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Open-source mechanics: Improving conversion rates

There are a few key things that open-source companies need to do to turn downloads into sales.

Open-source business depends upon data. Because so much of the business happens online, it's possible to set and track metrics that would otherwise be difficult to do in a proprietary model. One area that all open-source startups focus on is improving conversion rates.

The difficulty is not in converting an opportunity into a sale. If my open-source peers are like Alfresco, and I'm sure that they are, we actually top the industry in that metric. Why? Because by the time a lead becomes an opportunity, the prospect is already using the software and is effectively "pre-sold" on its value.

No, the real question is how to turn raw downloads into qualified leads. Importantly, this must be done at low cost so that these cost savings can be passed on to customers. A high-cost sales model does not mesh well with low-cost open-source software.

The Alfresco team has been working a lot on this lately. I thought I'd share some of the things that have worked for us, in no particular order:

  1. Good documentation. I've written on this before. If you don't have good documentation, you force too much of a burden on your pre-sales organization. It's expensive and, frankly, with no upfront license fee, foolhardy. Open-source software largely needs to sell itself.

  2. Establish an evaluation framework. With proprietary software, everything points to a license purchase as the "essential next step." not so in open source, where the would-be customer already has the software. An evaluation framework - which might consist of videos showing how to do important things in the software, or how-to guides, or...you get the picture - walks the prospect through the evaluation process, so that they see a solution to their business problems, rather than just a mound of code.

    As with documentation, pre-sales could fill this role, but the name of the game in open source is to enable adoption without heavy lifting, so that you can scale the sales process without linearly scaling the sales organization.

  3. Automate nurturing of leads. Much of what is involved in this is covered above or below, but this step relies, in particular, on demand-generation software (see more on this below). Open-source companies can't afford to call every lead that comes in. Alfresco has many thousands each month, and I know our peers are the same (or higher).

    Before you engage your lead-generation team, you need software that can detect patterns of use (or, sometimes more importantly, non-use) and send emails or trigger other events (perhaps a warning to the sales representative over the territory) that lead to the prospect doing something (e.g., reading documentation on an issue that had stymied their progress). If open-source companies don't automate, they're toast.

  4. Guide the download. This is an amazingly simple, but often overlooked, measure. Basically, you want to remove guesswork for the prospect. When someone downloads Alfresco, we detect the operating system for them and so only present the option that fits them. (More than once I've downloaded the wrong version of OpenOffice, for example, because I downloaded the PowerPC version - software should detect this and present the right choice for me.)

  5. Make as many demos available as possible. Open-source companies need to help prospects see how the software can be used to address their needs. Every online demo is one less that needs to be done by a pre-sales engineer. It's all about scale.

  6. Be active on forums. Prospects will often have questions the documentation won't answer. Answering a question once on one's project forum is a great way to scale an answer to many prospects (and existing customers).

  7. Focus the prospect on the project/product, not (yet) its implementation. It's important for a would-be buyer to be comfortable with both the software and how it will integrate into their environment, of course, but the best customer experience involves commitment from both the prospect and the vendor.

    Things like virtual appliances can help here, as they enable prospects to hone in on the value of one's software without (yet) getting into the details of how to integrate it into one's IT environment. In the proprietary world, customers commit to a license before they spend any time on the integration piece.

    In the open-source world, they get to preview the integration experience and, if they choose, go far down that road. But it's good to keep would-be customers focused on what the software actually can do for them. There will always be pain in implementation, whether they're looking at proprietary or open-source software. Best to keep the focus on the software.

  8. Enable "light" engagements to solidify customer confidence. Alfresco offers a 90-day trial which offers prospects the full Alfresco experience: certified software + support. It's our way of showcasing to prospects what the full Alfresco experience is, and it's a way for customers to get added support during a critical trial phase. One added benefit is that it creates an artificial "sell by" date. Everyone knows that at the end of 90 days, a "go" or "no go" decision is expected.

  9. Use demand-generation software. This is not negotiable in an online business. If open-source businesses aren't tracking how prospects interact with them as companies, they will fail. Period. Regardless of whether you use proprietary Eloqua or open-source Loopfuse, it's critical to know how long it takes for a download to turn into a trial, and at what point prospects start requesting documentation, and what kinds. All of this data makes an open-source company more efficient in fine-tuning its processes to enable it to sell exceptional service...at a fraction the cost of proprietary software.

These are just a few of the things that Alfresco does, and to good effect. I'm sure there are a range of things we can do better, so if you have suggestions based on what your own company has done, please share them. Open-source sales models are still an art, rather than a science. It's good to share best practices because, as you can see from the above, the direction is to make the process more science than art.