On-demand software marketing – What doesnt work?

In an earlier post, I listed my top three sure-fire marketing tactics for on demand software.
Here are my top three that don’t…

1. Extensive offline marketing
2. Chasing elephants
3. Premature channel development

Offline marketing is almost always expensive, and as an on-demand service your revenue/user is usually far  too low to cover it.  Second, if a prospect is not online, he or she is missing a very fundamental qualification criterion for signing up for a Web application—they aren’t online!  I say extensive, because sometimes there are focused events or offline promotions that can provide a real return, or have ancillary benefits such as showing industry presence and credibility.  It really depends on your industry, product and target prospects.  But, they are few and far between.

Chasing elephants is by far the biggest mistake an on-demand business can make.  You find a prospect that has cash. But there are missing features, a long sales cycle and special legal requirements, etc.  When you need cash this direction is tempting.  But, one too many stumbles away from your core strategy and you wake up to find that you are a ten customer consulting business constrained by the special needs of a few powerful customers—not a rapidly growing web application.

Finally, no one wants to resell your product or service either as an affiliate or a full scale VAR, unless they can make money at it.  Until YOU are making money at it, you will have a hard time convincing a channel partner to invest precious time and resources building specific capacity to do so.  It may be that your ultimate distribution model is fundamentally channel-based, by you almost always need to kick-start revenue yourself to prove your potential.  And, you will need to share the unique aspects of marketing and selling your product with your channel partners—which you can’t do if you haven’t been through it yourself.

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