Software Marketing – The Channel Has Changed

Until recently software was primarily sold through resellers and retail.  Tradeshows were essential for promoting enterprise software.  Established players had the mindshare to be contacted when someone needed their software, and new companies had a hard time breaking into existing categories.

But software marketing is changing quickly.  Retail software companies like Egghead and Software Etc are gone.  Even the software sections at CompUSA and Staples are a fraction of what they used to be.  Comdex and other key tradeshows are history.  And value added resellers are scrambling to come up with more value added services to replace their dwindling software sales.

Why? Customers are now much more empowered then they used to be.  Who needs retail or a reseller when a free software trial is only a few clicks away?  Looking for an FTP program?  Google it and you will find several free, secure, and easy programs – whatever your needs, you are only a few minutes from finding the right solution.  Not sure if you trust the brand, Google the specific brand.  Generally you will find at least one review from a reputable publication.

And it’s not only consumers and small businesses using the web to find software.  Enterprises are also empowered to research and buy solutions online.  For example, at the very early stages of my current company (only a couple years ago) one of the world’s largest technology firms began assessing our solution.  Before the sales team even had a chance to speak with someone from the company, dozens of people were deep in evaluation.  How did they find us?  Google Adwords, of course. We’ve now completed several six figure transactions with this company on a trial that cost only a few dollars to generate.

Smart software marketers are enthusiastically following their customers onto the web.  It is a perfect medium for promoting and distributing software.  The web provides much better measurement than traditional marketing mediums.  Each campaign can be tracked by the cost of generating a trial and a purchase and comparing that to the projected lifetime value of each customer.  Campaigns that don’t yield a positive return on investment can be cut, allowing the marketer to concentrate funds in the most effective marketing campaigns.  Also, VARs no longer stand in between the publisher and customer.  Since the software publisher now fully owns the customer information, they can make a much more effective investment in CRM.  And brands can be built over time through branded customer interaction rather than through risky, less accountable print and trade show investments.   Finally, since packaging and distribution costs have been eliminated, software now really does have virtually zero marginal cost.

Online marketing, particularly search marketing is great for harvesting existing demand, but creating demand for a new category of software can be a bit trickier.  I’ll cover that in a future post.  Also, the software marketing landscape continues to change with the increasing popularity of software as a service (SaaS).  This brings additional challenges, but is even more suited to the web than traditional licensed software.  Again, I’ll cover SaaS in a future article.

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