Closing the Gap, Part 2
Summary: In the exciting conclusion to our last episode, Eric describes an alternative to hiring a sales guy.
Last month we introduced a concept that I call "the gap":
Product -------------------------------- Customer
This gap is the distance between the prospective customer and your
product. As long as it continues to exist, your customer has less
software and you have less money. In order for the sale to occur, this
gap must be closed. Until that happens, the gap represents all of the
issues and obstacles that are preventing the customer from making the
As Chief Sales Geek in your ISV, it is your responsibility to figure
out how this gap is going to get closed. You have exactly two ways to
- Move your product to the right.
- Move your customer to the left.
Last month, we talked about "proactive sales", or "moving your
customer to the left". This month, we will talk about the other way of
closing the gap: moving your product to the right.
In Part 1
of this two-part column, I claim that most small ISVs do not need a
sales guy and should not use the proactive sales approach. This month,
I describe an alternative approach. Instead of proactive sales, we will
talk about "responsive sales". Let us first highlight the differences
between these two models:
- In proactive sales, the sales guy is in charge.
He initiates contact with prospective customers. He tells them about
the product. He answers all their questions. He stays in regular
contact. He provides all the energy and all the momentum. Eventually,
he convinces the customer to make a purchase. He receives money from
the customer and delivers the product.
- In responsive sales,
the customer is in charge. He initiates contact with your company only
if and when he wants to do so. He hears about your product from a
friend or an ad or a weblog. He reads everything he can find about your
product and its features. He contacts your company to ask questions. He
makes his decision at whatever pace makes sense for him and his
organization. Eventually, he decides to make a purchase. He contacts
your company to exchange money for product.
These contrasting descriptions may actually make responsive sales
seem unappealing to you. After all, do we really want to trust the
customer to handle all these important tasks?
Yes we do.
I acknowledge that responsive sales can be scary. It feels like we
are delegating a critical project to somebody we don't know and have
probably never even met.
But a reward lies behind this risk. The truth is that customers like being trusted. They like making their decisions without pressure from a sales guy. They like to be in charge.
For all these reasons, responsive sales works very well, as long as
we hold up our end of the deal. We have to be responsive. Yes, we are
letting the customer be in charge, but we are not powerless.
In fact, we will be quite busy indeed. It is our job to make the
whole process as easy as possible for customers. They will choose to
cross the gap. We will move our product to the right so the gap will be
easier for them to cross.
To succeed in responsive sales, there are seven things we must do:
1. Make Sure Customers Know About Your Product
Customers cannot buy your product if they have never heard of it.
Those of you that find this statement to be insightful will be
similarly enlightened to learn that the sky is blue.
Seriously, I know I'm stating the obvious here, but awareness of
your product is a pretty important precondition, especially for
responsive sales. If the customer never contacts you, then you cannot
be responsive. If you don't have a way of letting people know your
product exists, then you may not need to read the remainder of this
article. Responsive sales won't work for you until you start getting
some awareness built up.
Still, we should remind ourselves that building awareness is the
task of marketing, not sales. Specifically, this is part of a
subcategory called marketing communications, or "marcomm" for short. A
full treatment of marcomm is well beyond the scope of this article. For
now, I want to mention three quick items:
Be careful with advertising
Q: What's the difference between buying magazine ads and setting dollar bills on fire?
A: Flaming cash actually produces a benefit, since it generates heat.
This joke is excerpted from the beginning of an article
I wrote last year about advertising for small ISVs. The rest of the
article goes on to say that I am only half joking. Advertising is scary
and dangerous. You can spend lots of cash and have no idea where it
I am not saying small ISVs should never advertise. Rather, I am
saying that you should be very careful. If you have any reservations,
just wait. Tell their sales guy to call you again in six months.
Try a tradeshow
Among the traditional marcomm activities, tradeshows are my
favorite. Remember the old joke about pizza and sex? A tradeshow falls
into the same category: When it's bad, it's still pretty good. Even at
the worst show I ever attended, I learned a few things and met some
interesting people. If your market segment has any good tradeshows,
consider being an exhibitor.
SourceGear will be an exhibitor next month at TechEd
in San Diego. Since we're currently finalizing preparations for the
show, I plan to use the occasion as an excuse to devote next month's
column to the topic of exhibiting at a tradeshow. Stay tuned!
Develop "in the open"
Traditional marcomm has its place, but there are new approaches.
With the ubiquity of the Internet today, one of the best ways to build
awareness of your product is to develop it "in the open". In other
words, using a combination of weblogs, public discussions, and preview
downloads, let your prospective customers watch and talk with you as
you make your software. Think of yourself as a chef in a Chinese
restaurant, your customers watching as you stir-fry their shrimp and
Start out with a weblog--an open journal of your development
progress. Every so often, post an update of how your application is
At some point, your application will be ready to demo for
prospective customers. Release a public preview for download. Make sure
you provide a mailing list or a Web-based forum so you can receive
Developing software takes time. Doing it "in the open" can be a great way of using that time to build awareness as you go.
2. Make Sure Your Product Is Something Customers Want
Pardon me for again stating the obvious, but this fact remains: If
you're not selling something that people want, your gap is enormous.
A good proactive sales guy can overcome this problem. The tactics
for selling things that nobody wants are very well understood. How many
people would buy rustproofing for their new car if they had to
specifically ask for it?
In the responsive sales approach, you have basically no hope of
selling a product that is not fundamentally appealing. It is therefore
extremely important that you do your homework and convince yourself
that you are building a product that will be desirable. This is the
other half of marketing.
Choose your position
If you have read anything at all about classical marketing, you have
probably heard the word "positioning" at least once. Basically, positioning
is the process of figure out how your target market will perceive your
product. How do you want your product to be known? To what other
products will yours be compared? Answering these questions is a
critical step toward ensuring that your product is something people
Choose your competition
Avoiding competition is perhaps the most common way of ending up with a product nobody wants. You need
competition. By avoiding competition, you are simultaneously avoiding
customers. Your product concept is validated by the presence of other
ISVs who are profitably selling something similar. If there is nothing
on the market that resembles your product, be afraid.
Develop "in the open"
You've got that déjà vu feeling right now, don't you?
Yes, I already made this point about developing "in the open", but
now I'm making it again for a different reason. Developing in the open
is not just a great way of building awareness. It is also a way of
measuring how much people care.
For example, let us suppose that you choose to develop in the open,
releasing lots of information and preview downloads very early in your
development cycle. You make appropriate announcements in the right
newsgroups and forums. However, very few people come to get the
download. Hardly anyone posts to your mailing list. Nobody gives you
The bad news is that you may be developing an application that
nobody wants. The good news is that you find out a lot earlier by
developing in the open. You have time to adjust the feature set. You
may even decide to cut your losses and kill the project. Either way,
you are better off getting the bad news earlier instead of waiting
until the application ships.
3. Make Sure They Can Afford Your Product
The price of your product affects the size of the gap.
When writing about the subject of pricing, it is far more
fashionable to claim that pricing should be higher, not lower. The
basic idea is that you are making a statement with the price you
choose. When you set the price of your product high, you are telling
the world that you think your product is very valuable. This tends to
make your product more highly desired.
Some purchasers actually prefer to buy higher-priced products. At
the moment, I can use myself as an example. I am currently training to
walk a half-marathon. It is important that I have really good shoes. I
should probably go to one of those fancy stores where they analyze a
videotape of your stride and help you select the perfect shoe. But I'm
always in too much of a hurry, so I have simpler approach. I only buy
shoes if they are of a strong brand and cost at least $85 per pair.
This approach is low tech, but it is simple, and it works for me.
Some people buy software the same way I buy shoes. Buying the most
expensive product is a convenient shortcut for the shopper who doesn't
have time to research everything thoroughly.
A higher price point can be attractive to customers who are seeking
either prestige or exceptional quality. However, lower pricing has its
advantages, too. The fact is that many of your prospective customers
have a budget. If your price is higher than their limit, the gap might
as well be infinite.
A few months ago, my company lowered the price of our version
control product (SourceGear Vault). At its original price, Vault was
already one of the least expensive tools in its market segment. With
the new pricing, all of the comparable competing products are several
times our price. We knew this was a big risk. Some customers will
automatically assume that a competing product which costs seven times
more must certainly be seven times better than ours.
So far, the risk is paying off. We made this decision because we
believed that the gap was simply too large for many customers to cross.
Apparently we were right. Our total revenue has been significantly
higher since the price change.
4. Offer a Full-Featured Demo Download
Every small ISV today should give its customers an opportunity to
try before they buy. It is officially now absurd to do otherwise.
Customers will come to your Web site and expect to find a demo download.
There are several opportunities here to make things easy for your customer. Don't miss out on any of the following:
Make the download easy to find
You probably think your download is easy to find. After all, you know right where it is, right?
Don't assume. Grab a stranger (don't actually grab them) and ask
them to visit your Web site and find the demo download. Watch them
search and see how long it takes.
Make the download full-featured
The best demo download is the product itself. Every SourceGear
product has only one binary available for download. The demo version is
exactly the same binary as the full product. Every feature is enabled,
but only for 30 days. To make a purchase, the customer simply enters a
serial number and does not have to reinstall.
Polish your installer
Your demo download is your opportunity to make a positive first
impression. It is indescribably important that your demo "just works".
If anything goes wrong, your customer will probably just lose interest
and you will have lost the chance to be responsive.
Let the customer remain anonymous
The hyperlink to your demo download should link directly to the
actual binaries. Don't make users fill out a form and give their
contact information. This is responsive sales and the users are in
charge. Let them decide when they want to make themselves known to you,
if at all.
5. Answer the Customers' Questions
I am a big believer in the importance of giving excellent technical
support. When your customers have problems, you need to stop and help
them. Furthermore, I believe that happy customers are the
responsibility of every employee in a small ISV.
At SourceGear, every developer is involved with helping customers.
We do have "level 1" tech support people whose full-time responsibility
is helping our customers. But when level 1 either overflows or
escalates a problem, every developer is available to help with "level
2". Our customers like the fact that when they have a problem, they can
talk to the person who actually wrote the code.
With very few exceptions, everyone on your staff should be prepared
to stop what they are doing and help a customer when needed. An
important key to the responsive sales model is that you have to treat
your prospective customers exactly the same way.
6. Provide a Place for Community
Prospective customers want the ability to talk to current customers
about you and your product. This concept may seem scary. After all,
what if some of your customers are disappointed with your product in
some way? Do you really want prospective customers talking with people
who might say negative things?
Yes, you do. This is responsive sales, and the customer is in
charge. Not only should you let your prospects talk to your customers,
you should provide them a place to do it.
I wish more vendors would do this. Last year, I bought a Chevy
Avalanche from a dealer in my area. Think how nice it would be if my
sales guy had made arrangements for me to speak with his past
Before finalizing my decision, he escorts me to a special waiting
room, and there I find everybody who has ever purchased an Avalanche
from this particular sales guy. Immediately I start asking questions:
How do you like the truck? Does water leak into the back? Should I
upgrade to the bigger engine? What about this sales guy, is he a jerk?
Has he ever lied to you?
Regardless of the answers I get, one thing is clear: This sales guy
has impressed me. He is unafraid of his past choices. He believes in
the quality of his product and in the level of customer service he
provides. He has nothing to hide.
Obviously it's just not feasible for my Chevy dealer to offer this kind of benefit, but it's downright simple for a small ISV.
SourceGear provides a Web-based forum where our customers and
prospects can talk to us and to each other. Users of this site are free
to express their opinions. When a customer gripes about us
(SourceGear), or our products, we don't dismiss the comment.
Prospective customers often visit the site and ask questions from
other users. If one of our current customers gripes about us, then we
probably deserved it. Instead of trying to impede the truth, we instead
try to fix the problem.
Sometimes this approach isn't much fun at all, but it provides a
nice feedback mechanism which forces us to constantly improve our
product and keep our customers happy. Prospective customers can see
7. Make It Easy to Buy Over the Web
The final step in closing the gap is the moment when someone gives
you money and you give that person software. Just like every other
step, the customer is in charge, but it is your job to make everything
easy for them.
There are several different ways to get an online storefront. You
can find lots of companies offering to host a store for you. There are
also a number of software packages that you can buy. I lack the
experience to recommend any of these options because we (SourceGear)
have always written our own online store software.
One of the reasons we wrote our own store is because it gives us
completely control over the experience of our user. We are always
trying to make it easier for people to buy our product. We want our
online store to immediately generate serial numbers and e-mail them to
Whatever approach you choose, the following suggestions may help you in your quest to keep things simple:
Don't make customers login
The last thing your customer needs is yet another username and password to remember.
Does your online store really need to create a user account for everybody who makes a purchase? Probably not.
Can't you just take their money and give them software? Probably.
You don't need a shopping cart
I think Amazon too heavily
influences the expectations for online shopping. In my opinion, Amazon
has a really incredible shopping cart system. It is extremely powerful,
and yet it feels extremely simple.
So we convince ourselves that our online store needs to be as cool
as Amazon's, but that just isn't true. Amazon truly is an online store.
The shopping cart metaphor makes sense. The Amazon store is immensely
large and contains a staggering number of products. It's a pleasant
place. It only makes sense that we would want to leisurely wander
around the store, selecting various products as we go, stopping at the
checkout line on our way out to pay the bill.
Your small ISV simply doesn't function on that kind of scale. You
are more like a hot dog stand than a store. You sell only a few
products; perhaps only one. Your customer has no interest in leisurely
walking around and browsing the vastness of your product offerings.
They came to buy a hot dog and they don't understand why you expect
them to place it in a big shopping cart and walk halfway down the block
to go pay for it.
I speak from experience and mistakes. Until recently, the SourceGear
online sales system was an extremely poor clone of Amazon. In a major
rewrite, we eliminated the shopping cart and simplified the entire
ordering process to a single form. Everything is much simpler now.
Give customers the product right away
It's fine if you need to ship some sort of physical object to your
customers. However, don't make them wait for the media or documentation
before they can get started. Immediately after the user places an
order, let the user download the bits and start using it right away.
Even better, give serial numbers to the users to simply activate the demo(s) they are already using.
But We Can't Do It This Way!
I know that lots of people are going to disagree with me on the
opinions in this article. Trusting the customer is scary. If you don't
like what I've written here, then at least give serious consideration
to the following:
Have I not described exactly how you want to be treated when you are the customer?
If so, then shouldn't you be treating your customers the same way?
We're Not Perfect
At every seminary and religious school, preachers are taught to
"preach above themselves". After all, pastors are just people. They
have problems just like the rest of us. It takes a lot of audacity to
stand up before a congregation every Sunday and talk about how to live
a better life. If perfection were a requirement for the job, then the
pulpit would always be empty.
I face a similar problem in my writings, but especially in this
article. Several times here I have used my own company as an example,
but we are very far from perfect. Our demo doesn't always just work.
Our online store has quirks. Sometimes we are too slow in responding to
technical support. Just like every sermon I have ever heard in church,
I preach to myself, and Monday morning I will try and do better.
For most small ISVs, responsive sales are the way to close the gap.
Let the customer be in charge, but make the gap easy to cross by moving
your product as close to them as possible.
Eric Sink is the non-legendary founder of SourceGear,
a developer tools ISV located in Illinois. Three weeks ago, Eric hit a
9-iron 160 yards. He's still gloating about it. Eric's weblog is at http://software.ericsink.com/.
This article originally appeared on the MSDN website.