A New Way to Sell Software

Making Money from People Who Don't Pay

by Sue Pichotta, icons-icons.com

31-July-2006: I recently returned home from a software marketing conference (about the conference). There was one session, near the end of the conference, that was especially intriguing. It was about a way of getting money from the customers who DON'T buy your software. Yes, you read that right.

Alastair Rampell of Rampell Software did a session on how to get money out of people who won't buy your software.

In a nutshell, you set up relationships with companies that will pay you for leads. AOL pays $40 for each person who signs up for a trial membership. The Discover Card pays more than that for each person who signs up and gets approved. There is a wine club that will pay you for each person who signs up.

So, the idea is, you offer the software two ways, the regular payment method, or free for those who are willing to sign up for something.

The sample Alastair (Alex) used in his presentation was his "Did They Read It" software, which sells for $24.95. If someone wants to buy it but doesn't want to pay for it (or can't pay for it), they can sign up for something else (like a free AOL trial, or a credit card, or a wine club), and get the software for free.

Alex showed a chart of his revenue for this product, regular sales and incentive sales (or incentive payments received, if you will). His chart showed a solid, stable income for the last three years for regular sales of this product. And it showed growing income from the incentives, to the point that now, incentive sales have grown to equal 60% of his regular sales.

That's almost free money, as I see it.

Now, there are lots of caveats. You have to match the offer to the product's likely demographic. You have to match the offer to the prospect's geographical area (some offers, like AOL service, are available only in certain countries). You have to match the value of the offer to the value of the product.

He said, for instance, that the "AskJeeves" toolbar will pay something like $2 for each installation. Well, obviously, that's not exactly a fair price for his $25 product. However, he does display that offer for some poorer countries that don't have many other options for incentives, and for those who take it, he is happy to get the $2 from AskJeeves, figuring that is $2 more than he would have had. He said that particular incentive is not common, though.

An important note is that you don't display these offers to paying customers. You make these offers only to people who are probably not going to pay. For instance, Alex makes these offers when the user is uninstalling the software, and at other times, as well - but only when he is fairly sure that they are not going to pay for it the normal way.

Of course, there is also all the back-end technical stuff to be considered as well. You must be able to pass/get/collect customer information, to know that the customer has successfully done whatever needed for the incentive payment, etc. But... for an increase of 60% in income, it's certainly worth looking at, IF you think this kind of thing will suit your market.

And, in fact, Alex is planning on offering a new kind of service or software or combination to make it easy for people to implement his (or similar) incentive scheme. It will be titled TrialPay. He doesn't have all the details worked out yet, but he says it will be available soon.