commodity - "Me too" software.
Commodity software is an application that doesn't offer any features or benefits that its competitors don't also have.
If the buying public views your software as a commodity, they're going to look at your competitors' applications, too.
Their software buying decision will be made largely on price.
common sense - Advice from well-meaning friends to think less creatively.
I've found that often it's entrepreneurs' lack of common sense that drives them to create successful software applications.
company name - The word or phrase that many prospects will use to try to find you in the search engines.
It's important that your company name be at the top of your web pages in machine-readable form (as opposed to being part of a graphic image which cannot be indexed by the search engines).
competing with software giants
competing with software giants - Selling more software, even though there are huge software companies that offer similar applications.
Throughout the history of software marketing, small software development companies have been competing with software giants. In theory, it should be difficult for the small software development companies to win these competitions. Truth is, it's common for one-person software companies to take market share away from the huge, well-financed software publishers.
Advertising Legend David Ogilvy
How can a small independent software vendor (microISV) compete with a huge company? Smaller software companies can learn lessons from David Ogilvy. Time Magazine has called Ogilvy the most sought-after wizard in the advertising business. Chapter 14 of Ogilvy's book "Ogilvy on Advertising" is entitled "Competing with Procter & Gamble - Who's afraid of the big bad wolf?" The lessons from Ogilvy's 1983 book are as valid today as they were when he penned it. Ogilvy had competed against P&G for many years, and he respected P&G's advertising prowess. In head-to-head competition, however, Ogilvy's advertising company helped his clients take significant market share away from P&G.
In the early 1980s, Procter & Gamble spent seven hundred million US dollars a year on advertising. P&G's gross sales were roughly $12 billion a year. P&G's success was based on marketing fundamentals - they intelligently applied sound marketing principles to the marketplace. Here are some of the ideas that P&G implemented to become successful. Today's software developers can learn a lot about marketing from P&G's successful ideas and practices.
Provide product samples
Ogilvy mentions that P&G distributed home-delivered samples to prospects. Lots and lots of home-delivered samples. The company was convinced that if they let consumers try their products, they would want to purchase them.
This was a very expensive way to sell consumer goods. They had to manufacture their samples, postal-mail them to prospects, and ensure that grocery and department store shelves were stocked with P&G's stuff when consumers went shopping.
This type of marketing is easier for software developers, mainly because of the Internet. Once a software application has been developed, the distribution cost for the trial version is nominal. Without doubt, the cost of advertising and marketing your software, and letting potential buyers know where to find it, can be substantial. These marketing costs pale, though, when compared with P&G's costs of manufacturing and distributing samples of toothpaste or laundry detergent.
For prospects who visit your web site, you have to decide if you want to sell them your software, or entice them to download your trial version. For most developers, selling software should be the primary objective, and encouraging prospects to download the trial version should be a distant second choice.
Know your marketing categories and competition
Procter & Gamble never entered small categories unless they expected them to grow, Ogilvy explains. The consumer products giant didn't enter niche markets. While this may be a good practice for publicly-traded software companies with large marketing budgets, many smaller software development companies find it quite lucrative to find and dominate niche markets.
"They (P&G) often enter more than one brand in a category," Ogilvy wrote, "and allow each brand to compete with its sibling - with no holds barred." Some software developers, large and small, take the same approach. In addition to selling their software on the Internet, they'll form an alliance with a publisher to distribute their shrink-wrapped software in computer and office supply stores, often under a different brand name.
Market research is important
P&G spent a lot of money doing market research. Ogilvy believed that P&G created products that were better than competitive products. More importantly perhaps, the marketplace perception of P&G's products was that they were better.
In addition to surveying potential buyers before building and designing a new product, P&G also did extensive test marketing. P&G would rather be right than first. This marketing approach seems to contradict today's wisdom that being first to market a new product is the most important factor in a company's potential success.
Apple, it would seem, has followed P&G's example. Many years after computer tablets were first sold, Apple launched the iPad. By waiting, and by marketing a tablet that consumers genuinely want to use, Apple revived a tired old idea and turned it into a computer marketplace success.
Ogilvy noted that all of P&G's ads stressed one key benefit. If they wanted to talk about two important benefits, they would develop and run two separate ads (versus stressing two benefits in a single ad).
Most microISVs' advertising is found on their software websites. And most software developers' websites present a wide variety of information about their applications' benefits and features. Perhaps developers would strengthen their software marketing if they followed P&G's lead, and spent most of their time emphasizing a single software benefit.
P&G's television commercials spoke directly to consumers. Many microISVs have been taking a similar approach by writing their websites' sales messages in the second person. This means speaking directly to prospects and consumers, with lots of emphasis on "you" and "your" and "you're" words.
In contrast to this second-person conversational approach, other developers talk in the third person about their products, occasionally mentioning "the user" as an abstract person who buys their software. In most instances, P&G's technique of speaking directly to potential customers is a more effective way to do software marketing.
P&G used mostly unknown actors in their commercials. This is very different from today's practice of getting celebrity endorsements from Hollywood stars, famous musicians, and sports heroes.
While it seems that P&G's products were on television day and night, Ogilvy told us that less than one third of P&G's advertising budget was spent on prime-time TV advertising. There's a lesson here for software developers: If you're buying words on the search engine, you don't have to limit yourself to Google. Be sure to check out Bing, Yahoo, and some of the smaller search engines, too. And if you're buying text or banner ads on the software download sites, you don't have to limit your ad buy to the highest-traffic sites.
Product names are important
Procter & Gamble's product names, Ogilvy pointed out, were short and simple. Today's list of P&G products includes Cascade, Cheer, Comet, Crest, Febreze, Gillette, Olay, Clairol, Ivory, Tide, and Pringles.
When they advertised their products, P&G never mentioned their competitors by name. Instead, P&G would use a phrase like "the other leading laundry detergent."
By contrast, some software developers name their competitors in their websites' sales messages. For example, a microISV might create a feature-comparison chart that shows their applications' features and benefits side-by-side with competitive products'. And some developers offer competitive upgrades for customers who stop using a competitive product and switch to their own.
Should software developers include the names of their competitors in the sales presentations on their websites? In some jurisdictions, it may not be legal to mention competitive companies or products by name. Where it's legal, developers might try both approaches, and compare the results.
Talk about benefits
Ogilvy mentioned an interesting attribute of P&G's advertisements that might help software developers sell more software: P&G showed consumers "how" the product will benefit them, without explaining "why" it would benefit them. P&G's ads promised softer skin, or a fuller social life, or other benefits, both tangible and intangible. The reader or viewer of the advertisements was left to determine how the products' features would lead to these benefits.
Product users were portrayed as benefiting emotionally from using P&G's product. Again, the P&G ad didn't connect all the dots. Prospects had to figure out how P&G's consumer products would deliver all of their benefits.
Most marketers believe that ads are more successful if you can offer - and prove - a specific, quantifiable benefit. Software developers need to choose the approach that makes the most sense in their marketplace, and measure the sales results. Change your marketing message, and measure again.
The bottom line
How can a small company beat a well-funded, well-known company like P&G? Or more importantly, how can a microISV compete successfully with a well-funded, well-known software publisher? Take advantage of your company's strengths. Small software development firms can move much more quickly than a large company. Once a microISV identifies an opportunity, it's easier to allocate resources on the new development project.
microISVs should learn from Procter & Gamble. Bring their successful design, advertising, and marketing ideas to the world of software development, and sell more software. It's good software marketing.
competition - Other companies that are rivals for the things that you seek.
In the software industry, it's easy to think of your competitors as companies who offer software that is functionally similar to yours.
Truth is, any company can be your competitor if, in the eyes of prospects, they provide an alternative to buying your software.
For example, a retail store that offers wide-screen HD televisions is a competitor to companies that offer luxury vacation packages; they're both vying for the same dollars.
In the world of search engine optimization (SEO), your competitor is anybody who is your rival for the keywords and key phrases that are critical to driving prospects to your website.
Even though a company may not be offering software, if they're getting a higher ranking than you are for words and phrases that are critical to your success, then when you do your SEO, you should treat them as your competition.
competitor - A website owner who tries to generate web traffic from the same keywords and key phrases that are important to you.
Your competitors share your attraction for search engine keywords, even though they might not be in the software industry.
You can use Google's "related:" search operator to find web sites with similar themes and keywords as yours. For example, to find the sites that are related to the Educational Software Cooperative, type related:www.edu-soft.org into Google's search box.
compiled list - A database of prospect contact information that is built from multiple sources.
These sources might include magazine or newsletter subscriptions, membership records from nonprofit organizations, data from the Internet, product registration cards, industry directories, public records, and others.
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