Selling Open-Source Products Requires Sales & Marketing Skills
While exploring ways to monetize react-admin, our widely-used open-source project, we learned that engineering prowess alone isn't enough. Developing sales and marketing skills is critical to turning such a project into a profitable venture.
This article is the fourth in our series about establishing an open-source business.
- Turning Open-Source Into Profit: Our Journey
- Anatomy Of A Profitable Open-Source Project
- From Open-Source Project to Marketable Product
- Selling Open-Source Products Requires Sales & Marketing Skills (this post)
- Documentation: The Key Enabler For Open-Source Success
Creating a tool and selling a product demand distinctly different skill sets. Our initial attempts, driven by the belief that engineering skills would suffice for profitability, were naïve. Here's a revelation: it doesn't work that way.
A lot of software engineers think that if they create a good open-source library, it will automatically become popular. However, this is not true. To become popular, you need to work hard and sometimes be a bit lucky. Most open-source projects need a lot of marketing to get noticed by more people. Also, it's important to know that some open-source libraries that are popular are not always the best in terms of technical quality.
Another common fallacy is that adding a paid product to a popular open-source project guarantees sales. Simply attaching a price tag, adding a checkout button, and assuming the sales will follow is a mistake. Convincing people of the value of your product and making sales is a time-consuming and costly process.
We confronted these illusions head-on.
Our open-source library, react-admin, used for building admin interfaces, saw organic growth in its user base. It took about four years to be installed in nearly 12,000 projects worldwide, primarily through word-of-mouth. During this period, our team consisted solely of software engineers.
In 2020, we developed React-Admin Enterprise Edition, a paid product for react-admin users. We set up a landing page, an online store, and announced it on Twitter and our blog. Our excitement was palpable.
To our surprise, the initial response was underwhelming. We had a few sales, a few leads, a few abandoned carts, but nothing significant.
Effectively selling a product involves comprehensive business development efforts. These tasks include:
- Finding Prospects: Identifying potential customers who might benefit from the product.
- Qualifying Prospects: Assessing the potential of leads to determine if they are likely to become customers.
- Lead Nurturing: Building relationships with potential customers, even if they are not ready to buy immediately.
- Responding to Inquiries: Handling incoming calls and messages from potential or existing customers.
- Conducting Product Demonstrations: Showcasing the product to potential customers to illustrate its features and benefits.
- Sending Reminders and Follow-ups: Keeping in touch with leads and customers to maintain interest and move them towards a purchase.
- Negotiating Contracts: Discussing terms and prices with customers to finalize sales agreements.
- Processing Payments: Managing the financial transactions for sales, including collecting wire payments.
- Sales Reporting and Analysis: Tracking sales performance and analyzing data to identify trends and areas for improvement.
- Sales Forecasting: Predicting future sales trends to guide business planning.
- Customer Relationship Management (CRM): Managing interactions with current and potential customers to build lasting relationships.
- Cross-selling and Upselling: Encouraging customers to buy additional or more expensive products.
- After-Sales Support: Providing ongoing support to customers after they have made a purchase.
- Customer Feedback Collection: Gathering and analyzing feedback to improve the product and refine sales strategies.
- Collecting Market Feedback: Understanding the market's response to the product and using this information to enhance sales tactics.
- Attending and Organizing Events: Participating in events to network and promote the product.
Many companies, especially large ones, prefer personal interactions before considering a SaaS product. Some require extensive paperwork to register you as a vendor.
These activities are time-consuming. For a product like react-admin, which has around 600 paying customers, these tasks demand about half a full-time salesperson's attention. Luckily, we already had a sales professional in our team who adapted quickly to these demands.
A sales team can't effectively sell a product if potential customers are unaware of it, don't understand its purpose, or haven't been adequately targeted. This is where marketing comes in. Their responsibilities include:
- Developing a Digital Marketing Strategy: Crafting a comprehensive plan that outlines how the product will be promoted across various digital channels (e.g., social media, email, SEO).
- Designing and Producing Marketing Materials: Creating visual and written content that effectively communicates the product's value.
- Website and SEO Optimization: Ensuring the product's website is user-friendly, visually appealing, and optimized for search engines to increase visibility and traffic.
- Creating Content: Developing engaging content tailored to different platforms to capture the interest of the target audience.
- Managing Social Media Presence: Creating and curating content on social media platforms, engaging with followers, and building a community around the brand.
- Announcing Product Updates: Using various channels to inform customers and prospects about new features and updates.
- Email Marketing: Developing and sending regular newsletters and promotional emails to engage existing customers and nurture leads.
- Fostering a Community: Building and nurturing an online community to encourage engagement, loyalty, and advocacy.
- Managing Advertising Campaigns: Designing and executing digital advertising campaigns across platforms like Google Ads, social media, and other relevant online spaces.
- Engaging with Influencers and Bloggers: Partnering with influencers and bloggers to reach broader audiences and add credibility to the product.
- Organizing and Attending Events: Participating in relevant industry events and webinars to increase brand visibility and networking opportunities.
- Exploring Market Opportunities (like Partnerships): Seeking strategic partnerships and collaborations to expand market reach.
- Data Analysis and Reporting: Regularly analyzing data from various digital marketing campaigns and activities to measure effectiveness and ROI.
- Conducting Market Research: Continuously researching market trends, customer preferences, and competitor activities to inform marketing strategies.
- Tracking and Analyzing Business Metrics: Monitoring and evaluating key performance indicators to refine marketing tactics and strategies.
- Reputation Management: Monitoring online brand mentions and reviews to manage and improve the brand's public perception.
The size of a marketing team varies based on the desired rate of business growth. Our initial goal was simply to achieve profitability, so we initially let engineers handle marketing (ineffectively), before hiring a full-time Marketing assistant, who worked across two products (react-admin and GreenFrame).
We were conscious not to overspend on marketing to avoid overwhelming our capacity to provide quality service. Our product is support-intensive; rapid growth could strain our support team before we could adequately expand it.
Finding the ideal candidates for our Sales and Marketing teams was challenging. We needed non-technical staff who could grasp our technical product and cater to an international market. Moreover, we sought individuals eager to learn in the fast-evolving fields of digital marketing and sales.
We were fortunate to have Caroline as our Marketing assistant and Jeremie as our Head of Sales. Both have been invaluable, demonstrating intelligence, hard work, and dedication.
With Caroline and Jeremie focusing part-time on react-admin, the costs for Marketing and Sales constitute about a quarter of our total HR expenses. This investment has been worthwhile.
Once we assigned dedicated Sales and Marketing personnel to react-admin, we observed a significant increase in sales. Since 2020, react-admin customers have generated approximately 1M€ in revenue.
While some tech companies manage to sell their products with only engineers, we realized we're not among them.
Marmelab, fundamentally a software engineering firm offering web development services, recognized the necessity of having dedicated Sales and Marketing teams when we ventured into product sales. Although we're still learning in these areas, we're on the right path.
Looking back, significant business from open-source projects wouldn't have been possible without these teams. In future open-source endeavors, we'll ensure to incorporate a sales and marketing strategy from the outset.