Distribution Channel Management for software products

For a software company the distribution of its software products is a very challenging job. The Internet is offering unlimited opportunities but is opening many doors also for the competition. As a company director, I am sure that you are questioning yourself everyday what you need to do to keep (or target) the leader position.

The modern strategies include these days channel distribution strategies such as exclusivities for resellers, local market prices, marketing development funds and local brand development strategies. How to manage all these? How to protect the channels? How to improve the channels? How to define new channels? And, very important, how to measure all these parameters?

All these challenges will be discussed on Thursday, June 18th on a webinar hosted by my colleague Casey Potenzone (VP US Sales) and our partner Ken Beam (President, VAR City). The webinar is called “60 Minute Crash Course on Channel Management” and the registrations are open (and free):
http://www.avangate.com/webinar/software-channel-management-2009.php

Njoy!

How is the software channel coping with the crisis

Avangate is doing a survey on how the crisis is impacting the channel distribution in the software industry. If you are:

• an ISV using a partner network or
• a reseller in the software industry,

take our brief survey and become part of the study – find out how your own challenges and solutions regarding the channel compare with those of your peers. Read more here: http://blog.avangate.com/software-channel-crisis/

THANK YOU!

Internet marketing from Avangate

I was recently asked how can we help a small company to promote its products. Suddenly I realized that there are so many marketing channels available from Avangate that can boost the product exposure very effective.

I will not talk about our webmarketing services which are tremendous (but also they are not free) but I will talk about all tools that are bundled with the e-commerce platform.

PAD Promoter
Avangate is offering a very efficient service by submiting a product PAD file to certain popular websites (such as downloadpipe.com, fivesign.com, etc). And yes, it's free :)

Google Base
Avangate is submitting on a daily basis your selected products to Google Base. Thus, you will receive an incredible market exposure to millions of potential customers.

Affiliates network
Thousands of affiliates are ready to sell new products. Not being a popular product there must be other ways to convince the affiliates to put it in front of other products; you will ask how. Now is depending an everybody sales talent but I would say that in all cases an offer that cannot be refused will win; and am not referring to Godfather's movie now but to money. Giving a big discount to affiliates can convenience them to make some easy money :)

Besides these free tools, Avangate can introduce you to additional marketing channels like Bits du Jour (which will sale the product with a great discount for one day), Giveawayoftheday (which is offering the product for free but for a different SLA, aquiring thousands of new customers and generate new revenue channels on them), SoftPressRelease.com (which is offering great discounts to all Avangate customers for the PR services).

At the end but not the last will be the Account Manager assigned for each vendor account. The consultancy services are included and coming from an e-commerce expert the benefits are obvious. Just log in to your Avangate account and start your Internet marketing plan :)

P.S. New customers can also sign up for an account :)

How to make 10,000 bucks

We will make a very simple math exercise today.

Let's suppose that your sales are going quite well for the summer time. Let's say that at the end of the day you have an average of 100 daily sales; in 30 days you will have 3000 sales; let's suppose that the product costs 29 bucks; that means that at the end of the month you have 87,000 USD in sales; applying the standard 8% processing fee will result in a 80,040 USD in your pocket.

Now, the little question is how can you generate more revenues with the same number of customers :)

The answer is quite simple: by selling additional services. For a small amount the customer can opt in to receive a backup CD along with the order or he can obtain to increase the download availability for 24 months. Now, adding a small profit of 5 USD on top of 70% of your existing 3000 sales, the final profit will be 90,540 USD - meaning that an additional 10,500 USD monthly profit just came up :)

Happy 1st of July

Today was a tremendous day for the Avangate platform. We released a lot of advanced new features:

• license lifetime for pricing options
• recurrent payments for American Express payments
• PostePay payment method for the Italian customers
• new information included in the IPN: sales costs for each product - for advanced integrations
  

What are the major benefits? The software industry is based on the "license" keyword. With Avangate the second keyword can be "imagination".

A software product can be set to be sold in a many combination by using the pricing options schemes, recurrent payment and the most advanced license management platform: buy for 1 month of for 12 months, for 5 users of for 10 users, with gold or platinum support, for MAC of for Windows platforms, etc.

Imagine how complex can be your offer now based on only one product :)

I dedicate this day to our development team. Congratulation guys!

Increase software downloads

The software industry has three major points to measure the success of the products:

• number of downloads
• number of licenses sold
  

We will address today only the first point: number of software downloads. What are the key factors that can affect these downloads?

Our webmarketing team released again a great article regarding how to increase the number of the downloads for a software product. The main factors are:

1. Let users know what they are downloading. Don’t surprise them!
2. Suggest the action: Download versus Try label
3. Don't ask for user details (or do it in an elegant manner)
   
4. How to handle a potential customer if interested
5. Get proactive feedback
6. How to manage the uninstall process

The entire article can be found on the Avangate website: The 66 Route to Selling Software Online

Enjoy!

Measure the performance of your eCommerce provider

During the globalization process, almost any software vendor outsourced the ordering process for his software products; thus, the electronic software distribution (or ESD) become a very tough niche for all companies which are providing this kind of services.

Outsourcing the entire ordering process will cut the operational costs bringing specific services such as multi-language, multi-currency, 24x7 support, etc. I will not dwell on outsourcing benefits here but on how to measure the performance of your e-commerce partner. In order words, what is the performance ratio of your ordering system and how to measure it?

A very basic method is to compare the number of visitor you have with the number of completed orders but this is a very primitive method.

A most suitable method is to create a script which will handle any redirect from your website (e.g.: mywebsite.com/buyredir.php?product=ABC&vendor=Avangate). At the end of the week the consolidated reports will show the number of redirected users vs number of completed orders.

Using such measuring system, you can see at any time how your ordering system performance is affected by the prices, website design or your e-commerce platform, helping you to take the best decisions for your business.

Notes:

• a "user" means an unique session redirected to the e-commerce provider
• in case that you are using more than one e-commerce provider, for the same session the shopper must be redirected to the same ordering system
  

Enjoy :)

P.S. Having more that one e-commerce provider can confuse your customers but we will talk about this in further discussions.

Quick guide: Instant Payment Notification

Avangate has a very "sexy" feature called IPN (Instant Payment Notification). For every approved order, the software vendor can receive to a specific URL an automated confirmation containing all order information (order details, products sold, customer data, etc).

What can you do by using IPN:

• add order information to internal database
• add license to an internal application
• create specific tasks (custom emails, specific alerts, etc)
• etc (read: "use your imagination")
  

Every time when a colleague of mine or a software vendor asks me if it's possible to implement a specific action when a order occurs, I am getting a smiling face and I am giving the same answer: "Of course, you can do everything you want by powering the IPN feature" :)

P.S. I am writing this post to send a quick link to all related feature questions.

Avangate promotes e-commerce services in USA

Avangate attended Microsoft Worldwide Partner Conference. The overall feeling is that the conference is a "place to be" for any software business company. The audience is from Microsoft integrators/developers area and the first objective for everyone is to make a good business.

Avangate made a star from the myAvangate platform (Reseller Management System) by promoting the most powerful sales concept these days: combining the online sales channel with classical distribution channels.


SIC 2007
Avangate had also a good presence at SIC 2007 (also by sponsoring the conference). The conference is also a "place to be" for every software business or service provider for this area.


In my opinion the conference is still in the beginning stage. The majority of the people are from the US but the international presence seems to grow from year to year.

The conference is a great opportunity to build new partnerships, to discover new business concepts and to promote your products or services of course.



Adriana had a very good presentation about "Web metrics". The audience learned how to "read" the business behind the numbers showed by any website tracking system, how to calculate and interpret the bounce rates and conversion rates, etc.

Affiliates - a questionable business

The affiliate concept seems to be a revolutionary way to expand your business but if we are looking at what is happening in the real world we will see that the market is full of useless affiliates.

Everyday we are receiving spam from affiliates that are waiting the sales to happen or we are landing on websites made by some affiliate that doesn't care if the products he is promoting will be sold or not. Why did they do that? Because it is free! It cost them nothing to get the affiliate statute. At this point starts your role to sort out who you are doing business with.

Looking to the software industry I can say that these affiliates are more than useless; they spoil the "free to try" concept by adding thousands of download portals that are not helping the users at all but confusing them.

Of course, we have hundreds and hundreds of affiliates that are doing a great job. They are 100% involved in promoting the products and supporting the potential customers; the sales are going very well and everybody is happy! Our duty is to improve the relationships with these real affiliates and to ignore the rest of them.

In my previous article about the affiliates business I spoke about how to improve your sales through the affiliates channel.

In conclusion, the affiliates business can be a very good sales channel if we are permanently paying attention to the business relationships and we are not happy just to have thousands of affiliates (but doing nothing for real for our business).

When did you contact the last time your affiliates?

Referrers Tracking System

Avangate released the Referrer Tracking System: any developer can add a small JavaScript code into his website and he will start to track all referred customers. All referred sales will be reported by Avangate; thus, the referrer efficiency can be calculated in seconds.

Bellow is the visual representation of the system.

Avangate released today the Dutch language

We are proud to announce that the Dutch language is available for all Avangate customers. More details are available in the Avangate Control Panel.

Maybe you wonder why Avangate invests in platform localization? From our internal reports we noticed that the customer confidence can boost the finished sales from a specific region with up to 34%. Of course, there is always a balance between localization and profitability...

Dont' throw away your customers

Every day I am visiting a lot of websites and mostly the ordering pages; I can say that there are some webmasters that are totally ignore the customers they are serving.

For example, today I saw an ordering form which have the default quantity as zero ! Why would someone put the default quantity as zero? Believe me that I cannot answer to that question. Or maybe they really want to spend some money for a professional user testing service.

For all these king of webmasters, I have an advise: build the website and keep in mind that the website may be accessed by your grandmother (in this way, the usability is guaranteed)!

Don't lose your possible customers

The order page can be built in many ways but it should have some specific elements: product name, order options, prices and the action element. I saw a lot of ordering pages and I will not talk at this moment about how to make an order page but how to use the action element.

The action element can be a link or a button or both. Today a saw an ordering page from a respectable company with all classical e-commerce elements implemented but with a very strange action element: a circle button before the product name:

Where is the action element here? Come on…you have a possible customer, you want to get the order and the only element from the whole page is that grey button? What about this little change:













I bet on this change and I am sure that the sales volume will increase with a minimum of 15 percent. What do you think?

Cross Selling benefits

The last Avangate newsletter have a very nice cross-selling tip: Cross Selling benefits

"Implementing Cross Selling schemas into your selling mechanism can have a major impact on maximizing your profits with a minimum effort!

The Cross Selling feature works as a suggestion box. Each time a customer adds a product into the shopping cart, the system displays a list of up to five complementary products that can be also added into the shopping cart without spending additional time on searching for these products.

For example, if the customer adds an Antivirus software solution into the shopping cart, the system can be configured, via Cross Selling feature, to automatically suggest complementary products such as extended Virus Definition Databases, Firewall solutions or Spyware Protection Software.

This is a great way to improve both customers' shopping experience and profits without using an aggressive selling method or appear intrusive to customers.

The Cross Selling feature is accessible from the "Marketing Tools" tab within the Avangate Control Panel. Please read the explanation before starting configuring the Cross Selling experience!"

I think that Cross selling is a great tools and it must be used by all software vendors for their ordering process. Of course, there are a set of rules that must be applied: be relevant, be natural (don't add a lot of buy options because you will risk to lose the customer focus) and set fair discounts.

Renewals management

In the software industry the most important asset is the customer. If you know your customers (yes, many software companies doesn't know their customers) and you serve them to make them happy, then you can say that you have a successfully company.

Avangate is launching the "License management" module which is a big plus for software vendors who will have a big number of returning customers (and a good management console for sold licenses of course).

I wrote this post to underline the concept of a renewal system versus a recuring payment system (which is a good system for services not for software products). Many vendors will threat the renewal system as a recuring payment service but thet are wrong, totally wrong.

I hope that this first message will be a good start for this blog :)