Software upgrade efforts are basically renewal campaigns with a twist - you can market to your buyers who have paid for your product, users who have not paid, and even buyers of competitive products. Let's look at each of these cases.

The software upgrade effort to your buyers obviously involves the use of your house file. Assuming that a functional database and key coding system is in place, an effective upgrade program will involve multiple mailings to the buyers within your house file, flagging users as they respond. Flagging the respondents will allow you to suppress them, re-mailing only those who have not yet taken advantage of your special upgrade offer.

A common question asked is 'how many times do I mail a renewal offer to someone who has not yet responded?' A seasoned direct marketer will find no surprise in the answer: until it is no longer profitable. Some of the magazine publishers find it profitable to mail their renewal offers over ten times. A good key coding program will allow you to track the performance of each successive mailing, enabling you to halt your renewal efforts as your response rates change from profitable to marginal.

Another technique that can be employed (also used by the magazine publishers) to help initiate the call to action is to lessen the premiums as you re-mail to those who have not yet responded. For a software publisher, this might translate into reducing the number of free add-on utilities bundled with the upgrade, or even increasing the overall price of the original offer. With this technique, the customer will see that they are truly missing out on a good offer, helping expedite their decision to upgrade their product.

What about those individuals who are using your product without an actual purchase? Many software publishers have been implementing an 'Amnesty Upgrade Program', which allows a software user without the proper proof of purchase to take advantage of the upgrade offer and become a registered buyer. Who wants to refuse a customer ready and willing to give you money! Consider the lifetime value of the customer -- such a program will generate business and allow you to add new buyers to your database that can be sold future upgrades in the years to come.

How else can new buyers be added to your database? With some minor adjustments, your same upgrade piece can be used as a prospecting tool, mailing outside lists under the theme of a 'competitive upgrade.' In this situation, you are soliciting a call to action from users of competitive products.

Obviously you can't directly rent your competitors list, however, a knowledgeable broker in the software market should be able to uncover list universes that will get you very close the mark. For example, if you are implementing a competitive upgrade program for a contact manager, a list targeting portable computer users, such as Mobile Office, would be an excellent test.

Again, it is critical to track and measure outside list performance with your competitive

Another method for adding new buyers is increasing the capture rate of names. Programs to capture your valid, yet unregistered buyers, must be implemented at all customer contact points. This includes your technical support group, customer service group, bulletin board system, fax-response system, forums on commercial networks and The Internet, user groups, etc.

How about an unbiased evaluation of your current registration card? Make sure it is postage paid, since that is the very first barrier that will affect your return rate.

Also, keep in mind that the response rate is inversely proportionate with the number of questions asked. Capture the critical information -- name and address data and machine platform. Business and consumer demographic data, such as SIC code, age, income, and more can all be determined via profiles and file enhancements. Even a reduction by one or two questions can make a difference.

Many software publishers are finally treating their registration cards as direct response mechanisms -- altering their look and feel, enhancing layout and font selection, and adding traditional direct mail push buttons such as 'free' and 'act now'.

How about a premium with the return of the registration card? Remember, you must factor lifetime customer value. Some software publishers offer a free quarterly newsletter upon return of the registration card. Others offer participation in a free monthly drawing for products.

Some firms seek out strategic partnerships with other software companies who would offer a free limited edition of their product upon registration. In this situation, both firms benefit with the capture of the name with the firm offering the free limited edition having an excellent upgrade prospect.

Electronic registration is also being explored by many software publishers, since modems are a fairly standard feature on new PC systems being sold today. They are also at a price point of about $70, making them inexpensive add-ons for those who have not yet jumped onto the electronic superhighway. Many firms are incorporating programming within their installation modules that will seek out a modem, ask a few questions, and then electronically transfer the data via an 800 number to a centralized system. This methodology for capturing names is both fast and efficient.

An important point regarding your software upgrade efforts - push the benefits of the new version. Understand, ahead of time, what customers are looking for in their upgrades Speed improvements, reduced system requirements (leaner and meaner), and compatibility with new system software are important in addition to easier use and new features. All of these items, however, must be translated into customer benefits, showing them how it will enhance the way they use their system and accomplish certain tasks.

Well, you should be specifying new and useful features to your software engineering group so you can take 'new and improved version 3.0' from beta-release to golden master as soon as possible! Just remember one final rule with your upgrade marketing efforts -- it's about building relationships with your customers, and the stronger those relationships, the greater the profits from your installed-base marketing activities.