SaleSoft, Inc. Marketing Mark eting Management -Group 5
Agenda
SaleSoft’s Dilemma Case study Overview Benefits of PROCEED Benefits Benefit s of of Trojan Trojan Horse Pricing Project Timelines Recommendations
SaleSoft’s Dilemma
SaleSoft is currently marketing PROCEED – a Comprehensive Sales Automation software
The Trojan Horse Opportunity
SaleSoft’s CEO – Greg Miller
Continue with PROCEED for select customers or Launch TH to a much larger customer base
Sales Automation Industry
Provides software to Automate processes in sales order cycle
Market ◦
$1 Billion; growing 40% annually
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B2B Consumer Preference ◦
Buy turn-key solutions from one vendor
Types of SA Solutions
CMS ◦
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Low-end solution, e.g. ACT by Symantec Used by salespeople differently
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CSAS ◦
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High-end solution, e.g. PROCEED Integrated, collaborative solution for the entire organization Multi-level, cross-functional, team-selling approach
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In June 1994, no integrated CSAS products available
CSAS Buying Cycle
CSAS Vendors
Partnership
SA Consultants
PROCEED SMRP Allowed custom ers t o autom ate t heir entire m arketing, sales and custom er service operations Ready- Three m odules Estim ated- $1 Billion to roll out ot her 5 m odules in 8 m onths
SaleSoft - financials Founded in 1993 , to d evelop and m arket CSAS system s
The Trojan Horse Need f or a Selling Managem ent Softw are Sales Forecast Review sales closure dat es Manage gaps in perform ance Analy ze sales act ivit y Review com pet itive behavior
Why ?
Get new broad-based customers Gain quick sales Generate needed revenue
Benefits of PROCEED- CSAS
Saving due to reduced cycle time
Company
Old cycle New Sales time cycle time
New sale
A (Fin Services)
120 days 114 days $120 M
$126.32 M
B (Comp H/w) 180 days 165 days $350 M
$381.82 M
Benefits of PROCEED- CSAS
Saving on retaining sales people
Company
Employee No of Sales per Savings retaining productive employee days per day
A (Fin Services) 2.4
60
.003M
.432M
B (Comp H/w)
90
.0065 M
7.677M
13.125
Benefits of PROCEED- CSAS
Saving due to reduced training time
Company
New No of Sales per retaining productive employee days per day
A (Fin 21.6 14 Services) B (Comp H/w) 104.125 20
Savings
.003M
.9072 M
.0065 M
13.53625 M
Expenses A(Fin Services) Proceed License fee $ 600,000 Implementation & $180,000 Training Support and $ 36,000 maintenance Hardware $1,500,000 $ 2.316 M
B (Comp H/w) $1,440,000 $ 430,000
A (Fin Services) Reduced cycle time $ 6.32 M Retained people $ 0. 432 M Reduced cycle time $ 0.9072 M $ 7.6592 M
B (Comp H/w) $ 31.82 $ 7.677M $ 13.53625 M $ 53.03325 M
$86,000 $3,600,000 $ 6.33 M
Customers’ perceived value of TH
PROCEED and TH are targeted to different markets ◦
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TH lies between CMS and CSAS TH’s customers need specialized sales product Enables sales forecasting process Manages the sales pipeline better Reduces the selling time cycle by 2-3 %
Customers’ perceived value of PROCEED
Allows sales persons complete functionalities without the whole system Compatibility with Microsoft Windows = large base of customers Effective and efficient means for rapidly transferring qualified leads Provides management with data for evaluating marketing campaigns Consistency and timely availability of all marketing and sales info Tracks the usage and inventory of marketing resources Provides management with continuous feedback from customers Generates new sales opportunity from existing customers Tracks all customer services issues to the ultimate resolution Provides repository for all customer information
Difference between TH and PROCEED TH is focused only on sales Quantifying the benefits of TH is easier Selling process is simpler for TH
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Time taken to sell the TH is one-third
TH needs minimal customization Marketing cost per TH user is one-third
Pricing Strategies
Markup Pricing Target-Return Pricing Perceived Value Pricing Value Pricing Going-Rate Pricing Auction Type Pricing Premium Pricing Penetration Pricing Economy Pricing
Price Skimming Prod uct Line Pricing Psych olog ical Pricin g Opt ional Pricin g Capt ive Pricing Product Bund le Pricing Prom ot ional Pricin g Geograp hical Pricing
Price/Quality Relationship High Price
Low Qualit y
High Qualit y
Low Pri ce
Pricing Strategies
Markup Pricing Target-Return Pricing Perceived Value Pricing Value Pricing Going-Rate Pricing Auction Type Pricing Premium Pricing Penetration Pricing Economy Pricing
Price Skimming Prod uct Line Pricing Psych olog ical Pricin g Opt ional Pricin g Capt ive Pricing Product Bund le Pricing Prom ot ional Pricin g Geograp hical Pricing
Pricing Strategy
Markup Pricing ◦
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Cost per user $1,000,000 / 4000 users = $250 per user
Markup percentage 20% 30% 40% 50%
Price $ 315 $ 360 $ 420 $ 500
Pricing Strategy Target-Return Pricing
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Unit Cost = $250 per user Investment Capital = $1.8 million
Desired Return 20% 30% 40% 50%
Price $ 340 $ 385 $ 430 $ 475
Pricing Strategy
Perceived Value Pricing ◦
Base Price = $400 per user
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Premium on Sales Forecasting $ 30 Reduced Selling Cycle $ 50 Lead Generation $ 40 Total Price
$ 520
Pricing Strategy
Premium Pricing ◦
$1,000 and above
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Penetration Pricing ◦
Between $250 and $400 initially, gradually raised
Price Skimming ◦
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Initially $1000, reduced to $400 gradually
Timeline- only PROCEED
Timeline- PROCEED + TH
Final Recommendations To go all out with Trojan Horse
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Development Team free to work on PROCEED after 3 months Sales Team may need to expand
Pricing ◦
Perceived Value Pricing - around $520
