Chapter 21

Marketing basics

“This job would be great if it wasn’t for the f-cking customers.” Randal Graves, Clerks

An oft-repeated truism is that it’s not a lack of features that kills a product but a lack of customers. That being the case, these final five chapters focus on the two critical steps that convert a potential customer into an actual customer, first by getting them to visit your website and, once there, convincing them to purchase your app.

Types of market

In his book, The Four Steps to the Epiphany, Steve Blank1 defines three types of market for a product: an existing market, a new market, and a re-segmented market.


The types of market for a product

It’s important to identify which type of market your app falls into and where you want to position it, as each type demands a different approach to marketing. Before you can do that, a solid understanding of your prospective customer needs and behaviours is necessary. You should already have this knowledge from your user research (chapter 7).

Existing markets

An existing market has established competitors, known customers and a standard set of features and other criteria against which competitors are compared. If it has a name (‘enterprise CMS’, ‘social media monitoring’, and so on) it is an existing market.

On the positive side, there is a confirmed base of customers with proven needs, acquisition channels and sales tactics: you can more or less look at what successful competitors are doing and imitate them. On the negative side, you face incumbent competitors who have defined the market and shaped customer expectations around their strengths.

In this market your app will prosper if you can convince customers that your app is better at meeting the set of criteria defined for that market space: it is faster, easier or offers an incremental improvement in one or more features. You can even discover which features are most important to the market and where incumbents are failing. Ask customers directly or conduct research on customer satisfaction websites and social media.

*Your MVP app will find customer acquisition easier when targeted at a subset of an existing market – see the later discussion on re-segmented markets

Focus your marketing communications on differentiation. Compare features directly with the competition and exploit their weaknesses, ideally those that your market has identified and prioritised for you. Keep in mind that a direct comparison, whether you make it or your competitors do, makes it difficult for an MVP app with few features to compete in an existing market*.

You will also need to establish some credibility and reduce the perceived risk of a new start-up: incumbents usually have a long list of existing customers, case studies and brand awareness. Pursue early positive quotes from relevant thought leaders, court positive quotable reviews from respected publications, and consider loss-leading freebie accounts for companies that agree to appear on an early client list.

The high level of marketing noise from existing competitors will oblige you to invest heavily in getting your app noticed, whether it’s through straightforward advertising, SEO, social media or some other approach.

Once your name is out in the market you can quickly ascertain how successful your app is. Customers of existing markets know what they want and consequently your app will succeed or fail quickly (the best way to fail). A successful app in an existing market will generate immediate revenue and can expect linear growth.

New markets

A new market is one where your app enables people to do something that they weren’t previously able to, perhaps through a real technical innovation that offers a new form of convenience or dramatically lowers skill requirements.

A genuinely new market will contain no competition. You won’t be able to compare your app to existing products, except for perhaps a few other start-ups. Similarly, there will be no neatly defined set of customers waiting in eager anticipation, except for a handful of early adopters.

With no competition and no customers, the features of your app are not particularly important. Instead, your marketing should focus on defining the market and the customers: what problem are you solving, and for whom? You may be able to do this by recontextualising an existing known market: the iPad, for example, is similar to a laptop but with a step change in size, weight, battery life, ease of use and convenience.

You’ll need deep pockets to educate users on the shift in the market and how it benefits them. This is particularly difficult and time-consuming: convincing customers that they have a need they don’t know they have.

Target the early adopters with a position based on your grand vision and technical innovation. These may be your only customers for many years after launch (see Twitter or Foursquare) so you’ll need significant investment to fund the slow adoption until the market hopefully hits the mainstream. If it does (and that’s a big if), after the years of relatively flat growth you can expect an increase in customers that will accelerate over time.

New markets are large risk/large reward, and you’ll need patience and money to ride out the protracted market adoption.

Re-segmented markets

An existing market can be re-segmented in two ways: price and niche.

Your app can slice the bottom off a market by providing reasonably competitive features at an appreciably lower price, enabling new customers to enter the market. Established companies in existing markets are prone to abandoning the lower end of a market as they strive for large-scale growth, but be prepared for them to defend their turf.

You’ll need to do the sums to check that there’s money to be made in your new low-cost segment and, in turn, your marketing material must convince customers how you can credibly offer similar features at a lower cost.

If your low-cost app successfully captures the bottom of the market, it can use the sustainable revenue to gradually add sophistication and slowly expand market share to higher-end customers, approaching a larger existing market from beneath.

The second form of re-segmentation targets the unaddressed needs of a smaller niche market. As with the low-cost market, larger companies tend to ignore niche markets in their quest for board or shareholder-driven growth, but they won’t give them up without a fight.


Yammer re-segmented the social networking market into enterprise social networking

Choose a niche with fervent customers who are able and willing to pay to have their specific needs met. Your marketing should focus on differentiation, not just of your app features, but also on the unique characteristics of the niche market that more generic apps don’t address.

The typical growth profile of successfully re-segmented markets is attractive to entrepreneurs with little money: a slow but steady initial growth later followed by an ever steepening adoption curve.

Re-segmented markets have the added benefit that they are usually easy to test. Create an AdWords advert that succinctly describes the niche (or lower cost) and your solution, and target it at your segment of known users: the click-through rate will give you an indicator of demand. This test isn’t as straightforward in a new market, where you can’t easily target customers, or an existing market, where your advert will disappear into the noise or be outbid from the first page.


The start of marketing doesn’t signal the end of development. Subsequent iterations learn from the results (or lack thereof) of marketing efforts and customer feedback. With this recurring corroborated knowledge fed into the app development, each release should bring you more traction with your early adopters. If you see few positive results in the customer data after a number of increasingly customer-optimised iterations, it’s time to consider a pivot in your app proposition.

The term may not be to everyone’s taste, but it does evoke the appropriate imagery. A pivot uses the knowledge you’ve gained to reposition the focus of your app, keeping the successful parts and changing everything else.


Pivots tend to happen after feedback and market-validated learning has been gathered from a few iterations

The three main types of pivot are:

  1. By market type. The market type of your app isn’t fixed, and with appropriate changes to positioning and feature prioritisation you can move smoothly from one niche segment to another, or from an existing market to a low-cost re-segmentation, for example.
  2. By customer problem. As you collect feedback from customers you may identify a common unaddressed need that a realignment of your app technology can profitably solve.
  3. By feature. You may find that customers keenly use only a small subset of your available features, or use your app for unexpected purposes. Learn what your customers are actually doing and refocus app development to better support it.

The key to any successful pivot is to identify recurring, actionable trends in your data; don’t base pivots on unproven suppositions or one-off data points. When you do spot a pattern, be decisive and be prepared to discard some of your previous hard work.

Examples of successful pivots are everywhere in the world of web apps: Flickr, PayPal, Groupon, YouTube and Twitter all at one point changed course from their original idea.


I know what you’re thinking – persuasion sounds a little evil – but this isn’t about twisting arms or coercing unwilling customers with lies: it’s about the creation of ethical communication that best sells your app. Even companies that don’t necessarily need to persuade people to use their products, like Apple and Facebook, employ teams of people dedicated to choosing words that give them the best results.

The following list of techniques can be applied to your website, adverts, emails and all other forms of communication. While they have proved successful for many companies, there is no guarantee that they’ll work for you. The only way to find out is to test them in your market (see chapter 24 for details on A/B testing).

Many of the techniques are derived from Robert Cialdini’s Six Weapons of Influence2.


Our evolutionary past designed us to detect and investigate patterns, when seasonal crops and predictable animal movements were critical to our survival. Whether we’re learning a new language, musical instrument or historical dates for an upcoming exam, repetitive patterns are key to retaining information. This isn’t an excuse for lazy marketing: you need the customer to draw the same conclusion (“this app makes X five times faster”) through at least three different on- and off-page sources.


37Signals’ website for their Highrise app uses repetition to market its ease of use: in a quote, a headline and through screenshots

Credible proof

You can tell customers that your app delivers all kinds of benefits, but they’ll expect proof. This includes customer testimonials (social proof), data, graphs (as in a third-party comparison of benchmarks), screenshots, videos and interactive demonstrations. Longer case studies can also be powerful: good stories, especially those that focus on negative examples (“Company X was losing $1 million a year”) are particularly memorable. Assertions can be made more credible with reasoning: “Five times faster” is less credible than “Five times faster… because of our new memory cache technology”.

Value comparison

Help to set the context for your app pricing with a comparison. Think carefully before comparing your price to the competition: if the price is higher, the app may appear worse value; if the price is lower, you suggest substandard or lower quality. Instead, compare the price to something frivolous (though a beer or a coffee is now clichéd) or, for higher priced apps, compare against the cost of not buying the solution.

Group appeal

The success of community-driven websites clearly demonstrates our desire to belong to a tribe. When people identify with a group they become easier to influence3, even if their group membership is purely aspirational. Segment your marketing communications (for example, into social media managers, web entrepreneurs, data analysts) to potentially improve response rates.

Scarcity or exigency

For physical products, scarcity often denotes quality and can result in increased sales and prices. Virtual web apps don’t suffer from the same limited supply problems but can still use scarcity as a persuasion tactic. In March 2011, tens of thousands of users signed up to a web app that was yet to explain what it did, simply so that they could reserve their unique username4. In a different form of scarcity, Forrst5 only accepted new members who had been referred by existing members, adding an element of exclusivity. Be careful with false scarcity though, especially in high-competition markets: it’s easy to lose potential customers who are unwilling to wait or who distrust the artificial supply conditions.


This is the basis for the ubiquitous risk-free trial that companies like to offer. A person is more willing to make a big commitment if they first make a small one. The simple postal code and email address form on some web apps is not only collecting data for communications, but is also laying the ground for a larger commitment later on.


As every successful political candidate knows, likeability is a strong influence on opinion: people are more inclined to say yes to people that they like. Many websites confuse likeability with attractiveness, and mistakenly use stock photographs of physically attractive people in an effort to exude likeability.

In fact, studies show that likeability is highly correlated with similarity and reciprocity6. People like people who are similar and familiar to them, and who like them back. To take advantage of this you need an excellent understanding of your customers: what’s important to them, what language they use and how formally they like to be addressed. Phrase and design your marketing materials so that they accurately reflect the style of your customers.

Calls to action

Every page of your marketing website should serve a purpose. For a web app, you normally want the user to take the next step towards signing up. The call to action is the part of the page that helps the user to take this action. It is the bottleneck in your app’s sales process and deserves appropriate consideration.

To avoid analysis paralysis7 each page should present the user with the minimum number of options. A single call to action gives the user the simplest choice, but a second, informational or noncommittal call to action is often added to engage customers who are not yet ready to sign up.

It is vital that you fully understand your particular buyer decision process and tailor the calls to action accordingly. The typical research-evaluate-purchase process might be shorter for low-cost consumer purchases or longer for high-end enterprise software. A solitary Buy Now button on the landing page of a $5,000 per month enterprise application is not likely to be as effective as a call to action that launches a demo or commits the user to a phone call.


37Signals’ website for their Highrise app uses repetition to market its ease of use: in a quote, a headline and through screenshots

A call to action is typically styled as button rather than a link, which gives the user the sense of taking an action rather than browsing to another page. Visually prioritise the calls to action on a page through design:

The language of a call to action is equally important. As it’s an action, it should start with an active verb. Typical call to action verbs include: buy; register; sign up; subscribe; find; save; order; compare; and call. The phrase should clearly state what the action is. Don’t use an ambiguous phrase like go, submit or click here.

Traditional marketing advice suggests that urgent words (now, hurry, quick, today) can improve the effectiveness of calls to action, but don’t use these words if they will irritate your particular customer niche: it is better to use their language.

Where applicable, confirm the risk-free result of the action (try it free). Don’t fool the user with a false promise – the result of the action must match the expectation that it sets.

The psychology of pricing

Your app should be priced on value, but there are still subtle tweaks that you can make to encourage purchases.

A product becomes less desirable if it is given away, so don’t overemphasise your app’s free option if you offer one. On the other hand, people are more likely to reciprocate when given a free gift with no strings attached; a time-limited free trial may encourage sign-ups. The perceived value of a gift decreases over time. If you offer a free trial, follow up with the customer during the trial period, not three months later.

It’s difficult to estimate the value of a product, especially one that has no direct competition. We are also susceptible to make comparisons with numbers, even if there is no real basis for comparison. Before announcing the price of the iPad, Steve Jobs reminded the audience that pundits had estimated it would retail at $999. When he followed up that number with the actual $499 price it seemed like a bargain. This is the powerful anchoring effect.

“Why pay $250 for an additional error-prone hard drive when you can use our app to get guaranteed unlimited online backup at $4 a month?”

When faced with a range of prices, a customer often chooses the middle option because it is perceived to be the safest. If you offer differently priced versions of your app, make the middle version the one that you want them to choose (the one that generates the most profit: see chapter 10). This is really just an example of price anchoring, where the lowest and highest app prices provide the anchors.

Customers pay more attention to the leftmost digits of a price8. Even though most of us are acutely aware of the .99 trick, we still subconsciously perceive a disproportionately larger difference between $1.99 and $4.00 than $2.00 and $4.00. We also give less thought to prices if they are round numbers: we are less concerned with the difference between $6 and $8 than between $5.99 and $7.99. In fact, we pay so much attention to the leftmost digit that there may be a negligible drop in demand if a product is increased, say, from $24 to $29. The rightmost digits also influence our price perception9. A 9 reminds us of discounts, 0 (round numbers) of premium products, and a 4 or 7 of a precisely calculated optimum price.


Marketing is a critical step in the app development process that must not be ignored by technically focused app development teams.

Web App Success book coverAlso available to buy in a beautiful limited edition paperback and eBook.

This work is licensed under a Creative Commons Attribution 4.0 International License.