

Photo by Daquella Manera

This post is an adaptation of a portion of my 2010 Business of Software talk. Special thanks to Zuly at Light Point security for her detailed post that helped fill some of the gaps in my memory.

What’s the #1 goal of your website? Ask this of 10 software entrepreneurs and you’ll hear the same answer 10 times: the #1 goal is to sell software.

It’s a nice guess…but it’s wrong.

The #1 goal of your website is not to sell software. Not unless your purchase price is less than the “impulse” price point of around $20. If it’s above this mark then most people will not buy on their first visit to your website.

And if you pressure them with heavy-handed marketing, you’ll give them an inexplicable feeling of pressure and discomfort. Asking someone to buy before they have confidence in you or your product is a recipe for abysmal conversion rates.

The ineffective marketer asks you to buy too soon.

And by “ineffective” I mean that no one buys from them. This is the same guy who asks you to buy life insurance the first time you shake their hand at a party, or posts affiliate link after affiliate link to their Twitter stream. Unfollow.

Very few people will spend more than around $20 the first time they visit a website. As you move into (and beyond) the $30 range your conversion rates drop dramatically on first time visitors making a purchase. In this case, you need them to come back to your website multiple times in order to close the sale.

Why People Don’t Buy

There are five basic reasons people don’t buy:

They need more information (does it have the features I need?) They don’t trust the product or company They don’t have the budget They don’t need it yet Never going to buy (just researching)

We can’t change #5, but the first four can be changed over time through repeated contact. In fact, looking at how many obstacles people have to overcome in order to make a purchase, it’s amazing anyone buys on their first visit to your site, at any price point.

I’m a Numbers Guy

I have an expression I like to use:

Data is my co-founder

Since I’m a solo founder I can’t rely on a conversation with my business partner to help make things clear. I have to rely on data to guide most of my decisions.

So let’s take a look at some numbers to try to back up this assumption that people don’t buy on their first visit to your site.

There’s a common misconception that your conversion rate is a single number. The single number people talk about – that magical 1% number – is actually an average of all of your individual conversion rates.

So let’s break that average up for a few actual products:

Over a three-year period, DotNetInvoice made 450% more sales to returning visitors than first-time visitors

Over a one-year period, JustBeachTowels (a website I used to own) made 770% more sales to returning visitors

Over about a three-month period, AWPCP (an Academy member’s product) made 400% more sales to returning visitors

Over a 60-day period, CrazyEgg made 1585% more sales to returning visitors

As an aside: you should absolutely be tracking these numbers on your own site. It’s as simple as setting a purchase goal in Google Analytics. It takes 30 seconds and will provide you with some of the most actionable data you can glean from an analytics package.

Is This Proof That Returning Visitors are More Valuable?

Of course not. Proof would require reams of data and more processing power than a Knights Ferry.

But it does provide a good rule of thumb that you should use to examine your own sales patterns. In my experience selling this holds true in almost every case.

The other shocking fact, when coupled with the above, is that the vast majority of your website visitors are first-time visitors. Typically 80% or more. Egad! Do you realize what this means?

It means that your largest pool of prospects is hitting your website and taking off without returning. But the portion of them who return are much more likely to buy your product. According to the numbers above, they are 4-16x more likely to buy.

Ok, Then What’s the Real Goal of My Website?

Your goal should be to get first-time visitors to come back.

And not just come back, but have repeated, “confidence building” contact with your company or product. It’s not your job to shove your $300 product down their throat on their first visit, but it is your job to convince them that coming back is worthwhile, and to help them overcome the four objections I listed above during the process.

How can you do this?

You could use RSS, Facebook, YouTube, LinkedIn, Twitter, or email. All are good options, but each has its flaws.

RSS for example, is used by a very small percentage of Internet users. Extremely small. Ask your mom what RSS is and she’ll tell you it’s an acronym for a hallucinogen she tried in the 60s.

Facebook, YouTube, LinkedIn and Twitter are all new, hip, and cool…but a 5,000 person following in any of these venues is worth much less than a 5,000 person email list. Email has so many things on its side:

Ubiquity

Less time commitment needed to maintain it

Highest click through rate of all options

You can control what each individual user sees on any given day

For all its foibles, and all the techie hatred of email, it’s still head and shoulders above any other way to connect with most of the online world. My mom barely has a Facebook account, never goes to YouTube, has never hear of LinkedIn and only knows Twitter from TV shows…but she’s been on email every other day for 10 years.

Don’t convince yourself that just because you don’t like email that the rest of the world feels the same way. It’s not the case.

Social media routes (including blogging) are all fantastic avenues for building an audience. And if you have the time, tools and talent to make it happen then by all means get to it! But if you want the fastest, optimal way to connect with most audiences, it’s through an email list. Email should be your first goal, with social media approaches coming once you have this cornerstone cemented in place.

So how can you get started gently engaging customers through email in a way that won’t commit you to spending hours every week managing and creating new content for it?

Step 1: A Killer Landing Page

People don’t like to give out their email. You have to first build enough trust that they are willing to provide it. The easiest ways to build confidence are through solid web design that puts the email sign-up for at the forefront of the page, or by providing information that shows you are an expert.

Examples of solid web design that give you confidence you’re not going to get spammed are here and here. Notice the prominence of the email sign-up forms.

For a visual look through tons of landing pages (both good and bad), try this Google image search.

Step 2: Give Something Away

You can give away an 8-12 page PDF report or whitepaper. This works, especially with a great title “6 Things You Must Know Before Implementing a CRM System” or “8 Expert Tips for Working with PDF Documents.” These will convert and they’re a good start.

But the key to high conversion rates is doing something unique.

Jumpstartcc.com‘s PDF is awesome. I didn’t even need the information it covered, but the design is so freaking cool I downloaded it anyway. This spread virally and sent a lot of traffic to this landing page.

Smart Bear gives away a hardcover book written by Jason Cohen. Their cost is down to $5 shipped and they send out 1000 a month. How would you like to go out on a sales call and have someone pull out your book during the meeting?

Step 3: Automate Your Follow-up

Finally, set-up an automated follow-up sequence. This is a short series of emails that’s sent to the subscriber over the course of a few weeks or months that provides information, perhaps a discount, and builds trust in your product.

After using four email service providers over the years I am a firm fan of MailChimp due to their superior feature set, reliability, and customer service. They also have a free trial that allows up to 1000 subscribers so you have a long runway before you have to pay them a dime.

I’m not going to go into the specifics of setting up a subscriber form on your website since it’s essentially copy-paste of their HTML into your web page, but once that’s in place you’ll want to setup an auto-responder that provides valuable information a new subscriber at regular intervals.

What kind of intervals, you ask? Let’s take a look at two follow-up sequences that have worked for real software products.

Collectorz.com ran a split test on requiring an email before downloading a free trial, and not requiring the email. The process is documented here, but the summary is they sent a 4-step follow-up sequence to anyone who provided their email:

Day 0: Welcome, $5 discount coupon, download link, link to Getting Started guide, testimonials.

Welcome, $5 discount coupon, download link, link to Getting Started guide, testimonials. Day 2: Buying guide, standard vs pro, barcode scanners, iPhone app, testimonials.

Buying guide, standard vs pro, barcode scanners, iPhone app, testimonials. Day 6: Subscribe to newsletter invitation, benefits of cataloging your stuff, testimonials.

Subscribe to newsletter invitation, benefits of cataloging your stuff, testimonials. Day 30: Outright invitation to buy, more testimonials.

And collecting emails resulted in the following:

#Downloads: down by 33.6%

down by 33.6% #Sign Ups: up by 20.7%

up by 20.7% #Sales: up by 3.4%

up by 3.4% Average First Purchase Value: up by 13.5%

up by 13.5% Profits: up by 15.4%

In a second example, software vendor SolarAccounts increased sales through the same process, documented here.

To summarize, they sent two emails over 14 days:

Day 0: As soon as the user downloads the software, we send an email saying, “Thanks for downloading – here is a useful How-To guide”

As soon as the user downloads the software, we send an email saying, “Thanks for downloading – here is a useful How-To guide” Day 14: Two weeks later we send another email (if they have not opted out) asking “Did you like our software?”

The results?

15% fewer downloads

18% increase in sales

Do these two split tests unequivocally prove the point that asking for an email and reminding prospects results in higher revenue? Nope.

But it has to make you curious to the tune of the couple hours it takes to run your own split test using Optimizely, Visual Website Optimizer or Google Website Optimizer.

It’ll take a few hours of work over the course of a few weeks, but the odds are good you can increase sales by 10% or more based on the examples above, and experience with my own products.