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Keep track of software profits
Downloads, sales, and visitors are secondary. As a software developer, you need to concentrate on making long-term profits. Identify the most profitable use of your time, and direct your energies accordingly. Build a rock-solid reputation in your segment of the software development industry, and profits will follow.
If you focus only on sales of your programs, you might miss out on profits
Sales are nice. But by focusing on sales instead of profits, it's easy to make serious mistakes.
Advertising can increase sales. But if you're spending too much on advertising, profits will suffer. You need to measure the results of your adword, banner, magazine, direct mail, and other advertising campaigns. Unless your ads generate more revenue than they cost, move your advertising budget to another outlet.
Try to measure the sales results of your advertising campaigns. It's much easier to measure the effectiveness of some advertising outlets than others. Don't dismiss an advertising or promotional idea because it's hard to measure. But challenge the metrics and assumptions of the salesperson who is trying to sell you an ad campaign.
Don't offer free lifetime upgrades to your software. Many developers think that a lifetime upgrade guarantee will bring in more sales. Buyers are cynical. They don't expect your business to survive forever, or even very far into next week. They've been burned before by companies that promised free lifetime upgrades to their Widget software application, only to find that the program has now been upgraded to Widget Pro, and that Widget is no longer being enhanced.
You're not going to get a lot of incremental sales by offering free lifetime upgrades. And by offering free lifetime upgrades, you're giving away a substantial income stream. It's much easier to sell an upgrade to an existing customer than to find a new customer to buy your software. Focus on profits. Examine the total lifetime value of each customer. If you can offer a meaningful, content-rich series of annual upgrades to each of your applications, you can generate a lifetime of income.
Stop focusing on software downloads
Downloads are nice. Perhaps one or two people in 100 will buy your software, and that can lead to profits. But you can make a lot more money if you try to sell your software.
Encourage people to buy your software, not try it. Developers mistakenly think that ordinary computer users buy software the same way that they do. Ordinary users would never download, install, and experiment with four or five programs before choosing one. Most non-technical people buy software because they've read a review in a magazine or newspaper, or because they received a recommendation from a friend. They have a problem, and they want to buy a solution. Sell them your software. The words on your web site should be designed to close the sale. Make it easy for web site visitors to buy.
Use your trial version to sell your software. If your web site doesn't sell your software, encourage people to download. Shareware is a great secondary strategy. Turn your trial version into a sales machine.
Don't focus on raw website visitor numbers
It's a mistake to buy badly-targeted traffic.
You can buy banner ads, pop-up ads, pop-under ads, and all sorts of click-based web traffic. Some of these will be profitable, and some won't be. But generating traffic - even targeted traffic - is not the same as creating profits. Start by buying an affordable sample of traffic, and measure the results. Only continue the advertising campaign if the results are profitable.
You can buy search engine keyword and key phrase traffic. Create unique landing pages for each keyword. Target, test, and measure the results. Buy keywords to generate sales, and not to generate downloads.
When calculating profits, factor in your support costs. If you increase sales, but you're selling to an audience that requires much more support than you normally provide, then sales may be up while profits may be down. While all sales may generate the same income, they don't necessarily generate the same level of profit. Keep track of the customers whose support demands are excessive. Identify them, and how they found you. Avoid them. Or find a way to sell them support contracts.
Don't focus on quick sales
Some developers are making money selling trendy software such as anti-spam applications and pop-up blockers. That doesn't mean that you should slap together an app in one of these hot categories, just to pick up a few quick dollars.
If you rush a program to market, and it hasn't been tested on enough combinations of hardware and operating systems, you're going to damage your reputation and your profits.
Long-term profits come from developing a reputation for quality software and customer service. Releasing a second-rate application into the marketplace hurts your brand. It generates some quick sales, but is not the best way to grow long-term profits.
Focus on profits from your software business
The bottom line - Focus on profits. Build the best quality applications. Provide the best customer support in the industry. Publicize your program widely and wisely. Your reputation will soar, your company will grow, and you'll be able to price your software above the commoditized me-too programs that fill the marketplace. Focus on profits.
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