How an ex Microsoft Staff Made $200,000+ from selling a simple software

* 1. Made $25,000 within 30 days

* 1 year later: Reached $200,000 in sales

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* 16 months later: Sold ownership for $90,000

* Current: Repeating the same strategy with another software, which passed $10,000/month recurring revenue in just a few months

This is a success story of how an ex Microsoft staff Dan, made $200,000 and how he plan to repeat the same process over and over again. This post has been shared on Business-Matter.com, exactly how it was done here, hopefully sharing some experience our others  (readers and subscribers of Business-Matter.com ) can use. Particularly, Dan is going to detail exactly how he marketed the product, spending less than $2000, to earn over $25,000 in PROFIT in less than a month (mid-August to mid-September 2008).

So, over to Dan

Finding a Great Product Idea

First, I’m not the type to create info products. There’s plenty of room in the market for people to write ebooks and courses and provide training, but it’s not for me. That’s why this wouldn’t be very appealing as an ebook, but hopefully it’ll have some nugget of value you can take away and be a worthwhile blog post.

My strength happens to be that not only do I have some marketing sense, but I’m a programmer. A great one, in fact, having worked for Microsoft and DuPont while earning my first degree in computer science. Which means I can rapidly develop and evolve a product to meet my or a customer’s needs.

Even if you’re not a programmer, you can always hire one (you can use the programmers at BrowseDotCom.com ), and if you learn anything from how I sell, you can apply it to a different type of product as well.

In my mind, the two most important traits of a successful product are simply:

1) They solve a problem YOU have.
2) Other people have that problem!

Almost all of my most successful products were created to solve my own problems; provide some service I couldn’t find elsewhere but wanted to use myself; and also happened to solve the same problem for many other people.

For example, before Google Analytics existed, I created W3Counter. I wanted to see my web stats in real-time, so I could see what people on my site were doing right then, while the free hosted trackers of the time were all batch updated or didn’t provide the right information. Even with GA in competition, I’ve evolved it, and people continue to pay me every month to use a real-time tracker (Google updates in batches) that doesn’t need clicking through 5 menus to reach the info you want.

The product I recently made $25,000 selling, though, solved a much simpler problem and took only a few hours to build, test and release.

Almost a year ago, as web hosts increased their affiliate commissions to record levels, averaging $70 per shared hosting sale, I wanted to step up my promotion. I have a number of sites that target webmasters already I could use to cross-promote. I decided to start a review site, but didn’t want to make a copy of the popular top 10 chart type site with a fake editorial review and feature list.

I wanted to let users write the reviews, to add some credibility to my site, and wanted them to be able to rate the hosts by several dimensions. Having just started using WordPress on another site, I decided it’d be much easier to build the site as a WordPress blog than from scratch.

I went searching for rating plugins and found only one, which was out of date and didn’t have any of the features I wanted. So I spent an hour and a half and coded up my own, and launched the original Award Winning Hosts site.

I then took the plugin and posted it on my blog, available for free under an open source license, for anyone else that wanted to use it. I have created quite a few free plugins, so it was nothing new.

Over the next year, though, those W3Counter web stats for my blog showed a trend… every month, more and more people were coming to the site just for that plugin. It was being downloaded hundreds of times, and there were over 300 comments on the page about the plugin asking for help installing and customizing it, and asking for all kinds of features.

Eventually I woke up to the fact that:
1) I created a product that solved a problem for me
2) Other people had that same problem!

LOTS OF THEM! How you find yourself in a similar situation may be different, but I think both those things are key. If it doesn’t solve your problem you don’t know how to design the product to solve it, and you won’t have the dedication to see it through and make sure it’s a high quality product. And there are lots of ways to find out if others have the same problem. I would’ve known had I looked at the WordPress forum and noticed dozens of people looking for review plugins and not finding any.

Turning It Into a Product

So, I took that free plugin, and the 300 comments people left about it, and:

1) Solved all the problems people were having using it

– Made it dead simple to install
– Fixed all the bugs
– Made the settings page much easier to use

2) Added the features most of the people wanted to see

– Turned select lists into star ratings
– Sorted posts by their average rating
– Handled automated posting so spam wouldn’t ruin average ratings
– Provided a theme with the plugin already integrated

All in all I probably spent 4 hours writing the second version of the plugin which I intended to sell.

The Sales Site

I spent almost as long creating and tweaking the website to sell the product. My audience is the intersection of two groups:

– WordPress users (there are over 2.6 million active WordPress blogs)
– Affiliate marketers

Selling to experienced webmasters, who both know the affiliate marketing world and experienced enough to at least know how to customize a WordPress blog, is different from selling to the average person. Rather than drawing someone in, sales letters and hype set off the alarms that they’re being marketed to as if they’re a newbie too.

So there’s no sales letter here, but a more traditional “web 2.0”-style site: focus on benefits instead of features, provide screenshots instead of hyped copy, and skip the fake-sounding testimonials and pressure tricks (“buy in the next 3 hours…”). It’s simple and to the point, describing exactly what the plugin does for you and how it can be used to enhance your marketing efforts.

Setting the Price

Through years of developing products and services for webmasters, I’ve learned one thing many WSOs reveal other marketers haven’t yet:

If you have a high quality product, charge a premium for it.

I’ve tried charging rock bottom before, as little as possible, and people dismiss the product.

“If it’s only worth $5, it must not be very high quality.”

“If it’s only worth $5, the free alternatives are probably good enough.”

“If it’s only worth $5, the author must not be providing support, since nobody works on pennies per hour.”

WP Review Site proved again that people will pay for a solution to their problems (especially if it’ll help them make money), and that a premium price puts the idea in potential buyers’ minds that it’s a premium product, an order of magnitude instead of a sliver above free alternatives that do less.

I charged $97 for the cheapest license, and $299 for less restrictions on its use. 30% of sales were for the $199 or $299 licenses.

$25,000 a Month Marketing (12,500% ROI)

So how did I turn a simple product like adding star ratings to WordPress into $25,000 in a month?

Launch Everywhere

Blogs are an amazing paradigm shift of the last few years. If you want to reach the tech savvy, the website builders of the world, you go to blogs. They’re where they write and where they get their news. And since blogs have a voice, unlike static websites of the last decade, their recommendations carry weight.

So what I did was make a post at some forums asking what blogs people read to learn about affiliate marketing and blogging. With a simple question, I found where my target market spends its time online.

I then headed to each blog and looked for an advertise link, and also headed over to Business-Matter.com too. I contacted the top 3 that covered my overlapping market (blogs that talk about marketing and blogging) and paid them a few hundred dollars each to write a review of my product and release their posts during the same week.

For less than $1200, over 100,000 of those ~2 million potential customers in my target market became aware of a solution to their problem.

Get Coverage For Free

But there are many more than 3 sites reaching my market, but many of them don’t have the thousands of subscribers to warrant paying a lot for a sponsored review. Instead, I contacted the top dozen and offered them a free copy of the product in exchange for a review. Since these bloggers spend their time writing about marketing and blogging, they’re part of my target market too, and most of them took me up on the offer.

Within a week, over a dozen blogs reaching my target market had written posts about it. Since it really is a high quality product, that solves the problem people have, and is extremely easy to use, all those reviews were both authentic and glowing.

The orders rolled in.

The Webmaster Marketplace

Over the last two years, the “webmaster marketplace” concept has really taken off. With coverage in the New York Times and other mainstream media, marketplaces like SitePoint’s and WF’s own WSO forum, now reach tens of thousands of webmasters or more every month. For just $20 or so a piece, I listed WP Review Site in every marketplace I could find.

The orders rolled in.

Turn Happy Customers Into Sales Reps

What marketing success story could be complete without an affiliate program of its own?

My product solved a problem and did it well, so in under two weeks I had a legion of 100 satisfied customers begging to earn a commission to tell their friends about it. I set up an affiliate program in under an hour at Clixgalore and sent out an e-mail to the customers announcing it.

Just two days later, another two dozen blogs had written about the product, this time with affiliate links. But they were spreading the word for me.

I no longer have to spend any money advertising to bring in new customers. I now have over 100 affiliates doing that work for me, just two weeks after opening the program.

The Key Take-Aways

The effect of all this occurring in under two weeks, saturating the blogs my market reads by both paying bloggers, providing review copies, and getting affiliates to blog about it by a commission, is summed up by this quote left on another forum in response to a post I made about something else entirely:

I saturated the blogs so well in those two weeks that customers were seeing posts or ads for my product multiple times a day at the different sites they frequent… and multiple exposure is how you turn prospects into customers.

$25,000 in profits later (over $27,000 in sales), these are what made that happen:

1) Build a product that solves a problem both you and others have
2) Make sure it’s easy to use and of high quality
3) Find out what sites your target market visits and advertise on them all
4) Give review copies to bloggers for free exposure (e.g http://business-matter.com )
5) Use webmaster marketplaces.
6) Turn satisfied customers into your best sales people

I hope to edit this post and refine the advice over time so that it’s easier to get something out of it. I hope this is useful and helps someone else market their own product as well!

If you have any question or contribution, please drop them in the comment section below. I will be checking this post regularly and would be happy to answer you.