“It’s not marketing if it’s not measured.”

While many on the outside may view marketing as more of an art than a science, most marketing executives know the value of measurement and data-driven decision making.

For many years now, marketers have relied on web analytics to track the performance of their efforts and guide future programs. Today, marketers are beginning to see the same value in software usage intelligence.

Unlike the print and broadcast media, the Internet presents marketers with a wealth of data. Websites, of course, are fertile ground for measuring and analyzing user behavior given the real-time connection between content and action. Using tools like Google Analytics and Adobe Analytics, it is easy to gather and analyze intelligence allowing you to identify who is on your site, where they are coming from, and what actions they take.

Armed with this intelligence, marketers can make data-driven decisions to keep visitors engaged on their site, present content to guide prospects through the sales funnel, and improve the effectiveness of their campaigns. Marketers need look no further than the recommendation engines on Amazon and Netflix to see how web analytics can drive new revenue and increase customer lifetime value.

Software Intelligence Produces Similar Results

Product marketers and product managers can use software intelligence to better understand feature usage and adoption, enabling them to make data-driven decisions on their product roadmap. They also gain real-time insight into what’s going on with their beta programs. Instead of making product decisions based on sampling, profiling, and user surveys, for example, those leveraging software intelligence let actual, objective usage data be their guide.

Sales and marketing professionals benefit from software intelligence in an even more direct and compelling way: they use it to generate new license revenue.

Most software vendors with trial programs lose visibility into customer behavior as soon as demo software is downloaded or installed. Once they implement software usage intelligence, however, they are able to analyze the progress of individual trials. Armed with this intelligence, they can then align their nurturing campaigns to the ways the trial user is actually using the application. Vendors can even leverage in-application messaging for these nurturing campaigns to create tighter links between the user’s actions in the software and the vendor’s conversion goals.

Finally, software intelligence also improves sales funnel analysis by connecting the dots between marketing campaigns and the users who signed up for a trial, began accessing freeware, or purchased a license. What’s more, the insights provided allow you calculate time to conversion based on actual user behavior.

Collecting from Users Who Don’t Pay

Software intelligence enables software vendors to tap a hidden channel of revenue: unpaid users. It does so by helping vendors identify piracy and overuse and bring those users back into the funnel for conversion to paying customers.

This may seem counterintuitive, but research from Microsoft and Adobe has identified three different types of pirate users, and their differences present marketers with real opportunities:

  • Pirate-inclined users think all software should be free and are highly unlikely to pay.
  • Opportunistic pirates are bargain hunters looking for the best deal and are willing to take some chances with less well-known online stores, leading them to unknowingly buy pirated software.
  • Legally-inclined pirates have no idea they are using pirated software. They may work for a large company that has installed more licenses than they’re entitled to or they could be a home user who gets their software from a “helpful” friend or relative.

The good news is that opportunistic and legally-inclined pirates are unintentionally using pirated software and are not averse, in principle, to paying. Based on research conducted by Microsoft, Adobe, and Disney, 83 percent of all pirates in mature markets are opportunistic and legally-inclined and will in fact pay for software.

In other words, these users represent the highest quality leads (e.g., users who are already sold on the value and benefits of the software) and are ripe for conversion by sales or compliance teams.

How to Make the Most of Software Usage Intelligence

Software vendors that are interested in usage analytics and software intelligence should consider these questions:

  • What types of data should you collect? – Vendors should only collect the data they need in order to identify unpaid use of their software and whatever data product management can use to improve their products. You need to be very cautious about collecting any personal data from users. Don’t run afoul of privacy laws!
  • When should you collect the data? – Activation data presents a brief snapshot at the beginning of a deployment, while usage data tells a much richer story about how the software is actually being used (how often, features being used, etc.). That is, the type of data you want to collect should determine when you collect data.
  • What can you do with the data? – As mentioned, you may be able to use the data to generate leads. You may also use it to identify potential geographical regions for sales growth or to map the speed of adoption and use. However you employ it, be ready to deal with huge XML data files that are not easily parsed or analyzed!
  • What else do you need to consider? – Software usage intelligence offers a lot of potential, but, if you aren’t already employing it, there is a lot to think about including: workflows around passing software intelligence to product management, compliance, and sales teams; the possibility of leveraging federated data from other software vendors; and ways to create an executive dashboard that will make this data easy for the C-suite to consume.

Software usage intelligence is similar to web analytics in that it provides the tools to measure user behavior in a connected environment when the user is engaged. Software vendors are in a unique position to leverage this intelligence to make data-driven decisions to improve their products, drive new revenue, and increase customer satisfaction.

What do you think it can do for your sales and marketing efforts?

Image Source (Creative Commons): Keoni Cabral.

michael_goffMichael Goff is the marketing director at V.i. Labs, where he helps oversee the development and promotion of solutions that provide software companies with actionable intelligence on the use and misuse of their products in order to increase revenue. A twenty year software marketing veteran, Michael understands how IP theft and piracy impact an organization’s bottom line, as well as how unlicensed users can be converted to recurring revenue. Since 2010, V.i. Labs’ customers have generated more than $1 billion in new license revenue by leveraging software intelligence.

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