the recession. Stannard, a chemist-turned-programmer, founded the company in 1994. The following year, he began selling SmartDraw exclusively from a commercial website he created. Today, Stannard says the company has 35 employees, with no investors, no debt, and no outside funding.
“SmartDraw was conceived as an Internet marketing company,” Stannard says. From the beginning, he focused his program on the broad market of infrequent users and do-it-yourselfers, and avoided the market for graphic designers, architects, and other full-time professionals.
“Our growth has been driven by Internet marketing processes,” Stannard says, including a system that tracks online visitors and the actions they take on the SmartDraw website. He tells me that SmartDraw’s website gets about 90,000 visits per day, and about 12,000 visitors download a trial program that demonstrates how the graphics software works. About 200 of those convert to sales, with the SmartDraw program selling for close to $200 a copy.
When I first met Stannard five years ago, the company’s annual sales were roughly half what they are now. But at that time, Stannard told me he thought it was possible to increase the company’s revenue to $100 million by 2010. But the exponential sales growth he envisioned never materialized, and by 2006 Stannard says the company was intensively studying its customers’ purchasing patterns.
In studying SmartDraw’s online sales, Stannard says 90 percent of the company’s software sales were completely automated and required no human interaction or involvement.
“Our average order size was 1.1 units,” Stannard says. In other words, the company was great at selling one copy of its software to one person—one at a time. Stannard says an internal debate he had in 2006 with Dan Hoffman, SmartDraw’s Vice President of Marketing, “about whether we were really competing with Visio” led SmartDraw to conduct an online market survey that showed only 14 percent of SmartDraw’s trial users “had even heard of Visio.”
The outcome of their research was to develop a new version of SmartDraw, and as Hoffman tells me, “It had to be different than anything else that had been done.”
With the introduction of SmartDraw VP, Stannard says the company also overhauled its sales strategy by expanding its sales team. To encourage companies to place bigger orders for 100 copies or more, the company is inserting a sales person in what was once an automated process to offer free customized training for customers who make bulk purchases.
“Our goal is to get mass adoption with a customer,” Stannard says. “Instead of selling to one user, we want to sell to every desktop.”
Getting mass adoption for SmartDraw VP, Hoffman says, “is what I call, ‘One small click for man—one giant leap for visual processing.”
