Just a Personal Point of View
Sales Tactics: Deep Discounting and One Day Sales
27-Jun-2006
by Ellen Craw
A good way we Independent Software Vendors can get a brief increase in our sales,
and add additional customers, is by having one-day, deeply discounted, sales of
one or more of our products.
It's a great way to make sales we otherwise wouldn't. ISVs that will benefit the most are:
- • ISVs with several different products, and who will be able
to sell additional products to newly added users.
- • ISVs whose products are used by businesses (large or small),
who can sell additional copies or site licenses to newly added or existing users.
- • ISVs with several different versions of their products,
who can sell upgrades to more full-featured editions to their newly added or existing users.
In each of those cases, selling a license represents more than just the proceeds
from that sale to the ISV - it also represents potential additional sales.
Assuming your products and your support are good, it's always easier to get
an existing customer to add a product than to get a prospect to become a new customer.
There can be other benefits as well. Any sites, blogs or discussion boards
that cover your sale provide free advertising for you. If your one-day sale
is hosted through or even mentioned on a third-party site, you get exposure
to that site's audience. And a spike in your sales can lead to higher placement
on best-seller lists, which in turn can increase your sales going forward.
A potential drawback is that we ISVs shouldn't do anything that might be
perceived as lessening the value of our products. We don't want to undermine
our credibility with "fake" sales, so that our users or prospects don't
believe our real prices. And we don't want to have deep discounts so frequently
that users never buy our products at full price.
But if we manage the discounted sales carefully, they can bring all the benefits
without the drawbacks. Everyone likes getting a discount, and a big discount will
drive sales we'd never get otherwise. And while we make less money per copy, we
make more overall, as well as getting the benefits of the additional users.
Ilium Software's Experience
At Ilium Software,
we've run two one-day sales in the last few weeks. Both had very good results.
The first was our 9-year celebration, where we discounted all of our major products by about 60%,
selling each for either US$9.99 or US$3.33. The sale ran one day, on our own website only.
We sent advance notices of the sale to any website we thought might write about it.
While we probably sold some units at a discount we otherwise would have sold at full price,
we ended up making almost twice our usual revenue for the week of the sale, and sold
over three times the number of units as usual.
The second was a one-day feature of one of our Windows desktop versions on Bits du Jour.
We sold this for a very low price - US$1.99, where the regular price is US$19.95.
But we sold slightly over 100 units at this price, plus more than 50 full-priced
PDA add-on versions at that same time. We did not advertise this sale at all;
only Bits du Jour users saw it, so I consider all sales we made that day as bonus
revenue (and new users) for us.
While neither of these efforts is going to make a big difference to our revenue,
they both added to our customer base, and probably took some sales from our competitors.
We're confident that we'll be able to sell additional products, licenses and upgrades to
those new users. In addition, the sales put our products higher on the PDA portal best-seller
lists that are an important part of our marketing effort. And we made money from them,
rather than spending the money buying advertising on the portals.
I believe the keys to having this kind of sale be successful are:
- Having a reason for the sale
- Having the sale run for a very limited time
- Running a deep discount no more than a few times a year
Bits du Jour
As well as working with Ilium Software,
I also work with Bits du Jour,
a one-deal-a-day site for downloadable software.
If you don't have a handy anniversary or other excuse coming up, and want to run a
one-day sale, Bits du Jour is a good way to do it. It gives you a way to deeply discount
a product using a third-party site, so you're not doing anything that can be perceived
as lessening your product's value on your own site. We direct all sales to your own cart,
so you don't have to set up any additional processing.
While you don't need to discount your product 90% for it to be successful on Bits du Jour,
we've found that discounts of under 50% don't make many sales. The one exception to this is
when the ISV also promotes the discount to their own userbase.
The Bits du Jour features are the most successful when either:
- The product's one-day sale price is so low that people buy it
almost without thinking. A product priced under US$4.00 is as close to a no-brainer
as we can get; it's less than a cup of coffee at Starbucks. At that price, many people
will buy something on the chance that they'll want it in the future.
- The product's author has a strong userbase, and the author
promotes the Bits du Jour feature to the userbase, as well as offering a discount
of at least 40%. Whether the ISV is promoting a new product or additional copies,
the big discount is an excellent way to get prospects off the fence
about adding licenses.
If you're interested in using Bits du Jour to host a one-day sale of any of your products,
please let me know. I'd be very happy to send more information.
But whether you use Bits du Jour or run the sale yourself, a one-day sale is definitely
worth a try if you want to increase your sales and your customer base.
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Association of Independent Software Industry Professionals
