Archive for category The Business of Software
The Voice of the Customer in Online Marketing
Posted by Nicholas in business, Business Process Improvement, entrepreneur, internet, marketing, The Business of Software on May 4, 2007
There’s a basic concept in Six Sigma called Voice of the Customer. When you’re defining a project, you need to identify the critical-to-quality (CTQ) elements in your process that matter to the customer. Too often though, the voice of the customer isn’t heard until _after_ they become a customer. What about potential customers?
Taking a step back for a second, here’s a worthwhile quote from Jack Welch…
“One thing we have discovered with certainty is that anything we do that makes the customer more successful inevitably results in a financial return for us.”
Products and services sell because they solve people’s problems. They make customers more successful. And the only way you can solve their problems in the first place is if they become aware of your product, understand your product, and see the benefits. So the voice of the customer needs to start with marketing.
In his recent post on MicroISV.com, Dave Collins touches on this. He makes the point that software vendors should sell the benefits, not the features:
“Customers get freaked out by features. We don’t like them, they sound intimidating, and they do nothing to make us smile. But we love benefits. Save time, save money, use more for less. Lovely. Music to our ears.”
Stepping back into the voice of the customer mode, want do customers really want to know when they visit a site? It’s simple really, they want to know:
- What the product is.
- How it will benefit them.
- How much it will cost.
- How credible the offer is.
Notice that I wrote “How it will benefit them”, not just “the benefits”. It’s a fine distinction, but an important one.
When you get into the business of running an online company, “sell the benefits” is one of the mantras that get chimed over and over again. Emotion sells more than logic is the copywriter’s motto. Dave’s a smart guy and runs a successful software marketing firm, so I’m sure he knows what he’s talking about. But the problem is it’s a concept that gets misconstrued and taken to the extreme.
I’ve seen too many software sites that get so focused on the benefits that it’s hard to tell what the product actually does. Microsoft’s Silverlight page is a perfect example of this. Most enterprise software websites are even worse.
In any product genre, you can find numerous product sites all claiming to “save time, save money, use more for less.” But that’s not enough. What you really need to do is connect the dots between the benefits and the features in order to be credible.
Do customers really get “freaked out by features”? Not me. In fact, they’re typically the first thing I look for. When I’m buying a product to solve a problem, I need to know whether the product has the capability to do so.
Sure, I’m an engineer, so that may seem like a quirk. But the majority of my support time is spent on pre-sales inquiries. Are these people emailing me about the benefits? No, they are asking if the software supports one feature or another. That’s real data that proves to me that customers don’t get freaked out by features.
So the next time you work on your company’s marketing, put on your Jack Welch hat and think about how your product will make your customers more successful. Drill it down to how each of the features in your product will benefit your customers. The end result should strike a nice balance between “sell the benefits” and “sell the features.”
Slouching Towards Bethlehem – a Change of Course for FlowBreeze 2.0
Posted by Nicholas in Product News, The Business of Software on March 31, 2007
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
- W.B. Yeats, The Second Coming
As I battled the demons towards the planned launch of FlowBreeze 2.0, I stumbled upon Clarke Ching’s Rolling Rocks Downhill, a business novel about Agile Development in the tradition of Eliyahu Goldratt’s The Goal. It’s a great read so far, and I encourage everyone to take a look. It also made me change how I will do business here at BreezeTree.
I’ll be honest, FlowBreeze isn’t exactly the most complex code base you’ll come across. So I never looked at it from the perspective of a big, hairy project that could benefit from the use of a lot of the Agile Practices, although I already do Test Driven Development to a certain degree. For a small business there are a number of advantages to releasing major updates, which I won’t go into here. Many of those advantages will go away as I work towards more automated builds.
But one of the problems with FlowBreeze 2.0 is that so far, it doubles the size of the code base. And I haven’t even implemented all the planned features yet. In fact, there are a few features that have turned into such beasts that they are holding up the completion of the project.
What I’ve decided to do is switch tacks and start releasing individual features under minor release versions. The first release will be FlowBreeze 2.0, but the version number change is due to the numbering I’ve used for source code control more than anything. But honestly the difference between FlowBreeze 1.3 and 2.0 will be minor. Then I will start releasing minor versions of FlowBreeze – 2.1, 2.2, and so forth in more frequent succession.
Stay tuned…
3 Old Media Outlets for Entrepreneurs
Posted by Nicholas in business, entrepreneur, General, The Business of Software on March 26, 2007
Everyone likes to write about web sites and blogs catering to small businesses. That’s fine. Many people like Escape from Cubicle Nation, Wall Street Journal’s Startup Journal, OnStartups, Creating Passionate Users, among others. They’re good sites and are worth a read. Even if you read them just for inspiration or entertainment, you can usually pick up a few nuggets along the way.
But life shouldn’t be spent in front of a PC. (It shouldn’t be spent in front of the TV or in a car either, but then we’d have a different blog post.) So here are three “old media” resources for entrepreneurs worth checking out.
- Your Business on MSNBC. Most “business” news programs cover Wall Street, big business news, or personal finance. You don’t get many that actually talk about running a business. That’s where Your Business differs from the pack. The 1/2-hour show is the Web 2.0 of business shows. It features real advice on starting and running a company. Recent topics included picking a domain name, getting funding, advice on setting up a partnership, viral marketing, and their regular elevator pitch segment (which I’m pretty sure they stole from StartupNation, below).
- Small Business School on PBS. This hour long Sunday morning show has been running for several years, and I catch it whenever I can. Each episode does an in depth feature on a small company, and focuses on what made them different and what challenges they faced. It can be a little preachy, but the central message for each show is worth paying attention to. One of their recent show titles captured it all, “There are 19 million sole proprietorships in the U.S. alone, and each one is different.”
- StartupNation Radio. This is a fun radio show that runs on Saturday afternoons. They’ve recently covered marketing strategies, e-commerce tips, eBay businesses, and building on-line communities. One of their best regular features is the Elevator Pitch Contest, which is not only entertaining, but it also reinforces how much you need to focus not only your message but your business plan too. The only downside is that many people listen to talk radio only when they’re in their cars, so it can be hard to remember to tune into this show.
Great Tax Advice for Small Business Owners
Posted by Nicholas in business, Business Process Improvement, General, microISV, The Business of Software on March 24, 2007
Thanks to Matt Inglot for writing my belated New Year’s resolution for me. (Yeah, I’m running a little behind on that one.) The recent tax season has convinced me his 5 Tips for Staying on Top of Your Books for Small Business Owners is just the sort of advice that I should be implementing. Especially the automation. If there’s one thing I hate doing as a small business owner, it’s keeping my books straight.
How to Improve Your AdWords Campaign in 10 Simple Steps
Overwhelmed by all the advice you read about running an AdWords campaign? Here’s a simple and concise list I’ve gathered from several reliable sources:
- Break your campaign in groups of 10-20 highly related keywords.
- Use exact matching or phrase matching, but avoid broad matching.
- Use negative keywords (e.g., -free) to improve CTR & lower cost.
- Put keywords in the headline and repeat them in the body.
- Body: 1st line = descriptive benefit and 2nd line = a feature, offer, or call to action.
- Create separate landing pages for each target keyword group and make content relevant to keywords, putting the landing pages in sub-directories named after target keywords and making sure the sub-directory is included in display URL: www.blah.com/keyword.
- Find tangential keywords. **
- Always run 2 ads side-by-side. ***
- Run different campaigns for different geographical regions (e.g. US vs. Europe).
- Search Search Network and Content network ads in separate campaigns with lower CPC and daily budgets.
Notes:
* Make sure to disallow duplicated pages in your robots.txt file to avoid Google’s duplicate content penalty.
** Example of tangential keywords: I make flowcharting software. I targeted the keywords “E-Myth” and “EMyth” because I figured entrepreneurs who were standardizing their business processes might want to flowchart them. It worked.
*** Shuffle the word order, capitalization, try synonyms, price vs no price, etc. Run a week at a time and always replace the poor performer with a tweaked version of the good performer.
What Every Online Vendor And Consumer Should Know About AVS
One of the more frustrating things about selling online is dealing with AVS mismatches. Sometimes you get an email from a customer complaining that your payment processor won’t accept their credit card. Most of the time, though, the sale is lost without notice – unless you’re scanning your transaction logs daily.
So What is an AVS Mismatch?
AVS stands for Address Verification System. It’s a system used to defer credit card fraud by checking the customers billing address versus the address filed by the credit card company for that account.
Seems pretty straightforward, doesn’t it? So why is it a problem?
The problem often comes from customers buying with corporate credit cards. I’ve experienced this problem a number of times, and every time so far the problem is that the customer assumes that the address of their work facility is the same as the credit card billing address of record. Often it’s not.
Three Common Scenarios
Here are three common scenarios I’ve had first-hand experience with AVS mismatches:
Small Businesses: With small businesses, sometimes the owner will register the card with their home address used for billing. That’s fine, but they do need to realize that their business address is not going to be the same as their billing address when doing credit card payments on-line.
Medium to Large Businesses: Another common case is when the buyer is located in one state and the corporate headquarters is located in another. Their billing address is usually the address of the headquarters – not their local shipping address.
Parent Companies: This is just another variation of the same thing. If a company has corporate credit cards issued in the name of the parent company, then the buyer needs to know the billing address that the parent company uses.
What Can Be Done?
If you’re a customer, then it’s pretty simple. Find out your corporate billing address and use that.
If you’re a vendor, then there are several things you should do. First, put a small note on your order pages for customers using company buying cards. Second, periodically monitor your transaction logs, looking for AVS mismatches. Third, if a potential customer emails you about a credit card problem, use the advice given here to determine whether this may be the cause of the problem.
AVS Is Good for Everyone
Now all this may seem like a hassle – especially if you’re a customer. But online credit card fraud is a rampant problem, and e-commerce providers take fraud detection seriously. So they really are helping businesses with these extra security measures.
But customers benefit too. You and I are all potential victims of credit card fraud. Online, the fraudulent buyer doesn’t even need your card – just the number, expiration date and usually the 3-digit verification on the back of the card. So AVS checks are a simple way to ensure that one avenue of abuse is cut off, protecting us all.
FlowBreeze Flowchart Software – First Year Sales Stats
Posted by Nicholas in Flowcharts, marketing, microISV, Product News, software, The Business of Software on March 4, 2007
I wanted to say Thanks! to all the BreezeTree customers who have made this a great first year.
The first six months were a little slow, but after the release of FlowBreeze 1.2, sales really started to pick up. FlowBreeze (a Flowchart Generator for Excel) has benefited from a lot of word of mouth marketing. Plus, the internet has a way of rewarding you over time. As a site’s age grows, it collects a few links here and there, and rises in the search engines.
I’ve decided to publish my sales growth numbers along with traffic growth. I’m too secretive to provide actual numbers, so I’ve normalized the first month of sales and traffic equal to one (1). Numbers-wise, I will say that the traffic is up over 40,000 visits per month. However, that isn’t unique visitors and doesn’t filter out spiders and bots. The main point of interest is the trend.
Sales for most software vendors start out slow, but FlowBreeze benefited from having a beta test signup in place for 6 months prior to release. Beta testers were given a 50% discount, so I was able to sell a decent number of licenses right out of the gate.
So, without further blabbering, here are the sales growth and traffic growth charts:
This third chart is traffic overlaying sales. The interesting thing is that traffic is a clear leading indicator of sales. That may seem like an obvious correlation, but it’s reassuring to see that BreezeTree.com is getting relevant traffic growth.
Overall, I would say that this little flowcharting utility has outperformed my first year’s expectations. I will continue to improve the product and add features based on customer feedback. I am looking forward to releasing version 2.0 soon.
I will also be leveraging the FlowBreeze platform in several ways this year. First, I will leverage the existing code base to spawn off a Value Stream Mapping version of FlowBreeze. The other way I will be leveraging it is by taking advantage of Excel’s built-in data analysis strengths. this will come to light not only in the Value Stream Mapping product, but also in a Business Process Mapping tool that add metrics and process modeling to flowcharts.
So thanks again to everyone who has helped make this a great first year, and I look forward to having an even better second year.
- Nicholas Hebb
Getting Serious About The E-Myth Revisited
Posted by Nicholas in Business Process Improvement, Flowcharts, The Business of Software on November 7, 2006
When I read The E-Myth Revisited, I have to admit my first impression was “What a load of crap!” After all, it takes 200 pages to say what could be said in less than 10. I’m busy. I don’t have time for that.
Through analogies to the world of McDonald’s franchises and small bakeries alike, author Michael Gerber treads old ground about standardizing and optimizing your business processes. I’m no snobby process wonk, but the smell of old-school TQM Duh-ness, re-branded for entrepreneurs lingered in the air.
In the year since I read it, I’ve launched my first product and gone through the kind of metamorphosis that can only occur once you’ve become a business owner. You get deeply entrenched in what you’re doing, and it’s really hard at times to step back and look at the big picture.
That’s where the appreciation for The E-Myth Revisited comes in.
The E-Myth Revisited is like a piece of string tied around your finger to remind you to document your business processes. Once you have them documented, you can start to analyze them and see where they can be improved.
Little issues keep on popping up because I’m forgetting where I stored this file or that. I forget how I performed a certain task the time before and have to re-figure it out. And worst of all, last month I forgot to do one manual step in the release process that ended up costing me a lot of time and money.
Obviously, I needed to start E-Myth-ing my own dog food.
Now, I document practically everything I do. I just open up Excel and knock out a quick flowchart. I save the file to a designated directory then print out the flowchart. The flowchart goes into a 3-ring binder that contains all my business process information.
My goal? To be able to tell my wife, “If I die, everything you need to know to run BreezeTree Software is in that binder.”
The One Resource Software Developers and Consumers Can’t Afford to Miss
Posted by Nicholas in The Business of Software on October 31, 2006
Do you love a bargain? Of course you do. Everybody loves a bargain. If you love software bargains in particular, then you owe it to yourself to check out Bits du Jour because they offer a new software bargain everyday. If you’re on the consumer side of the equation, then you can keep tabs on their daily software offering via this RSS feed. If you’re on the developer side of the equation, then advice below is aimed at you.
Last Wednesday (October 25th, 2006) FlowBreeze Flowcharting Software was featured on Bits du Jour. I had such a great day that I wanted to do my part to help spread the BdJ gospel, hence this blog post. But it goes beyond that. I also want to help developers get the most out of their one day experience.
My Visitor Logs Are Giving Me the Finger
Every week it looks like my web stats are flipping me off. That’s because Wednesday is my peak traffic day, so the bar chart spikes in the middle. Oddly enough though, it’s just a so-so sales day. By far the most orders are placed on Fridays.
Thinking about this sparked the idea that if I’m going to do Bits du Jour then I might as well make the effort to maximize sales. So I thought I’d share the things I did to help make the campaign a bit more successful. Please note – some of these tips are better suited toward companies that are just starting out and need to kick-start sales and penetrate the market. So use your own judgment as to whether they are suitable for your company.
- I ran a newsletter announcement. Many of my subscribers are already customers, but that’s fine since many of my orders have come from organizations that have already purchased a license.
- I plastered links to Bits du Jour all over my web site, along with a graphic and a testimonial. I think some developers may fear cannibalized sales. While that’s a possibility, my viewpoint is that I would rather have 39 customers at 1/3 the profit then 13 at full profit. Every additional customer is the opportunity to gain word of mouth marketing and tell you when your software has problems or could use a feature or two.
- I ran the campaign on my peak traffic day to maximize the casual visitor exposure. My site attracts a lot of visitors to the articles, but most aren’t interested in buying anything. We all love free content, but we also all love a bargain. So I mixed the two ideas.
- I doubled my Google AdWords CPC and received 3x my normal hits. Unfortunately, my web analytics was not set up to track the Bits du Jour sales through my payment processor. I have no idea whether this resulted in additional sales, to be honest.
- I ran a Google AdWords campaign announcing the 1-day sale with links directly to Bits du Jour instead of to my site. The quality score was lower, reducing my position and increasing my costs, so I cancelled that after 2 hours of 0 clicks and resumed my normal AdWords groups (but with the CPC doubled, as stated above).
Overall, the main point I wanted to get across was that you can maximize the results by brainstorming a few ideas and lending at least a small effort to the promotional activities.
More About Bits du Jour – 7 Months and Growing Strong
Bits du Jour is a part-time venture started 7 months ago by Ellen Craw. There are many deal-a-day sites on the web, the most popular one being Woot, but none of them specialize in software. Ellen noticed the market gap, had the vision, and created a nice WordPress-based site. She has grown the traffic solely by word of mouth. The day my software was featured, Bits du Jour had over 5700 visitors – not bad for a site with no paid marketing.
Ellen attracts developers to sell their products by frequenting on-line developer newsgroups and forums. To sell a product on Bits du Jour, the software company must discount their price (typically 33-50%) and pay a 30% commission to Bits du Jour.
According to Ellen, Bits du Jour currently averages 11 sales per day. However, since Labor Day that number has grown to 17 sales per day, with an overall range of 5-25 sales per day. And there’s no doubt in my mind that the number will continue to rise as the word about it spreads.
So if you’re a small software company, I encourage you to go to Bits du Jour and sign up today. If you’re a software consumer, I urge you to go grab that feed.
Why I Joined the Web 2.0 Cynics Club
Posted by Nicholas in The Business of Software on October 4, 2006
I installed a piece of software recently that sealed my fate in the tongue-wagging war over Web 2.0. This is one of those topics I steer away from. It’s too much like politics. Just as I prefer issues over politics, I prefer solving problems to debating the tools used to solve problems.
One part of the issue stems from the growing number of software startups that are focusing on being Web 2.0-ish and not on solving real problems. The other part stems from the belief in some quarters that the desktop is dead. The latter doesn’t seem realistic, but most of the software startups deemed buzz-worthy these days are Web 2.0 apps.
I’m not a web historian, but from my perspective Tim O’Reilly’s pronouncement about Web 2.0 would have had a long less bang without Google releasing the AJAX-enabled Google Maps. It made a lot of us say “Wow!”.
So what was the app?
The application was the Google AdWords Editor. It has a few warts but compared to the web version, there’s no comparison in user friendliness.
And why did it make me a Web 2.0 cynic?
Google is the embodiment of the New Web Order. I’m not saying the Google = Web 2.0 exclusively, but there is a tight correlation. Google makes its bread and butter off of AdWords. So when Google decides to create a responsive, user-friendly interface to its 2nd most important software (after search itself), they went with a desktop application. Sure it’s written in XUL, but it’s still a desktop application.
So the bottom line is, the Biggest Web Software Company in the World turned to the desktop in order to make the customers who pay the bills happy!