Taking your best shots - advertising strategy for software start-up - Direct Line - Brief Article

Nation's Business, August, 1996 by Laura M. Litvan

My new software-development firm has completed work on six products for business travelers. Among other things, our software will help travelers maximize their frequent-flier miles or identify the best hotels and restaurants in the cities they visit. Our problem is that our advertising budget is only $20,000 for the first year. What can we accomplish with such a small sum?

M.L, Raleigh, N.C.

You could get a lot of mileage out of your small budget with a carefully honed strategy, says Bob Bly, a consultant in Dumont, N.J., who specializes in marketing sol%ware goods.

He says you probably have discovered that a $20,000 budget would doubtless rule out placing ads in major airlines' inflight magazines; they charge $10,000 to $40,000 for a one-page ad.

Bly suggests that you designate one of your six software products as your "flagship" product--the item most likely to capture an initial sale with customers--and focus your promotion efforts on that product.

When a frequent traveler orders that flagship product, called selling on the "front end," you could insert promotional materials about the other five products into the shipment to the customer, with the hope of attracting future sales from existing customers on the "back end."

To trumpet that flagship product, write a press release about the software package and send it to editors at publications for business travelers. If the editors feel there is something distinctive or particularly useful about your software, you might get some free publicity through a software review.

Another promotional outlet is direct mail. Contact a mailing-list broker to determine if there are lists that could help you send business travelers a brochure about your flagship product. The ideal list, Bly suggests, would include members of airlines' frequent-flier clubs who have also made mail-order purchases in the past. "You really want people who have bought through the mail for other travel-related items," he says.

Once you factor in all of the expenses associated with a direct mailing--the costs of paper, envelopes, postage, and "renting" a mailing list, to name a few--you probably spend about $600 per 1,000 pieces of mail, he says.

As you examine your options, don't let anyone convince you that a $20,000-a-year advertising budget means you have to think small, Bly says. "People manage to successfully market their products on that kind of budget every day."

Laura M. Litvan is a financial writer in Washington, D.C.