The Life-Cycle of a Software Product: What You Need to Know
The product life-cycle refers to the stages products go through from their first appearance on the market until they are no longer available. Every product has a different life-cycle, but this post focuses on software products.
To create an effective marketing strategy for your SaaS you need to understand how users interact with your product at each stage of its life-cycle and what impact that interaction has on the revenue you generate. This requires knowing where your customers come from, what behavior they have at each stage of their journey using your product and figuring out where they churn.
Before You Launch Your Product…
It is tempting to focus all of your attention on getting new customers when launching a new business or trying to make an existing product more successful and less frustrating for users. However, understanding the whole life-cycle of your software is essential to maximizing your revenue and increasing your chances of success before you launch.
Before you even get started on developing a version 1.0 it is important that you define your target customer and map out all possible use cases for how he/she will be using the product. This becomes especially important when preparing yourself to answer questions such as ‘how many paying customers do we need’?. These figures help you calculate how many users you need in order to break even or make a profit that can sustain future development, marketing activities etc..
Once this number has been determined it is important to reach out to your potential users and ensure that there is a market for the product you are developing. This step is often referred to as pre-selling or an ‘early adopter campaign’.
When it comes to acquiring early adopters for your product, your existing user base can be invaluable. You should try pitching them on helping you test out new features, give feedback etc. If you don’t have a list like this then using services like BetaList allows you to reach out to people interested in trying new products before they’re available to everyone. Additionally platforms like Product Hunt provide another avenue through which you can attract early adopters by launching on their platform (for free). Both services typically require submission of some kind (blog post, screencast etc.) but this is typically seen as an investment worth making.
You may wish to consider running a crowdfunding campaign before you launch on more traditional marketing channels like Adwords or Facebook. Although it can be demanding on your time, launching with some money in the bank allows you to focus on your pre-launch marketing efforts without the pressure of spending so much of your own time and effort fundraising.
The Launch: New Features & Getting To Critical Mass
Once you’ve launched your software product you will want to start converting users into customers. This involves introducing them to new features that they didn’t understand previously existed and ultimately convince them that paying for the product is worthwhile. According to Andrew Chen, it can take 5-7 launches before you start seeing significant growth in your user base.
It is also important during this phase that you work hard to retain users and to prevent them from becoming dormant. This means ensuring that any negative feedback or issues are resolved as quickly as possible. Solving these problems isn’t always easy, but could be the difference between someone staying with your product or turning into a churned customer (which will cost you more time and resources than quickly remedying the problem). It’s worth looking at John Turner’s book ‘Turning Browsers into Buyers’ for some insights on how to solve these common problems without alienating your customers. There are some great case studies in this book that provide insights into how to approach these problems. I also recommend watching his talk on ‘Lifetime Customer Value’ which provides insight into other factors that can influence your chance of retaining or losing customers.
When launching you typically want to reach out to as many potential users, channels and communities as possible (social media, blogs etc.) The aim is for the amount of additional users you acquire through all sources combined equals the number of new customers (not total signups). Additionally it’s important during this period to engage with people who are currently using your product or have reviewed/mentioned it online. This will help increase further awareness about your product and hopefully lead to more positive reviews/mentions which can ultimately be used to convince other potential users that your product is good.
A typical example of software launch/marketing activities would be split into 7 phases:
#Phase 1 – Pre-launch activities i.e. getting ready for the launch
#Phase 2 – Hand pick/reach out to press outlets to cover the launch event + why it’s worth paying attention
#Phase 3 – Ensure the launch of your software is properly announced, capturing potential customers at this critical time period
#Phase 4 – Continue to encourage people who have signed up for notification when the product becomes available
#Phase 5 – Introduce new features that weren’t available during the beta phase. This helps ensure users remain interested in your product and prevent them from becoming dormant.
#Phase 6 – It’s important to keep working hard to acquire more user/customers (even if you’re nearing 100k users) because it can take 5-7 launches until you hit critical mass.
#Phase 7 – Once you’ve reached significant scale, i.e. 10 million or more MAUs, the focus should now be on retaining existing customers and increasing customer retention.
A good way to increase the number of people using your product at launch is by creating awareness about it before it’s available for use. This can be done through blog posts showcasing features, pre-announcing new updates or even encouraging users to sign up early so they can test out a new feature as soon as it becomes available. A few methods you could use to achieve this are:
- Blog posts on your website highlighting how the new feature/updates will make their life better i.e. how many more customers you’ll be able to help or some other compelling reason why a user should stay interested in the product after its launch.
- Invite applications from beta testers and highlight why they would be a great candidate (if you think it will benefit them and your product).
- Give users the option to sign up early for notification when the product is launched or maybe even offer some early access.
- Provide incentives to those who refer others to your launch, e.g. 1 month free subscription or other free features/upgrades that aren’t available during the beta testing phase.
In addition to these activities once you have launched it’s important to build awareness about the existence of your new software as well as enhance its visibility over time i.e. by engaging with people online through social media sites, forums, communities etc.; ensuring positive reviews appear on review etc.. Some ways you could do this are:
- Update your Launchrock website to describe the product and link to a more detailed description of it on your new website.
- Engage with people discussing features of your product, ask them if they have any questions about it or even shout out thanks for mentioning your product online.
- Add a link from your home page/product landing page direct users to download the software as well as some user testimonials, both these will help increase awareness about the existence of your product as well as improve conversion rates from visitors into leads/paying customers.
- If you have a blog on your homepage make sure you post regular updates introducing new features or addressing common questions/query which could sway customers into using your product.