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Recently discussed on the Runrev list was the value of promoting and selling products using ultra-discount sites like MacZot. MacZot runs single day (or single weekend) sales of software products at a 50% or greater discount. Will you benefit from selling this way, or will you succeed in devaluing your product? Here are some questions to ask.

The nice thing about using a service like MacZot is that it gets customers onto your update/upgrade plan, usually in large batches. Mirye Software ran a deal on MacZot a few weeks ago on Shade Designer.

In running these types of campaigns, there are a few considerations -

Is there a good chance you’ll get an upsell later?

This can be on renewals or on upgrades. You should carefully differentiate these two – a renewal extends the current license for a specific amount of time, compared to an upgrade that lets a customer move to a higher level of product.

If you have a short initial renewal period and/or desirable higher levels, then it’s a really good investment. For us, it was a really good for Shade Designer because the most popular version of Shade is Shade Standard, which is a $200 upgrade.

There isn’t a renewal option on Shade Designer – once you acquire it, if you want to get the next version of Shade Designer, you need to buy it again.

Do you get a cross sell opportunity?

Once you sell to a customer, it is usually that much easier to sell them something else. When we sold Shade Designer, we had subsequent sales of content, including two 3D characters Hanako and Tully, each of which run for about $49. These products are desirable because character design is extremely difficult and these are ready to use characters for 3D artwork.

Does the promotion cause long term devaluation of your product?

This is a bit harder. If you keep your promotion term down to two weeks or less and the exposure narrowed to a specific group – probably no problem. If it is longer than this and, you also have sales channels, you can see some push back from those channels because they will begin to see a reduction in sales – this is where price protection issues come up.

If your product is constantly on sale, then using a service like MacZot will contribute to the perception of devaluation. Also, along with devaluation, you also increase the risk that customers will expect to buy on sale and simply wait until a new sale pops up.

Does your product require intensive support?

If you have a product that requires a lot of support and you don’t have a separate way to charge for it (or a way to keep your costs very low), then you are setting yourself up to lose. A good way to offset this is if you already have developed a community based support system – forum, group or mailing list.