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Monetizing your IP on AppExchange: The first steps

Nov 14, 2017 | Admin, Latest News, Service Cloud


Salesforce’s AppExchange is a unique platform for businesses to present their product or service in a highly visible manner. While many have tried, no other software vendor at this scale has even come close to providing their partner ecosystem with such a robust platform on which to showcase their expertise and capabilities. And that’s what makes AppExchange so special.

The power of the AppExchange is a point of leverage for many companies; the way in which you choose to maximize the AppExchange platform depends entirely on your go-to-market strategy. Bill Loumpouridis, AppExchange Entrepreneur and Client Partner for Simplus, is an expert on building successful AppExchange products and has identified a few key questions that any business should ask themselves before they take the dive into the AppExchange economy.

Do you have a clear objective?

In his TED Talk “How Great Leaders Inspire Action”, motivational speaker Simon Sinek addresses one overlying concept throughout his presentation: start with why. Most companies market themselves based on what they do and how they do it. Few actually acknowledge why they are doing it.

It’s one thing to have a great idea. It’s a completely different thing to articulate why you’re doing it. Bill agrees with Simon: the “why this” is the first step that determines goals, strategies, and tactics for taking a product to market.

“It’s so important to look beyond what it is you’re doing and ask yourself why you’re doing it,” Bill said. “If you know why you’re doing something, then the how and what will follow.”

Now, there doesn’t have to be applied to a life-sized philosophical reasoning for creating a product or service. Let’s bring it down to scale—why do you want to put your business on AppExchange? The reasons may be one or many:

  • Are you wanting to be the next big thing in a particular product category?
  • Are you simply looking to conjure up more leads?
  • Or are you looking to build a highly differentiated brand identity?

Your answers to these questions will drive the scope, investment and effort that will be required to succeed in your AppExchange endeavor.  

How are you going to brand it?

Whether you create a separate brand for your listing should depend on the scale of your ambition.  The “next big thing” in a product category deserves a separate brand.  “Branding is expensive, so make sure your idea merits a separate brand and you’re prepared for the dilution it may bring to your core brand,” Bill said.  

Otherwise complementary AppExchange listings provide a tremendous opportunity to reinforce your core brand if solutions are properly aligned.  IP that is complementary to your core is ideally suited for this.

Are you going to charge for it?

Wherever you are listing your app, you have the option to either charge the customer for it or offer it as free-to-use. Each avenue has its benefits, and it’s important to know which option you are choosing before listing on the AppExchange.

If you choose to charge for your app, you’ll be pulling in direct revenue with each purchase or subscription. However, that does not come without a price. You are going into the product business, and you need to be ready for the investment that implies.

Your key metric is revenues directly to that product. It’s not uncommon for fledgling companies to discount or give away services to get their product proliferated in the marketplace. It goes without saying that going down this path can impact profitability. Furthermore, if someone pays for your product, they are going to expect support for that product, which costs you money. Paying customers will also expect that your app will get better over time, which are the kind of table stakes you need to consider when deciding which path is right for you.

“Basically, charging for your app right out of the gate is a ‘go big or go home’ proposition,” Bill said. “If you’re going to charge, there’s a high level of expectations and a high bar to meet. Customers have big expectations for what they are paying for.”

The alternative is offering a free app for customers. It’s a lot less costly to go down this route, but in return, you aren’t receiving any direct revenue. This approach can be considered more of a lead generation and brand awareness tactic. It’s a great way to market your IP and test the waters for traction on the idea.

Is your app going to be native or non-native to Salesforce?

The way in which your app is going to interact with the Salesforce platform is the next thing you should consider. Is it going to live inside the platform or support the platform as an auxiliary service? For example, one popular native app, Conga Composer, is a document generation and reporting extension that operates entirely within Salesforce. An example of a non-native application would be Salesforce Inbox, which connects Salesforce to your external email service.

Naturally, the closer you are to the Salesforce core, the more relevance or wider reach you will have. However, you don’t always have that luxury. You may have expertise is in another area that you wish to extend your influence into. When it comes down to monetizing your IP, you need to play to your strength, as it is your core competency and will probably yield the best output.

Do you have reviews?

One of the best ways to monetize your project is to focus on gathering many five-star reviews for your app. Studies show that products with more than 50 reviews have a 4.6% higher conversion rate than those with less than 50 reviews. These reviews should be done at the time of service and should be very easy for customers to complete. Ted Paff, CEO of CustomerLobby, found that reviews solicited at the time of service can have up to 90% completion rates.

“We collect data at the end of each project,” said Ryan Westwood, CEO of Simplus. “This allows us to understand our customers’ preferences, help us know what we’re doing well, and rectify any concerns that the customer may have during the project.”

What next?

With your “why” addressed, determining the “what” of your market positioning and branding can logically follow.  Giving your app away in the early stages can reduce costs and more importantly reduce expectations, and allow you to fine-tune your value proposition while building references that will come in handy when you’re ready to turn on the revenue spigot.  A crawl-walk-run approach can conserve cash and provide cover.

“The AppExchange provides unique access to all Salesforce customers, and the opportunity to address this market can be a massive opportunity for the right product positioning and strong execution”, Bill said. “5 million downloads and counting. How can you beat that?”



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