Electronic Software Licensing turns more evals into sales
Of the many advantages to using a license manager, the easy creation of eval/trial/demo versions of your packaged software is arguably one of the most powerful. Using an electronic license with an expiration date, and possibly a “demo” flag, makes your product accessible to would-be buyers. Since electronic licenses can also be easily turned into full, “purchased” licenses, a trial version of your product is the logical first step in a successful sales process.
Considerations when building your trial licensing program
For all but the most complicated software products, users expect to be able to evaluate software on their own before they buy. It’s difficult to imagine running a successful software business today without a well-designed software trial program. As when buying a car, a software “test drive” is part of the process.
When considering whether your software is a candidate for a customer-driven evaluation program, you have to examine who your intended customers are, what their expectations are and whether your application is easy enough for them to use. You also have to be prepared to give a certain amount of extra support as a result of a new trial program. Be sure that your product allows install and initial setup to be accomplished with as little support as possible.
A well-designed trial licensing program will reduce your cost of sales, increase customer satisfaction and productivity, all while expanding your reach into wider geographies and attracting new types of users.
Software Distribution and Customer Qualification
Trial software can be made available to your customers on physical media (eg. trade-show give-aways) or downloaded from your website. Regardless of how they receive it, your eval should be easy for your prospective customers to install and use.
Software vendors need to decide how widely available to make the eval copy, and who will be allowed access to it. After all, you want as many potential buyers as possible to be able to get it, but perhaps not competitors or those who give obvious clues that they are unlikely to buy.
Registration Info – how much is enough?
If you choose to allow your software to be downloaded, you have to decide how much user information to ask for from your users, ie. name, company, location, phone/email, etc. Most business to business customers will have no problem giving a reasonable amount of reliable data. But those who resist or give you personal “gmail, aol, or hotmail” email addresses may be telling you they are not serious buyers. Also, be careful with consumer-types because you might spook them based on their privacy concerns. Look at what your competitors are doing and tread as lightly as possible.
The role of a License Manager
Unless you’re OK with your software being treated as “shareware,” you have to implement some kind of mechanism to limit how it can be used during the trial period. License managers, such as RLM from Reprise Software, offer maximum flexibility without disturbing your install process. Best of all, the same distribution bundle that serves as your trial copy can be upgraded to a “paid” copy by issuing the proper key later.
With a license manager, you can turn on/off various software features and limit usage scope and trial duration. But which knobs should you control?
Length of Evaluation Period
Typically, trials are limited to a certain number of days. The “30-day eval” is the most common, but the length can vary based on your customers’ preferences and the complexity of your application. But the big question is, “when does the clock start?” We have found that the optimum strategy is to tie the initial product installation to the Internet activation/licensing process. This tells you when the software was installed, and more importantly indicates when the eval will expire, instilling a sense of urgency in your user, and setting in motion a “follow-up timetable” to help your staff orchestrate a smooth sale.
Your licensing/activation software must ensure that the customer cannot easily modify the date (back-date) in order to extend his eval period. It’s best to have a liberal re-activation policy when necessary.
Other schemes? Not so Good
Other strategies are sometimes used to limit the trial software. Some vendors limit the number of times a product can be run – we find that this is a crude method, at best, because the trial end date is uncertain. Others count down the number of days based on the initial install. Unless you (the software vendor) know the install date, this method is of little use too. You don’t want your sales staff calling in on your prospects only to hear, “Oh. We haven’t installed your software yet.” Wasted effort.
How much Functionality?
Another crucial decision is how much functionality to enable. You want to reach the Goldilocks condition – with a “just right” amount without giving away too much real value. This issue is largely governed by the type of software that you sell, and the format of what it produces.
If you sell libraries to software developers who embed your products in theirs, then you should not limit features at all. Reprise Software sells its products this way, limited only by expiration date.
Offer Limited Functionality even for Unactivated Evals
If one of your requirements is for trials to be started without an Internet connection, then you should consider simply reducing your product’s functionality to a lower level until Internet activation becomes possible, at which time a full evaluation period can be authorized. You might consider “hard-wiring” a fixed expiration date into each release – say one year from its release date – just in case the user never activates, the version will eventually expire.
Up-sell Marginal Users
Also, make sure that this “base level” of functionality does not cannibalize your existing base. Set the level high enough to attract marginal users that would be otherwise hard for you to reach. Over time, some of these fringe users may find that your application has become an indispensable tool, motivating them to upgrade to a full commercial version. “The gift that keeps on giving.”
If you decide to restrict access to some application features, you should always make your users aware of what is being disabled. Perhaps “grayed-out” menu choices are the way to go. This generates user curiosity and hints at what the full product capability would be should the customer choose to upgrade later. Here are some other ideas in this vein:
- Turn off highly support-intensive features
- Limit size or service levels – useful for server-based products, databases, etc.
- Use watermarks or notices – useful when the software’s value is in its visual output – better than the “Can’t-Print, Can’t-Save” models.
Best Practices Summary:
- Use an expiration date of n-days from Internet activation – creates user urgency and a timetable for sales follow up
- Provide “sample data” or sample “use cases”
- Expose all functionality to the user; even if you limit scope of use, show the user what could be possible
- Allow a liberal eval period extension policy; requests to extend the eval period often come from your most serious prospective customers
Show “number of eval days remaining” on the start-up screen
Always remind the user how to buy, even after the eval has ended, by providing a link to information on how to buy
- Let your unactivated application work in a reduced functionality mode
Do not require the software to be re-downloaded or reinstalled when upgrading to a paid license
- Offer the user the chance to take a survey when the eval period ends, there is great value in understanding why someone didn’t buy
- Use a license manager and/or Internet activation server to maximize control and flexibility
Using a license manager can and should be the foundation of a successful sales/business model. Feel free to contact us for more “best practices” details about what we’ve seen work successfully at other software companies.