License Your Business Software – The Right Way

By: Christine

Does your company possess a unique, innovative software solution? You may have the potential to license this software as a new line of business by providing your operational system as a product to other companies.

In our blog “Can CIOs/CDOs help bring internal innovations to the attention of the business?” we outlined a strategy centered around learning for taking on this new business venture. Once you are in the position to sell your software product, how do you win businesses over?

Offer free and paid software packages

delivery packageLet businesses see the value of your product by offering a free software package alongside paid plans. The free plan could have limited features and capacity – allowing others the opportunity to try out the product. Create a website with clear download links and a side-by-side comparison of the free plan and paid plan(s). The free plan will encourage users to pay a small amount for the features of the paid package.



Understand your market

MarketplaceAlways have a good understanding of the market to which you are selling. Understand the needs of your customers, how they think and react and how to best promote your product to them over time. Market and offer a free version to the most influential people in the industry who would be likely to recommend it to others. Conduct surveys and other forms of data analysis to understand the customers that download your free software offering. This information is useful for determining what it might take for them to upgrade to a paid plan.


Offer compelling upgrades

UpgradesConverting from the free software package to a premium plan should be a smooth transition. Depending on the type of software, a limit can be placed on the free version in terms of features offered, number of clients it can handle, etc. Once the customer has reached the limits, it will be a clear sign it’s time for an upgrade. Consider providing occasional discounts of the paid packages to attract customers who are on the edge of getting an upgrade, or offering a free trial version for a set period to show users what features they are missing out on.


Evaluate your results

Results evaluationThis is one of the most important aspects of taking on this business venture. Periodically analyze what is and is not working and learn from mistakes along the way. It’s important to be able to adjust throughout your journey. Collect data on how many people are converting from free to paid plans and understand other benefits it could be providing as well. It could be possible that free users are bringing in additional paying customers. If the free plan is too much of an expense, take actions to eliminate the costs fairly.

Providing free software packages with paid upgrades can be a great way to begin winning over customers and getting the word out there about your offering. Be sure to have a flexible plan for how you will convert free customers to a paid package within an appropriate amount of time so you can succeed at marketing and still profit.

Looking for more insights? View our related blogs

About Christine
Christine Librojo was the Sales & Marketing Operations Analyst at alligatortek.

alligatortek is a Chicago custom software and application development firm that began partnering with clients 25 years ago to develop game-changing applications for its clients. alligatortek is recognized as a best-in-class partner, innovator and employer. The firm is a two-time winner of the Chicago Innovation Awards and a 2015 Microsoft Partner of the Year. alligatortek is a four-time winner of the 101 Best & Brightest Companies to Work For in the Nation.

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