Our Collectorz.com online media database systems use Amazon searches as a fallback, only for items that are not in our own databases yet. Users of our Windows or Mac software can use that downloaded data (*possibly* containing Amazon data) for cataloging their CDs, DVDs, books or video games. Then, if they also have our iPhone app, they can export the data to the mobile device. Our iPhone apps do not access the Amazon data feed directly.

But last week, I received an email from Amazon, saying that we must stop using Amazon data in mobile apps, because it is a violation of their agreement. Or else they would turn off our access to the Amazon data feed. So to play it safe, we removed our iPhone apps from the App Store.

What’s Next

Of course, I tried contacting Amazon to discuss the issue, but it took 10 days to get someone on the phone (see below).
In the meantime, I found that Bruji (one of our competitors and the creators of PocketPedia) had received the same email and had an unfruitful phone call with Amazon a couple of days later:

Amazon made it clear that they are not okay with Pocketpedia2, even though it censors their data. We were told that even the most common of attributes, the title, cannot be synced to a mobile device.

That didn’t sound like there was much hope we could modify our iPhone apps to meet Amazon’s demands. So it slowly dawned on me that the only solution would be to stop using the Amazon Product API in all our products. Mobile applications are a big part of Collectorz.com and they are only going to be more important in the future. If we cannot do mobile apps while still using Amazon data, then Amazon will have to go.

So a couple of days after Amazon’s cease and desist email, we started on a huge project: Making Collectorz.com Amazon-Free.

My phone call with Amazon

Finally, last Thursday I was allowed a call with “the powers that be”. Here’s a summary of my conversation with two very reasonable guys at Amazon:

Alwin: What exactly is the nature of the problem, as we are not directly using the Amazon Product API from the iPhone apps?
Amazon: Any usage of Amazon data on mobile devices is not allowed. We can’t tell you why, that is just our policy.

Alwin: No problem, if that is your policy, then we will have to deal with it. So does that mean that the only solution would be to either stop doing mobile applications OR stop using the Product API?
Amazon: We don’t need you to stop doing iPhone applications, but you just cannot use any Amazon data on them.

Alwin: Okay, but then for us, the only solution is to stop using the Amazon Product API altogether. Can you please confirm that once we completely stop using the Amazon Product API, we can put our iPhone apps back in the AppStore?
Amazon: Yes, if you do not use the Amazon Product API anymore, you can put all iPhone apps back into the App Store.

Alwin: Great, good to hear that. Now, would it be possible to address this problem per program? For example, if we stop using the Product API for movies, can we then bring our Clz Movies iPhone app back to the App Store?
Amazon: Yes, that would be possible, but we *will* verify that you are not doing any searches in the Movie category anymore. We can track that on our end. But please make sure that you will stop ALL Product API searches as soon as possible.

Alwin: We will probably be ready to stop Amazon searches for movies and games next week. Implementing alternative sources for books and music will probably take longer, say about six weeks. Is that okay?
Amazon: That is okay.

Alwin: Thank you. Can you please confirm that you will keep our Product Access Key enabled during this period, while we implement alternatives?
Amazon: Yes, we will keep it enabled. As long as you don’t suddenly start doing more searches to populate your own databases. Please know that we will closely monitor your API usage.

Alwin: That will not be problem. You will probably see the number of searches decrease next week, maybe even tomorrow. One final question: would it be possible to re-open our Associates accounts? Our users like getting the Amazon links, so we would like to keep delivering Amazon links in our software and on our website (and of course make some money from the affiliate fees).
Amazon: Yes, we can do that. Please email us with the details and we will re-open them. Also, please email us your plans and planning and keep us posted on your progress.

Alwin: I will.

A good conversation IMO. These guys were very reasonable and clearly willing to help us resolve this problem. I am also happy to receive confirmation that our Amazon-Free strategy is accepted as a good solution and that we can tackle the issue one program at a time.

The Amazon-Free Project

Sooo… we’ve got some work to do… My guess is that the entire Collectorz.com team will be working on this Amazon-Free project for the next couple of weeks at least, probably longer. We will be removing all usage of the Amazon feeds from our online database systems, and replacing it with alternatives where needed.

For Movie Collector and Game Collector, we aim to be Amazon-Free within a week from now. Our online databases for movies and games are pretty complete already, we only used Amazon searches there as a fallback datasource, for barcodes that were not in our own online database yet. We are now adding a couple of freely available lists of DVD and Blu-Ray barcodes. Plus we have implemented a new tool in our content management system that lets our admins spot and add popular missing barcodes with just a few clicks.
If all goes well, I expect to re-launch our iPhone apps for movies and games in about 2 weeks. The Clz Movies app is the most popular by far, so that will return most of the App Store profits as well.

For Music Collector and Book Collector, we are more dependent on Amazon searches. So we will have to add complete alternative sources for barcode lookups and cover images. This will be a lot more work and thus take longer (4 weeks? 6 weeks?).

All other projects we were working on have been put on hold at the moment (Connect editions for music and comics, major upgrades for Movie and Book Collector, small Mac updates, etc….). All of us are working to free Collectorz.com of Amazon.

But can you imagine how happy I am that we started to create our own online media databases 5 years ago? Best idea ever

Subject: Your Amazon Associates Acount

It has come to our attention that you have created applications for use with mobile devices which use Amazon.com content. The use of a mobile application in conjunction with the Product Advertising API or the Associates Program without our express prior written approval is not permitted.

As a result, we must insist that you cease this use of our services immediately. Moreover, because of this violation of both the Product Advertising API License Agreement and the Associates Operating Agreement, your Associates accounts have been closed and your access key turned off.

We thank you for your understanding and wish you the best of luck in the future.

And indeed, in Amazon’s Terms of Service for the usage of the Product Advertising API, we found the following:

“You will not, without our express prior written approval requested via this link, use any Product Advertising Content on or in connection with any site or application designed or intended for use with a mobile phone or other handheld device.”

So, what does this mean?

Well, I am not sure, as the only information I have at the moment is in the above two quotes.

But here’s my understanding of the situation:

• Amazon does not seem to allow the usage of any Amazon data in mobile applications. They must be referring to our iPhone applications, but it’s not even clear which ones. I am guessing Clz Music, Clz Movies, Clz Books and Clz Games. Our comics app Clz Comics does not use Amazon data and never has.
• Because of this violation, they have “turned off our access key”. This means that they have blocked our access to all Amazon XML feeds. Which would mean our software and our servers cannot do ANY Amazon searches anymore.
  At the moment, the Amazon searches still seem to be working, but I expect this to stop functioning any moment now.

Our actions so far:

To (hopefully) prevent the disabling of our access key for the Amazon feed:

• We have removed all our iPhone apps (except Clz Comics) from the Apple App Store. I have no idea if they will ever be back. Time will tell.
• We have contacted Amazon to let them know about this removal, requesting that they keep our access key enabled and re-open our Associates accounts.
• We have emailed all our existing customers, telling them about the removal of the iPhone apps and the possible disabling of the Amazon searches.

We are not the first: Delicious Library and PocketPedia

I just learned that we are not the first to have our iPhone apps pulled because of using Amazon data. The same thing seems to have happened earlier, to both the Delicious Library iPhone app and the PocketPedia companion app for Bruji’s [..]pedia software.

And now ?….

And now we wait.
Currently our Amazon searches are still working. That’s my biggest concern. Over the years we have build pretty good online media databases of our own, for CDs, movies, books, comics and video games. So our Windows, Mac OS X and online Connect editions will continue to work, even without Amazon data. Maybe with reduced coverage for barcode searches, but even that is something we can improve on (with a lot of manual labour).

As for our iPhone apps.. Well, it was fun while it lasted. Maybe we can bring them back later, modified to never use Amazon data or images.

Anyway, I will keep you posted on the developments.

Don’t bother protecting your software against piracy. Your software will get cracked anyway.

If your software is protected, it will only take slightly longer before the cracker publishes his crack. Making the cracker’s life harder has no effect whatsoever on the number of users that get access to a cracked copy of your software.

In any case, don’t let piracy irritate you, drain your energy, waste your time or take away your focus from the important stuff: Improving and selling your software.

Well… I changed my mind…

Armadillo

I must say that my frustration with software protection was based on using Armadillo (now called SoftwarePassport). We have used it on and off for a couple of years. And each time we tried using it again, we immediately got complaints from users that the new build was suddenly slower or that it just crashed very often. Others even reported that the new build just refused to start on their machine.
Customer support was a nightmare: for every weird bug that was reported, we found ourselves wondering: Is this really a bug in *our* code, or is it caused by Armadillo again.

Also, our software got cracked anyway. For most new versions it took about a week before a crack was released, whereas unprotected builds got cracked within a day.

So we stopped using Armadillo and just released unprotected executables.

Themida

Anyway, after posting the above article, I received a lot of reactions.
Some of them proving my point, as they showed some developers can *really* get worked up about their software being pirated
But others suggested that I should take a look at WinLicense / Themida.

WinLicense is a full software license control and software protection system. Themida is just the software protection system. We have our own license key system that is fully integrated into our customer database and ordering system, so WinLicense doesn’t apply to our situation. Themida sounded great though, so I decided to buy a copy and test it.

Software Protection Requirements

First, here’s my set of requirements for a good software protection solution, in order of importance:

1. Must be quick to implement and hassle-free
2. Doesn’t cause weird crashes or other bugs
3. Doesn’t cause conflicts with other software (virus scanners, firewalls, etc..).
4. Doesn’t impact performance
5. Makes it hard or impossible to crack the software

I still want to spend as little time as possible on piracy protection and I don’t want any negative side-effects.

Testing Themida

In the first week of October, we released Themida-protected builds of both Music Collector and Book Collector. After these releases, we started closely monitoring support tickets and our forum for reports of strange behaviour, crashes, conflicts, etc… And of course, I kept an eye on new cracks being published (I use Google Alerts for that).

After a week, we had not heard of any problems from our users. Which is a good sign, because usually, if there’s something wrong with a new build we know within a day (having a lot of existing customers has many advantages).
And I could not find any cracks of the new versions either.

A couple of weeks after these releases, there was a forum post from a developer (and Book Collector user), who found that Book Collector refused to start while Sysinternals Process Monitor was running (”A monitor program has been found running in your system”). One other Book Collector user confirmed he had the same issue.

A week later one other developer (and Music Collector user) reported a similar issue with Sysinternals Process Explorer. He was quite angry though:

My current version of Music Collector (Version 8.7 build 1) refuses to
start due to this Themida technology, which I assume is newly included
in it. For the first time ever, I’m getting this error on program
launch: “A monitor program has been found running in your system
Please, unload it from memory and restart your program”.

Why doesn’t Themida identify the app that it thinks is a monitor
program??

I’m pretty sure from web research that it has a problem with
Sysinternal Process Explorer–is that true? If so, let me tell you
that that is COMPLETELY UNACCEPTABLE! I’ve been using PE forever, and
I have it set to replace the Windows Task Manager, and I also have it
launch during Windows logon so that it’s pretty much always running.
Disabling it and rebooting every time I want to run Music Collector is
ridiculous.

I’m a developer and need PE. Furthermore, Windows is often unstable
and I use PE to resolve problems; I’m sure I’m not alone in this. If
this is the app that Themida is complaining about, then you’re forcing
me to stop using one or the other, PE or Music Collector. Why??

I need an answer before I reluctantly uninstall Music Collector
forever.

And that was it. No other conflicts with virus scanners, firewalls or anything. No weird Access Violations or other strange crashes. No reports of our software taking a long time to start, or performing slower than before.

And still no cracks.

Final test: protecting Movie Collector

After the successful test with Music Collector and Book Collector, it was time to go for the big one: Movie Collector.
Movie Collector is our most popular program, with the largest installed base. Plus it has always been very popular in the pirate scene (probably for cataloging their pirated movies). In the past, we’ve seen new Movie Collector versions being cracked within a day.

So on November 23, we released our first Themida-protected version of Movie Collector, version 6.5.

And to date, we have received no problem reports about it whatsoever (not even from developers). And what’s even more surprising, I still can’t find any version 6.5 cracks.

My revised view on piracy protection

Themida proved that it is possible to protect software against crackers (or at least make it very hard or time-consuming to crack), without causing conflicts or other software problems.
And more importantly, without spending a lot of time.

So if you want to protect your software against piracy, please don’t spend days or weeks building your own system (and constantly tweaking it for years to come). Just buy a copy of Themida (it’s ridiculously cheap) and spend a couple of minutes adding it to your build process. Then forget about piracy and spend your time improving your software and selling more of it.

Anyway, I think this post on a crack site sums it all up:

I would be very happy if someone had the crack for movie collector 6.5.1, I think I have seached the whole net for it now. It dont look like the crack excist, but that must be a first time ever if its true. Will be very thankfull if someone finds that crack or serial

Many developers default to working on their Product, spending most (or all) of their time programming. But that may not be the best way to increase your sales. For example, if you are getting about 100 visitors a day, then adding more cool features to your program is not going to help your sales. (Tip: if this is you, focus on Traffic).

On the other hand, if you are getting thousands of visitors per day, but are only averaging one customer per 1000 visitors, then spending time and money to get even more Traffic may not be the smart thing to focus on. You should improve your Conversion first.

Final example: if you are getting 1 or 2 sales each day, then trying to optimize the Conversion of your check-out process is not a good idea, as you won’t be able to measure the effects reliably.

That’s enough examples of what not to do. Here’s some simple guidelines for deciding when you should focus on Product, Conversion or Traffic.

When to focus on Product?

• When you get lots of trial downloads but they’re not converting to sales.
  Try to improve the user interface, add features that will help convert trial users into customers. (This could actually be seen as a Conversion job.) BTW: Adding exotic features for advanced users won’t do the trick.
• When there are bugs that hurt your sales.
  In particular, bugs that many trial users run into.
• When you can add features that you can sell as a major upgrade.
  This is only worth your time if you have large customer base already.
• When you can create an add-on that you can sell to existing customers.
  Again, only spend time on this if you have many existing users.
• When you can add a new feature that attracts a new audience.
  Change your product to open up new ways of getting Traffic.

When to focus on Traffic?

• When you have a great product, but no one knows about it.
  Make sure people do know about it. Get your product out there. Think Adwords, SEO, Adwords, download sites, and did I mention Adwords?
• When the numbers of visitors is too low to work on Conversion.
  You need lots of visitors (and downloads) before you can reliably do A/B split tests for website changes.
• When your Product and Conversion have been tweaked and tuned.
  Then you can safely go for new channels to attract visitors (Adwords Content Network, Yahoo Search Marketing, Microsoft Adcenter, Affiliate networks, banner advertising, offline ads…)

When to focus on Conversion?

• When traffic is high, but the number of downloads too low.
  Improve your website, make the “Download Free Trial” button easier to find, change its headline, your benefit and feature bullets, add cool screenshots and user testimonials. And track the results.
• When you have lots of visitors and downloads but not many sales.
  Improve the sales mechanisms of your trial edition. Check your check-out and pricing. And track the results.
• When you’ve got nothing better to do
  When none of the “When.. rules” for Traffic or Product applies to your current situation, choose to work on Conversion. Optimizing your download and sales rates is always an effective way to improve your sales. For me, this is what I work on “by default”.

What if you have employees?

Of course, if your company has grown larger and you have one or more employees, progress can be made on Product, Traffic and Conversion simultaneously. At Collectorz.com, we have 4 full-time programmers so we’re always working on Product. And Sytske (my wife) and AJ (our marketing assistant) are spending most of their time on Traffic and Conversion. But still, for myself, I find that I need to focus on only one of the big three at any given time.
For example, the last couple of weeks before a major release, I spent most of my time on Product, managing the development, testing builds, tweaking the UI, setting up product pages etc…
And once in a while I take a couple of weeks to focus on getting more quality traffic. Doing that now actually, taking another stab at the Adwords Content Network, taking my Yahoo and Bing advertising to a higher level, trying to get my Commission Junction account set up…
And in between, I work on Conversion. I always have some A/B split test running on our website. Tweaking headlines, the presentation of our product bundles, the pricing, etc…

Download the slides in PDF format here.

The player will show in this paragraph

(Sorry, no video of this ESWC presentation, but you can watch the SIC 2009 video of the same presentation here.)

This presentation is about time-management for ISVs, about deciding what to work on at any given time. But more importantly, what to ignore.

About me

I am the President and founder of Collectorz.com.
We make “collection database software”, software for cataloging people’s personal collection of CDs, DVDs, books, comics and video games.
I have been a shareware author since 1993, but in 1996 I created Music Collector, the first Collectorz.com product, for cataloging CDs.
I worked on that one in my spare time for a couple of years, and in 2000 I was making enough money to quit my day job.
I started doing Collectorz.com full-time together with a business partner.
Now, in 2009, we have 7 products, over 100k customers and 11 employees.
Then finally, I write about software marketing on my blog at alwinhoogerdijk.com.

Things to do

Okay then, back to the art of ignoring.
As an ISV, you spend most of your time doing Programming, Software Maintenance and Customer Support.

In 2001, that was the only thing we were doing. We had 3 products out and were getting a lot of email. Most days, we spend the entire morning doing customer support. It was only after lunch that we could finally do some coding.

Then we decided we wanted to learn more about marketing, so we went to our first european shareware conference, in Cologne. And a couple of months later we attended our first SIC, in St Louis. At these conferences, we learned that next to Programming and Customer Support, we should also:

Optimize our trial editions, improve our website design, submit to download sites, send press releases, do SEO, and Adwords, protect our software against piracy, track our sales, analyze our log files, find affiliates, create Mac editions and register your trademarks.

But that’s not all. I mean, at this conference alone, speakers are telling you that you should:

Do Twitter, and Facebook, create mobile applications, optimize your shopping cart, localize your software into other languages, develop web-applications, do A/B split testing, manage your online reputation, use the Content Network, do Email Marketing and use discount coupons.

So, what to do?

Do you keep working on Product related jobs only? Spending your time with just Programming, Customer Support and Maintenance?

Or should you focus on getting more traffic to get your website, by doing Adwords and SEO, and by submitting your software to download sites?

But maybe the best way to grow your business is to work on your Conversion, trying get more of your visitors to actually buy something. For example by improving your website design and by tweaking your trial edition.

Focusing and Ignoring

The bads news is, you need to do all of these of maximize your results.
But the good news is, you don’t have to do it all NOW.
What you should focus on depends on the phase your ISV is in.
Here’s a matrix with the 3 main phases shown from top to bottom, Release, Sell and Up-sell.
Within each phase there’s 3 categories of things to do, Product, Conversion and Traffic.

Next, I will show you what to focus on, while your ISV is snaking its way from the top left to the bottom right.

In any phase: focus on what’s important right now and ignore the rest.

Of course the hard part is to determine which jobs are important in which phase.
So lets try do that now.

Release phase

This is what I call the Release phase: Your 1.0 is out and you need to cover the basics of P, C & T.

Product
Your start with Product.
I have put Customer Support at the top, because in this phase, user feedback is essential.
Listen to your first users, fix the bugs they report, improve the user interface where they are struggling. But be careful implementing requested features. Only implement the features *you* think make sense for your product.

Back in 1996, after the release of Music Collector 1.0, I got a couple of requests to support “compilation CDs”, like movie soundtracks, where every track is by a different artist. Music Collector didn’t support those, for the simple reason that I don’t own compilation CDs myself. Of course it was a great idea, so I added it.
However, I also got requests to add CD playing functionality, which really didn’t fit a into my ideal of the ultimate CD cataloging software. So I didn’t implement that feature. And after 13 years, version 8 still doesn’t play CDs.

Conversion
For Conversion, just do the basics: Create a trial edition, which a good and obvious trial limitation. And make it easy to buy, very important.

This was one of the things I picked up at my first SIC, to have a BIG buy button in your trial edition, one that’s always visible, in any screen. Made a huge difference.

For your website, keep it simple, register your own domain and set up a one-page website, with a good headline, some feature and benefit bullets and a screenshot. Then make it very easy to download your trial edition and to buy a license.
As for e-commerce: In this phase don’t bother creating your own shopping cart or getting your own merchant account. Just use one of the full-service e-commerce solutions.

Traffic
Now you’ve got a product and a simple website, let’s get some Traffic:

Later on, download sites will become less and less important, but in this stage they are a good way to get your first traffic, downloads and links to your website. But don’t go overboard, don’t spend weeks submitting to hundreds of sites, just submit to the top 50 only and leave it at that for now, maybe even forever.

It will take a while before you will get some organic traffic from Google, so better start with SEO early. Get some links, have keywords in your page titles, write good content.
And start with Adwords now. Start low risk if you have to, switch off the content network, keep your bids low, use exact match only. But just start. And keep at it, don’t give up.
When I started doing SEO and Adwords in 2003, our sales doubled within a year. So traffic can be quite important

With a product, a simple website and some traffic, get the kinks worked out in all 3 categories, and then we’ve got the basics covered. Time to get your sales to a higher level.

Sell phase

And that is what we do in the Sell phase.

Traffic
The goal here is to increase volume. The volume of visitors, downloads and sales. The ultimate goal is to build a large customer base. Resist the temptation to go back to Product and start adding new features. New features will not automatically get you more sales. You need more traffic first, so this time we go from right to left.

For Traffic, start with setting up a log file analyzer or Analytics, otherwise you’re flying blind.

When I started tracking my traffic, it soon became clear that the time I was spending on shareware sites wasn’t paying off, at all. So spend your time on SEO and Adwords instead. Maybe try Yahoo Search Marketing for you best ad groups.

Conversion
On to Conversion: With more visitors, it’s time to work on the conversion rate of your website and trial edition.
Again, set up a system for tracking and A/B testing first, otherwise you will have no idea whether the changes you are making are real improvements.

First, track the number of downloads to measure the results of website changes using simple A/B tests. And as soon as you are getting a reasonable volume of sales, you can start A/B testing pricing and checkout related changes.

Personally I love A/B split testing, I always have some test running. I am testing pricing, headlines, the location of download and buy buttons, how to use TrialPay, sometimes two completely different site layouts. For me, a week without testing feels like a week wasted.

Product
Back to Product, where we can finally do some coding again.

Your work on Traffic and Conversion should be paying off now, with more sales coming your way, and more feedback. And this feedback will help you decide which are the most popular missing features.
Still, be careful adding advanced features that will only make your existing customers happy. Focus on features that will attract new customers.

Also, to expand your market, think about localizing your software and creating Mac editions. But if you are still continuously changing and improving your product, both be a maintenance nightmare.

At Collectorz.com We have our software localized into many languages and we have mac editions of our 3 main products. And I often regret doing it, it’s a daily annoyance. So, be warned.

Now keep optimizing your Product, Traffic and Conversion, to grow your customer base.
Because a large customer base let’s you move on to the Up-sell level.

Up-sell phase

In the Up-sell phase, the goal is to make more money by up-selling and cross selling. Because nothing’s easier than selling more stuff to your existing customers.

For Collectorz.com, I started with one $25 product. Now we have 7 products each with a $30 and a $50 edition. Plus, we sell CD-ROM delivery, Priority Support, two types of barcode scanners and 5 iPhone applications. Now instead of $25 our average first purchase is around $60 and our average life-time customer value is well over $100.

Product
Anyway, before you can sell more stuff, you have to create more stuff to sell.
So we start with Product here, going from left to right again.

Remember that I told you to be careful with adding advanced features. Well, now’s your chance. But don’t give em away for free, either introduce them in a more expensive PRO edition or in add-ons.

Another great way to make money with new features is paid upgrades. Add the features, call it 2.0 and let your existing customers pay for the upgrade.

For us, we started doing paid upgrades way too late, the first time only two years ago. We made a lot of money, so last year we did it again, this time pushing the upgrade a bit harder, with several reminder emails. And we made even more money. So don’t ignore paid upgrades, biggest mistake we made.

Mobile applications and web-based applications are also great up-sells, especially if you can sell them as companion apps for your existing software.

This year we have released 5 iPhone companion apps, and we sold thousands of them, just to existing customers. And in two weeks, we will launch our first online application. And this too has been designed so that we can sell it as as additional service to our offline users.

Conversion
On to Conversion: Now that you have more products, it finally makes sense to have your own shopping cart. It will give you full control on how to present and push your up-sells and cross-sells.

Another way to sell your new stuff is email. Have a regular newsletter, just keep your existing customers up-to-date, make them aware of your new stuff. You don’t even have to be pushy about it, just let them know it’s there and they will buy it.

Traffic
As for Traffic, more products means more keywords.
Expand your Adwords and SEO to cover these. Also consider creating localized ads and landing pages, to sell your translated versions.
Then there’s Twitter and Facebook. I put them in the Traffic box because they are often presented as good ways to get new visitors. But personally, I see them primarily as a great way to stay in touch with my most eager customers.

Summary

To summarize:

• Focus on what’s important in any phase, ignore the rest.
• The recurring theme here is Volume.
• You need a high volume of visitors to analyze your traffic sources.
• You need lots of downloads before you can track website changes.
• You need many sales before it makes sense to split test your pricing and other checkout improvements.
• You need many users to get enough feedback to know what really is important.
• You need to build a large customer base, before you should invest in up-selling.

When dealing with many users suggesting all kinds of different features, big ones and small ones, there’s two things you need to decide on:

• Which ones to implement
• How to implement them

Which ones to implement?

Sales
For each feature, you should always consider: Will adding this feature actually result in more sales? Either by attracting more new customers, by convincing more of your existing customers to upgrade to your new version or, more indirectly, by making users happier and thus more likely to tell their friends about your software.
If none of the above applies, then you may be better off not implementing a particular feature. Less is more.

Statistics
Features that are requested more frequently are important to more of your users, so should receive a higher priority. That is, if they make sense, which is for you to decide. Only implement stuff that fits the direction in which you want to take your software.

Of course, you need a sufficient number of requests to decide. Don’t just pick one feature with 3 requests over one that got “only” 2 requests. Not getting enough feedback to make your decision purely on the number of requests? Then I’m afraid that you will have to guess. Pick the features that you think will be appreciated by the largest number of users.

Beware of the “vocal minority”
All users are not created equal. If all requests for a particular feature are coming from a small, but vocal sub-group of your users, then beware. These users may not be representative for the rest of your audience, so implementing that feature may not be as important as it seems to be.
At Collectorz.com, the features that are requested on our forum are completely different from the ones we are getting by email. We have found that the typical forum user, often advanced and tech-savvy, is different from the average Collectorz.com user. So we have to take that into account when “counting” the number of times a feature is requested. However, I must say that the forum has also been the best source for wild, out-of-the-box feature ideas…

Beware of helpful users
When users suggest a particular feature, always make sure they actually want or need that feature themselves. In an attempt to help you, some users tend to make up features they think other users will like. Or they suggest functionality just because one of your competitors has it. Which by itself is never a good reason to implement a feature.
This is a common effect when you explicitly ask users for feedback. My experience is that the best feature requests are unsolicited, resulting from a user’s personal experience with your software.

Hidden feature requests
The best feature requests are not only unsolicited, but may not even be stated as a feature request. They may be disguised as a frequently asked question, or a common complaint. Read between the lines of your customer support emails. There will be loads of hidden “feature requests”, e.g. questions about how to accomplish a tricky task or complaints about some actions being too cumbersome, users being frustrated trying to understand your user interface.
Frustration is a major conversion killer, so implementing functionality to take away this frustration may be more important than programming your number one feature request.

Which features can you think of yourself?
Finally, don’t just rely on your users to think of new features to add. Often you can think of more important features yourself.
Users only tend to think in terms of small changes or additions to existing functionality. Whereas you can (and should) take a step back, think out-of-the-box and come up with completely new functionality. Stuff that your users may never have considered even possible.

How to implement them?

Solve the actual problem
Don’t just implement the feature that was requested. For every feature request, try to get to the story behind it. Try to find out what the actual problem is, then solve that problem. You may be able to come up with a better solution than the one the user was suggesting.

Don’t let users design your UI
Don’t just implement the feature exactly as it was requested. Your users are not user interface designers. Build the functionality they requested, but design your own interface for it, a user interface that makes sense, is understandable and consistent with the rest of your program.

Go broad
Feature requests are often very specific, solving a special problem that particular user is having. But with your implementation, you may be able to go broader, create a more generic solution that solves many similar problems. And thus make more people happy.
An example from the cataloging world: if a user requests being able to sort collection lists on the Title field, in both ascending in descending order, why not go all the way and immediately allow this for any field?

Go deep
The implementation of one requested feature is likely to trigger the next one. Can you predict what your users will request next, after you release your long awaited new version? Then why not get it over with now. Go deep and immediately add all related functionality that you can expect to be requested.

Beware of feature creep

I hope the above will help you decide which features to implement and how to implement them. But whatever you do, remember it is your software and that you are the one who is responsible for making a quality product. Listen to your users and use their ideas to improve your software, but don’t let them dictate your priorities.

We have been using urgency with our offers for quite a while, but last week we tried adding some scarcity.

Creating urgency using offer end-dates and reminder emails

All our offers are temporary and we clearly mention the end date in the emails. Giving the offer an expiry date results in urgency, a reason for customers to act now. They will be less inclined to postpone their purchase, which will reduce the risk that they forget about it entirely.

Reminder emails
To increase the urgency, we always send out at least two short reminder emails about the expiry date getting closer, e.g. 5 days before the end date and a final “24 hours left” email. It’s amazing how many extra sales you can pull in with that “24 hours left” reminder. We have seen cases where we sold more on that final day than on the first day.
Worried about annoying your customers with those reminders? I can understand, I had the same fears when we started doing this. But this doesn’t seem to be a problem at all. Just keep your reminder emails short and to the point. Repeat the offer, state how many days are left, then give em the buy link again.

Increasing the urgency by adding scarcity

Last week we tried something different. We were able to buy a large quantity (850 units) of laser barcode scanners from Opticon, at a very good price. We decided to offer them to our existing customers at a discount. For this specific offer stock was limited, so I tried to use that scarcity to our advantage.

I created a special page about the promotion on our website. In the top right corner of the page, I added a live counter, showing how many scanners we still had in stock (or to be more precise, showing 850 minus the number of units sold).

Then last Thursday, on October 22, I sent out the following email to existing customers:

Subject: Get Your OPR-3201 Laser Scanner Before Stock Runs Out

Hi ~Contact.FirstName~,

Alwin here, with a special, and temporary(!) barcode scanner deal:

*********************************************************************
The high quality, super robust Opticon OPR-3201 laser scanner.
Retail price: $114.95, Collectorz.com price: $99.95, NOW ONLY : $79.95
This offer ends November 15, 23:59 or when stock runs out (835 left)
http://www.collectorz.com/opr3201-offer.php
*********************************************************************

Here’s what happened:

A few weeks ago, my friend Margaret from Opticon called me and asked if I
was in any way interested in buying 850 OPR-3201 laser barcode scanners at
an extremely low price. But I had to decide quickly because this batch had
to go before the end of September (something with the end of the fiscal
year, crazy Americans…).

I quickly ordered a sample unit to check it out… And we all love it!
This pistol-grip scanner feels great in your hands and it scans very well.

After some negotiation, we decided to buy the entire batch of 850 scanners.
They’re in our warehouse in Portland now, ready to be shipped out to you.

The OPR-3201 scanner has been available in the Collectorz.com shop for a
couple of days, and we have already sold 15 (for $99.95).
Of course we can just continue to sell them for that amount and make some
extra money, but I figured it would be nice to offer it for an even lower
price to our loyal customers. (I want everyone to experience the joy of
cataloging stuff by scanning barcodes.)

So here’s the deal:
For the next 25 days, up until November 15 - 23:59, I will let you buy this
scanner for only $79.95. This is a ridiculously low price for this
professional barcode scanner, which means that there’s a good chance we
will run out of stock before that date.

To take advantage of this temporary offer, secure your OPR-3201 scanner here:

http://www.collectorz.com/opr3201-offer.php

This robust laser scanner can only be purchased for the $79.95 price
through the link above, it will not be available on our regular website.
Please don’t give the above link to anyone else, it is for YOU only!

Again, don’t miss this opportunity, because when these 850 units are sold
out, the OPR-3201 scanner will never again be available for this price.

Tip: At the top right of the offer page you will find a live stock counter.
Keep an eye on it so you don’t miss out. Hit Refresh in your browser to update.

Currently there are 835 units left …

http://www.collectorz.com/opr3201-offer.php

Alwin
Collectorz.com

The results

We have done a similar scanner offer last year in August and in that month we sold almost 500 units (at $114.95). So I was expecting to sell roughly the same amount now.
(BTW: that August 2008 scanner promotion is a story in itself, now known as the “Cable Crisis”. I will tell you the full story later )

This time, with more urgency and a bit of scarcity, we sold 341 units on the first day. Today, 5 days after the offer announcement email, stock is down to 231 scanners, over six hundred sold.

Of course, I couldn’t resist using the increased scarcity to generate some more urgency. So in today’s October issue of the Collectorz.com newsletter, I started with the following news item:

** Get your OPR-3201 laser scanner for only $79.95 **

I was able to buy 850 units of this high-quality and super robust scanner,
for a very low price. And because I want all of you to experience the joys
of cataloging stuff by scanning barcodes, I will let you buy this scanner
for only $79.95 (regular retail price is $114.95).

This offer ends on November 15 - 23:59 or when stock runs out,
whichever comes first.

HOWEVER: since announcing this offer last Thursday, we have already sold
over SIX HUNDRED units. Currently, there’s only 231 scanners left.

So… if you want one too, you will have to act NOW. Go here, fast:

http://www.collectorz.com/opr3201-offer.php

At the time of writing, we’re down to 196 scanners left. So it’s likely that stock will run out before time does

Quick tips for using urgency and scarcity

• Always have an expiry date on your special offers
• Be clear about the expiry date in your emails and promotional pages.
• Stick to the end date. Resist the temptation to keep the promotion running and catch some more sales. Your customers will learn that you are serious about your end-dates, which will increase the urgency next time.
• Send out reminders. At least 2 or 3, maybe more if the promotion is running for a longer time.
• Don’t forget the “24 hours left” reminder, as it can pull in a lot of sales.
• Use scarcity to add urgency. Use fake scarcity if you have to (I know most of you are not selling stuff for which you may have limited inventory). Just tell your customers you will end the offer after 200 copies sold.
• If you can do it, display a live “items left” counter on your promotion page. This will not only increase the urgency, but it will also give your offer some credibility, as it shows that other customers are taking advantage of it already.

UPDATE (October 30, 17:42)

They’re all gone. 850 OPR-3201 laser barcode scanners sold in 8 days

Technical

Multi-platform development
One of the advantages of web-app development is that you can serve users on all platforms with one code base. We invested a lot of time and money in creating Mac editions of our main 3 products, but for the Connect products we don’t have to. It even works on Linux
Of course, web-development has it own problems: getting your pages to look the same in all browsers. This can be a nightmare, especially if you try to support IE6. But our lead web-developer Robbert had a lot of experience in this area, so we’ve got it covered.

Maintenance and software updates
For online applications, all code runs on your server, which makes it possible to do live fixes and implement small improvements. As soon as you put the new code up on the server, every user is running the latest version. No builds, releases or uploads for you, no downloads and installs for the users. Quick and easy.
However, it’s important to stay alert though and keep rigorously testing your code before it goes live. Because it’s so quick to do fixes, it’s easy to get careless.

The same goes for adding new features, you can do so continuously. There is no reason to “group” enhancements and features into minor builds and major updates. For our Windows and Mac apps, we always try to keep the frequency of maintenance builds as low as possible, because it takes at least an hour to safely release a new stable build. Also, we often with-hold major new features for the next major upgrade, so that we can charge an update fee for it. For online apps, you’re usually charging a monthly subscription fee which includes all updates, so you are freed of the “major update cycle”.

There’s a catch though:
For downloadable, client-side software, users always have the choice of not upgrading to the latest version. Either because they don’t need the new features or because they don’t like the changes you made. Even (or especially!) if the changes are cosmetic.
For web-apps, users don’t have that choice. When you add a feature or change the look and feel of your app, it’s immediately live for all users, whether they like it or not. So for online apps, you should think a little longer before you make changes or add stuff that not every user may like.
(At Collectorz.com, we have removed features from our apps a couple of times, because we found that our software would be better without them. Less is more… If this generated complaints from users, I could always tell them to just downgrade to the older version. Not possible for our online Connect service.)

Live stats on usage
Another thing that has proven useful, for both technical and marketing reasons, is the ability to get live statistics on how users are using your software. Which features they are using, the sizes of their databases, the problems they are running into. Good data to have.

Privacy, security and data safety

For online apps, all user data is stored on your servers. Apart from the technical issues, like hosting, bandwidth, performance and disk space, this also causes some interesting new areas of “concern”:

Privacy and security
If you store user data that could be regarded as personal, then you’d better make sure your server and software are secure and this data cannot be accessed by anyone who is not supposed to see it. And even if you are fully secure, it’s still wise to have a good EULA and Privacy Policy in place. For Collectorz.com Connect, we hired a lawyer specialized in this stuff. Better safe than sorry.

Data safety
Even if the data is not of a personal nature, you still want to take good care of it. For offline software, the user is responsible for his own data and for having backups of it. But online, you are responsible. You really won’t want to loose or corrupt the data of your customers. For Connect, we have implemented a backup scheme that makes a local backup of all user data on a daily basis. And before every risky software update, we make an extra backup, just in case.

Customer Support

Another great thing about web-based applications is the advantages for customer support.

The first advantage is that all users are running the same version, the latest and greatest version that is. No problems with users running into bugs that you fixed ages ago, just because they neglected to update their software.

Also, the user’s software and their data is on your server, so if a user reports a problem you can simply log in to his account and take a look. In general, once you can reproduce a problem, you’re more than halfway to fixing it. And online, most issues are instantly reproducible, even user data dependent problems (and we all know what a nightmare these can be).
In many cases, you can even immediately fix the problem for them or help them live to accomplish a tricky task. Imagine how happy your customers are if you tell them:
“Just hit refresh in your browser now and it’ll be fixed”.

Sales

Last but not least: our experience selling online software, or, to be more precise, selling software subscriptions. Because that is the main difference: you are selling a subscription-based service, not a software product for a one-time purchase price. Huge difference, both for you and for your customers.

Pricing
Of course, the first question you run into is pricing. For regular, client-side software, picking a good price is the most difficult marketing decision already, but I found that I had even more problems deciding on the best price for the Connect subscription fees. And, to be honest, I don’t think I’m there yet.

We started out with a $40 yearly fee, plus a $30 setup fee. For existing customers, we had a 50% discount on the first year and they didn’t have to pay the setup fee.
Soon after launch, we dropped the setup fee entirely, as I felt it didn’t really help to attract new customers to the service ($70 just to get started is simply too much).

Later on, I added the possibility to pay for just 3 or 6 months. At the same time, I started presenting the fees differently. I now list the “regular price” as $4.95 per month (which is indeed what you pay if you just subscribe for 3 months), plus I present the 6 and 12 month subscription prices as “volume discounts”. For instance:

One Year Subscription: Regular Price: $59.40, Discount: $19.45, Now: $39.95

This seems to work a lot better. We are now seeing new users sign-up for all 3 subscription levels (3, 6 or 12 months).

The funny thing about subscription fees is that users seem to think about them differently. I mean, sell a $50 software product and nobody asks what you need that money for, or what you are going to use it for. But ask a $39.95 yearly subscription fee for an online, hosted application and people suddenly start thinking about where that money is going, whether hosting their data online is really that expensive. While the same people never seem to be having problems paying $50 for your Windows software, plus $25 per year for major upgrades.

Here’s an example of one user’s feedback on our Connect pricing:

You want to charge $39.95 a year to simply host LINKS for us in your database (with a subset of personal information). Yes, if I order before October 31st, I get it for $19.95 for this year. Let’s move past the marketing ploys for now because even that is a lot to charge for LINKS and TEXT to be hosted on your servers, especially since I pay $39.95 a year to host UNLIMITED data with UNLIMITED bandwidth and GIGS in mySQL tables with my current web host provider. That of course is in addition to the over 200 GB of FREE data I host on Windows Live and other related resources.

We have seen several forum posts and emails along the same lines. All from existing customers, who are used to our pricing for our Windows and Mac apps. I don’t expect this to be much of a problem for new customers who start off with the online service.

Selling to existing customers
Which brings me to selling Connect to our existing customers. As I posted before, this was one of our goals when designing Connect: to be able to sell it as a sharing / online publishing add-on to users of the Windows and Mac OS X edition. We invested a lot of time creating a smart two-way syncing system, so that users can synchronize their collection data between their Connect account and their local database. Cool stuff.

Up till now, we have sold a Connect subscription to about 4% of all customers owning a license for the latest version of Movie Collector (Windows or Mac). Not bad, but I was expecting to sell more in the first couple of months. Now there are still some limitations in the usage of Connect, especially related to the syncing system, so I expect to sell some more once we resolved all of these. Maybe tweak the pricing…

Selling to new customers
We haven’t sold Connect to many new customers yet. I have just started slowly promoting our Connect editions to new customers using Google Adwords. Slowly, because the Connect website hasn’t received my usual level of tweaking and tuning to optimize its conversion rate. I don’t want to risk loosing too many regular Adwords sales because the Connect traffic isn’t converting yet.
But as I said in my Art of Ignoring presentation, one needs traffic to measure and optimize conversions, so I guess I will have to take that risk soon and start directing a lot of costly Adwords traffic in the Connect direction. Scary…

I will let you know how this is working out. Hopefully I will be able to present some data in my ESWC presentation in a few weeks. See you there.

For yesterday’s Collectorz.com newsletter, we decided to try something different: a “meet the team” video, showing a tour of the Collectorz.com office and introducing all members of the Collectorz.com team. Here it is:

Meet the team

Our newsletter subscribers loved the video. Some feedback we found in our inbox this morning:

User feedback

Congratulations on the video

Hi guys (and girls),

I just wanted to say thank you and congratulations for the video.
Really cool! Nice to meet you (virtually, at least).

I am really happy to have bought from you. Really excellent service and products.

Keep up the good work

great to put a face to the names

I really enjoyed the video of all the Collectorz family. It is great
to put a face to the names. Alwin’s alway mentioning everyone in his
emails. The shots of your town were beautiful, it looks like a great
place to live. Keep up the good work and thanks for the video.

BLEW ME AWAY

What a fantastic movie!!

You have always had a superior product but your little meet the people video—–BLEW ME AWAY!!!

thanks for thinking of us. The pictures of Amsterdam where great.
excellent work guys and girls!!

loved seeing everyone

Greetings from the Southern Hemisphere

I just received your newsletter with the link to the video of your
office. I really REALLY loved seeing everyone and knowing the faces of
the people who each have something to do with the fantastic prodect
you have developed.

Great job everyone!

more fun than I ever had

Thanks for the video, it help me better appriciate what a great little company you are. I’ve always envisioned a small, friendly “works well with others” type of organization, in a very cool office enviroment. I was right!

I worked in IT for 32 years, I programmed the IBM 1401, 360, 40xx series, Dec PDP-11 and VAX, and toward the end of my career managed networks and programmed PC’s. I had fun but I think you’re having way more fun than I ever had.

I wish you the best for continued success.

Dear Collectorz Team,
Loved the video! It is nice to have faces to go with the names and a view of what your office looks like.
Well done, friends!

Great video of your office & co-workers. It’s nice to see where you all work. Kudos to AJ for putting that together.

Thanks VERY much Alwin! I enjoyed meeting the team and the brief tour of Amsterdam.
(Very Satisfied Customer)