a nice little group of customers the marketing task needs to change. You need to move your focus from customer acquisition to customer retention. The first wave of customers are those who have a particular need which your product is designed to fill. These folks are aware of the need and are explicitly looking for a solution. That is why they bought your product. The next wave of customers are not as aware of their need or not as explicitly searching for the solution. Either way, they are more difficult to reach. In other words, if you continue to advertise and spend money on promotion, you are going to find it more expensive to acquire members from this next wave. You are better off switching focus and concentrating on the needs of your existing users.
Remember, it is cheaper to do business with an existing user than it is to acquire a new one. When you keep doing business with an existing user, you are effectively building a relationship. That relationship is what will help you build a sustainable software business. How does this process work?
Your existing users are the providers of your upgrade revenue stream. They are already invested in your product. They have paid you money. They have learned how to use the product. They are going to provide you upgrade revenue. They want to use the latest version of the product. In addition, they are now invested in you. They are interested in your continued success. They want you to be successful and continue improving the product they rely on.
Your costs for building version 1.0 of a product are considerable but the costs should go down with version 2.0 and further. Along with production costs, your marketing costs will go down too. You don't have to spend as much money informing customers that you exist. You are only spending money to inform them about how your product has improved. In other words, the costs of providing the upgrade should go down and the share of profit in the upgrade revenue should increase.
Marketing mavens are people whose identity is built around their expertise around a product category, and their joy at sharing information about the category to all and sundry. Every product category seems to have these folks. The stereotypical example is the older aunt who shares crochet tips. In software, this manifests itself everyday in the user forums which software companies provide. Users who are not affiliated with the company, provide helpful tips and tricks, they answer questions, they troubleshoot problems and generally act as unpaid support staff. Look at the Alfred, Scrivener or the BBEdit forums for examples.
It is your duty to turn your users into marketing mavens for your product. There is no easy way of achieving this. If you do everything I am talking about, and enjoy a healthy dose of good fortune, you will turn customers into mavens.
Self Selected Free Salespeople
Marketing mavens also play the role of salespeople. Free salespeople. The best kind. A user has no financial interest in advocating for your product. Their recommendations carry more weight because of that and prospective users get that. Look at the number of times on Twitter that Brett Terpstra is asked about a good companion app to NVAlt for iOS. He recommends 1Writer. I am sure that it has helped make 1Writer a viable product for the developer.
Reduce Advertising Costs
Look at TextExpander. It costs $44.95. It has competition, Typinator costs €24.99. Another competitor, called aText costs $4.99. TextExpander has the advantage of having an iOS counterpart which makes it possible to use the same snippets in both platforms. But on the Mac, the competitors are full-featured and competitive, yet TextExpander is the market leader. They are helped by Brett Terpstra's TextExpander groups, MacSparky's TextExpander Snippets, and Dr. Drangs musings on TextExpander. TextExpander has managed to create a mass of users who are absolutely devoted to the product and share their knowledge and expertise with the world. One effect of this user fascination with TextExpander is lower advertising costs. The users are doing the describing, evangelizing and selling.
Start a Revolution
I am always in awe of Scrivener. I have been an user of the product from version 1.0. I found it much preferable to Microsoft Word which was the dominant word processor on the Mac in those days. There are new people discovering that every day. Here is Briar Kit Esme making the argument in favor of Scrivener over Word.
Do yourself a favor, search Twitter for #Scrivener. Look at the tweets. You will find a veritable cottage industry of people who are making a living teaching new Scrivener users how to use the product. There is a novel in each of us and Scrivener has tapped in to this market with gusto. Along with this has come the people trying to help users get the most benefit out of the program for a fee. The market leader in the field of word processing for the Mac, Microsoft Word has never seen this kind of excitement and activity. Scrivener through its focus on a niche and its unique mix of features has managed to create a revolution in that space. In fact, if you are interested in studying a well marketed product, Scrivener is a great example to learn from1.
How Do I Market to Existing Users?
So what are the things that you can do to market to existing users? This is an easy question to answer: Take care of them.
What are you trying to achieve? You are trying to make your existing customers happy. Well, everyone does that. Why are you special? You are going to conceptualize this differently. You are going to increase their involvement with your product. Software is this intangible service which is all around us. You are going to take your software and make it a part of the identity of your users. They are going to be involved in your product. They are going to use your product to tell the world something about themselves. It is going to be an element of their identity. David Hewson is not only a novelist, he is also a novelist who uses Ulysses, and talks about it. In fact, he also wrote a book called Writing A Novel with Ulysses.
Take Care of Them
I am reminded of a quote from Col. Littleton, "do more than you get paid for." I know, profound but not particularly helpful in this instance. Let's see if we can make this more actionable.
- Be accessible. Provide many avenues for your customers to get in touch with you. Different customers have different preferences in what they will use to get in touch with you, give them choices. An email account, a Twitter account, a Facebook page, a customer forum, etc.
- Provide great support. Let the customers know you received their support request. Read their support request. Respond to the problem they are having. I know there are multiple consumers asking the same questions and you are tempted to reply with boilerplate text, do that. But make sure that the boilerplate fits. You have no idea how many times I get boilerplate answers to a question I never asked. Don't do that. Follow up with customers to make sure that their problem got solved. Keep doing this. Be vocal and responsive on Twitter, be active on your customer forums, make the consumers rely on you and your support for the product you are selling. Learn from the folks at BBEdit, Alfred, and Ulysses. They do this well.
- Let them have skin in the game. I have been trying to understand this phenomenon for a while: What causes stickiness in the software marketplace? There are a lot of contributing factors but one thing seems to be constant. Products which let customers contribute to the improvements/additions of the product seem to achieve enhanced stickiness. TextMate, Alfred, SublimeText, Keyboard Maestro, TextExpander, and Atom are all examples of this phenomenon. TextMate, SublimeText and Atom have a built-in architecture which lets its users contribute plugins and themes. Those additions add value and increases user involvement in the feasibility and future of the product. Plugin developers and theme designers feel a sense of ownership and they have basically turned themselves into investors in the product. They maintain these plugins, tweak these themes, cover more languages and generally provide end users with the benefits of their expertise. In the course of these interactions, users turn themselves into marketing mavens for the product they support. This is what I mean when I say let them have skin in the game. The same process has worked with Keyboard Maestro macros, Alfred workflows and TextExpander snippets. Increased user involvement and the resultant improvement in the product has worked together to make each of these products formidable competitors in their space.
- Ask for Feedback. This should be a continuous process. Your existing users will provide you a stream of data on the use of your product. That will help you identify pain points. Parts of your user interface or use process which prove to be painful to use by your users. These are the areas of improvement for your next version. Upgrade revenue is better earned when the incremental version removes pain points. Fix bugs on point releases for free. Remove pain points, and add functionality for paid upgrades. Software forums, Twitter, support email are all potential data points for valuable feedback. Track them closely. Learn from them.
- Be Transparent. The more transparent you are, the more informed your customers are about the direction of your product. You are trying to increase involvement on the part of the existing customer with your product. Increased transparency helps that process. Write extensive release notes. Don't say "bugs fixed." That doesn't help. Be specific. List out in gory details the bugs you fixed. Your customers will appreciate it. Some of them have run into specific bugs which have been driving them nuts. Learning that you took the trouble to fix a particular bug which they reported to you, will make them cartwheel in glee. Provide details.
- Provide Knowledge. Your existing customers are better served when they know the ins and outs of your product. Give them the resources to learn about the product. BBEdit provides a great manual. More products should ship with a complete manual. If you don't include a manual, at least provide avenues for the customer to learn about the features present in your product. Scrivener does a good job of providing a manual and youtube videos to augment learning. Ulysses maintains an informative Ulysses Blog. Ulysses augments that with a newsletter called Ulysses News. Alfred a deep, complicated product provides a web site full of learning resources, including a forum and a blog. The more your existing customers know your product, the more barriers to switching you are creating. No one wants to give up a product they know very well. The more they know the product, the more they share their knowledge, leads to more knowledgeable users and the process is self-sustaining.
- Go the extra mile. Atom, an open source product shipped patches to the contributors who contributed to the open source project when the product reached version 1.0. BBEdit includes the licensed users name in the About page of the software. Ulysses provides users with decals with the Ulysses icon if you send them a postcard from where you are using their product. Do things which are out of the norm. Make your users feel special and loved. Feature them on your website: Murmel Clausen using Ulysses, Mark Hodder who says you can work naked, if you want, and a whole bunch of users preparing for NaNoWriMo with Ulysses. Remember that the best people in the world are those who have already given you their money.
Stuff to Avoid
- Don't be difficult to reach. You are in business. As soon as you charge for your product, you are in the business of business. Do it well. Be approachable. Users have a lot to offer: suggestions to improve, bugs to fix, gratitude for solving a problem they struggle with. Provide a lot of ways for the customer to reach you. If you don't like all this customer interaction, close down your business. Go get a job. Destroy someone else's business. It is a crime to destroy your own.
- Don't use a spam filter which doesn't work. The customer is sending you a crash log. Don't bounce the message via an outbound spam filter. That is not kosher. It is better to use an on-computer spam filter. Check your spam folder for messages which have been misdiagnosed.
- Change the direction of the product and leave current customers in the lurch. Try avoiding this. If you do find yourself going down this path, communicate. Be straight with the customer.
- Discontinue development and still have the product available for sale. I see this happening in the App Store and that is not nice. You are hurting your own reputation. Don't do that.
I am going to repeat the line from Col. Littleton, "do more than you get paid for." Maybe it now will be as profound and a little more concrete.
Update: Good example of thanking your marketing mavens. Stairways Software: Keyboard Maestro 2015 State of the Union
You have to learn from mistakes too. The interminable wait for an iOS version has left the field wide open for Ulysses and Storyist.↩