How Do you Sell Against Free Software: Part II

This is a continuation of my blog from last week. Last week I wrote about the different ways of differentiating your software product from open source or free software in the market, based on my experience with one of OpenView Venture Partners‘ portfolio companies.

To summarize last week’s blog, if you want consumers to choose your product over competing free ones, you need to show up on the top of the search list; you have to show how your product is better and what features set it apart; from a product development point of view, make it easier to use and simplify the installation process; and to attend to the needs of the more visual consumer, make the user interface better looking. Here are a few additional things to keep in mind that will give you a competitive advantage over the free offerings from your competitors:

Technical support, a key selling point: One of the major differentiators for our portfolio company was its technical support team. Free applications seldom offer any form of customer service or tech support. Offer detailed tutorials a few times a week that your customer can log into and ask questions in. You can also provide an “online chat” option with someone from the Tech Team, say from 9am to 5pm, on your website. Use all or at least a few of the above to distinguish your product by helping your customers through questions they might have about your product, or solving an issue they have with your product.Provide high quality customer service: Some customers, especially bigger, enterprise users, will always look for this. Give them incentives and additional perks for enrolling in your software. May be make the first two months free for them, as a trial, and if they like it, sign them up for one of your plans. Be flexible with your customer needs. The ability to customize to their needs will definitely set you apart from open source solutions. 
Create a viral: Get current customers to talk about your product. Encourage them to talk about you by providing them with special referral discounts. Reward them with free upgrades or other special perks. Flaunt your expertise: Become an industry expert and provide helpful advice in forums, blogs, newsletters, magazines, Twitter, Facebook, and so on. Develop a content marketing strategy to put yourself out there. Develop yourself to become a trusted source of information and use it to help build your credibility. Differentiating yourself as an industry expert will help you build your brand and create/strengthen your brand awareness. Also, in the long run, this will also help you with customer retention as your customers will trust you to be better than your competitors. Having said all of the above, I must say that competing against open source and other free software is not an easy task. However, keep in mind that even free products have the cost of time, so use it to your advantage, and develop and market your product using some, if not all, of the above pointers. Here are some more articles about competing against free software products:http://www.strategy-business.com/article/re00045?gko=3e433
http://jeremiafroyland.com/how-to-compete-with-cheap-or-even-free-products/http://www.developer-resource.com/how-to-compete-against-free-software.htmhttp://www.softwarebyrob.com/2009/08/11/how-to-compete-against-open-source-competition/