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Aligning your SaaS Product Design, Marketing and Sales Strategies
When you think about your Software as a Service company sales, and marketing strategy you’ll need to consider the product complexity, who is your target customer segment, and what other players will be involved in the sale process(not full 4Ps analysis here). In each of the cases below different levels of effort and cost to market and sale your product(s) is needed. Partner recruiting is selling, which means, leads generation, sales cycle, value proposition, and some form of an inside sales team. Working with the channels requires investments, competing on VAR attention is selling, and the competition is growing with every new SaaS solution developed. Growing SaaS companies like HubSpot, Marketo, ConstantContact and more as well as giants such as Oracle have been already investing in capturing these channels. The alternative of going directly to the customers is not financially viable in the case of a small start-up company selling to the small and medium business(SMB). The complexity of the product will determine how long is the sale cycle, the onboarding process, and the need for Management Service Provider(MSP) participation. Considering whether the product should become a platform requires considering the implications on your go to market strategy like setting and governing the quality of the add-ons(certification) and pricing.
Here are some combinations to look at.
| Vendor Type | Billable Customer | IT Reasonability | Likely Exit Strategy | Product Strategy | Sales & Marketing Strategy |
| Startup | SMB | SMB owner | Building a cash cow – why sell? | Simple, limited functionality, self served | Online, inbound marketing |
| Large Enterprises | Corporate IT Department | M&A (sell to one of the big players: SAP, Oracle, IBM, Microsoft) | Perfecting one use case, or developing strong protected IP – proprietary algorithm | Direct sales. POC/paid pilot, partnering with other solutions. B2B marketing: thought leadership, trade show. |
|
| Young growing company | SMB(<;2000 employees) | MSP/VAR | Going up the market, or M&A through Vertical integration | Building Platform as Service (PaaS), OEM(embed other products) Requires customization and integration with add-on |
Partner recruitment. Referral program. Working with partner on developing strong value proposition and go to market strategies. Sponsored conferences, Webinars. |
| MB | MSP/VAR | IPO, M&A | Become mission critical | Ad above and recruit strategic partners | |
| Large Enterprise developing SaaS | SMB | MSP/VAR | N/A | Medium complexity. Open API, web services, enabling value added services | Partner programs. Account executive to harvest strategic partners |
| Large Enterprises | Corporate IT Department | N/A | Hybrid between on premise and hosted | Direct sales, rebranding |
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I’m sure that there are other combinations of vendor and customer types, product, sales and marketing strategies. However, some combinations could lead to successful outcome while other be disastrous!
Guess what is missing from the MBA program? Sales!
I’m now two and half years into the part-time MBA program with Boston University with a little less than one year to go. One thing that surprises me the most is the lack of Sales Management class in the core program. I was educated about managerial accounting, finance, operation management, organizational behavior, marketing, economics and corporate strategy, but not a word about sales. When I got to the time to select my electives I knew that something was missing, so I found only one class called Entrepreneurial Sales Strategy (that I later heard was offered only every other year) and signed up for it. Only one class in the whole program that talks about sales. When I checked with my friends who went to other universities for their MBAs I was even more surprised to hear that this is the common case. Sales is not part of the MBA program!
The irony is that Sales (as I was reminded by my Sales Management professor during our very first class) is the only activity that contribute to the positive side of the income statement
.
I’ve learned a ton about running a business so far, but this class was the most transformative one in the MBA program for me. It does make sense to allocate this class later in the program after understanding key frameworks like DuPont analysis, Five Forces analysis, the time value of money, pricing, marketing positioning, among others, yet sales management can help to tie all these things together in a coherent manner with a very clear goal in mind.
Here are some of the key subjects from the Entrepreneurial Sales Strategy class:
- Business Models and Value Propositions
- Building a sales organization – hiring, compensation, organization, and management
- Direct, Indirect and Channel Sales Strategies
- Importance and development of strategic partners and alliances
- Understanding the Selling Process and Sales Cycles
- Implementing Pipeline Management Principles and Forecasting Techniques
- Repeatable Sales Models – what they are and why they are important
- Keys to successful selling including Solution (consultative) selling vs. product selling
- Sales Management, Positioning a sales force as a barrier to entry - differentiation and competitive advantage
- Major Account Selling, Team Selling, Global Sales Strategies
During the course we participated in two team sales activities:
- Sales Challenge – the objective of this activity was to engage in a complete sales process including building the value proposition and sales funnel, leads generation, leads qualification, cold calling, navigating the target organization, and closing. We had to convince a VP of Sales from a company with over 100MM annual revenue to participate in a panel with more VP of Sales from other industries at the university in one of the class evening.
- Sales Audit – each team was assigned a company(a real one), to execute a complete sales strategy and management auditing consulting project, and to come up with recommendations. We got the chance to meet with the CEO and VP of sales in the assigned company, to hear about the strategy and sales activities, and to gain access to real business data.
- The Sales Audit project was one of the highlight of my MBA program so far, I learned during this activity more than I could ever learn from case studies discussions in class. This company is a young SaaS company (Software as a Service), selling mainly through partners (MSP/VAR) and growing their booking more than 45% in 2012. We mapped their entire sales process, identified areas for improvements, and came up with two major recommendation plus other areas for further research. After delivering the presentation in class we also travel back to the company to report our findings.
The key outcomes from this projects were:
We made a difference – the company is actually revamping it sales process following some of the input from our recommendations.
We build great relationships with the CEO and VP of Sales
One of our team mate who graduated after this class was hired by this company
We earned a real consulting experience and learned how sales works in the real business world
We got an A
I know I did good choosing Boston University for my MBA program!!
In summary, the motivation for writing this post came as a result of a comment I heard during our second visit to the company that we audited, it came from both the CEO and the VP of Sales saying that this material was never taught in their MBA program(one of those was done at Stanford). I believe that Sales Strategy and Management are a core managerial skills, even if you end up working as a general manager, business or financial analyst, in operation, it is important to understand your value proposition to the organization and how your activities contribute to the sales activities. For the ones going for an MBA program with the aim working in Sales, Marketing, Strategy, or to start their own business, learning about sales is a must!!
The Ultimate Goal of Digital Branding
One letter….
Now that was a surprise!
VivaStream – how to know “who to know?”- during DMA2011 conference in Boston
I’m going to the DMA2011 conference in Boston next week, and this year the focus is on Real-Time marketing. What could be more relevant than that?
Learning about the different marketing methods that are leveraging mobile, social, and real-time data will be one goal of this event and networking is yet another (not a side effect).
VivaStream is a startup that is building a real-time mobile app and web-site that aims to take networking during business events like DMA11 to the next level.
Before the event starts: you setup your profile, select the conference, browse the schedule, and press the Attend button for the sessions that you plan to go to. Any of your actions is broadcasted to the VivaStream stream telling others about you. VivaStream also offers a reach lists of relevant topics and you can select from one of the two following options: I’m Interested or I Can Help. VivaStream uses this information among other factors to suggest people that you should connect with. There are more useful features and details, but this is the basic.
During the event: Since this is my first event using VivaStream, I’m yet to see the real-time capabilities in action. As you can see in the picture above, VivaStream plans to share some of the statistics based on the information gathered from users’ activities, and to let us know about interesting presentations and spontaneously organized after parties – IN REAL-TIME.
After the event ends: there is a strong possibility to see VivaStream building a new professional social network for networking with a purpose, based on interest and need, and fairly quick.
VivaStream is a very busy start-up, but here are few suggestions for additional features that I would like to see:
- Show me my agenda (calendar view) built based on presentations that I planed to attend to.
- Allow users to enter topics
- Create multiple streams based on different activities (it could get too noisy in a single feed stream)
- Allow users to shout-out (for example: book signing now next to room ###)
- Check-in to a session (and maybe check-out, or leave a comment)
- Number of people interested in a certain topic (next to the topic)
- Number of people attending a presentation (next to the presentation)
VivaStream has the potential to become an important component of any business event. It is fairly easy to see the value to the event organizers that can learn in real-time about activities within the conference rooms as well as outside, the presenting vendors looking for leads, and for the consumers that are looking for relevant help and experience.
Now, I’m looking forward to see how it all plays out in real-time. Go Viva!
Go Landgrab – Instagram first directory
Here we go again – the full adoption cycle – just a little quicker this time.
Instagram has now a new self registration directory – not ran by Instagram.
Go: Follogram
And here is mine: @kerendg
Update: 12/30/2010 Instagram asked the Followgram team “to remove the access to the users photos and refrain from using their API”. Now we need to wait till the Instagram team will officially release a public API before we could see more cool services like Followgram. I hope that we don’t have to wait long.
How to influence using Instagram
Instagram – if you haven’t heard this name before then you are in a similar situation as most people were 3 or 4 years ago when only few of us heard the name Twitter. Yet, Instagram marked the one million users milestone today! A fairly amazing accomplishment, showing a massive growth in record time, consider that the app debut date was October 6th this year.
This social network may not become the next Facebook killer, but it is definitely as viral as Twitter and may even threaten the later.
So what is Instagram? It is an iPhone app for sharing photos. The application consists of 5 tabs. Share, Popular, Feed, News and yours.
Share – you can choose either to take a new photo or to pick one from your photo library. The kick is that you can select from several built-in filters to process your photo giving it a little more color, ambient, anachronism touch, and more. You can also add short text to go along with the picture.
Popular – people can Like your picture (vote for it) or add comments. If enough people likes it your picture can appear in the popular tab. This is also a way to find people to follow and to vote on more pictures.
Feed – this is a feed stream of pictures from the people that you chose to follow.
Yours – your picture stream along with the likes and comments.
News – a trace of recent information about who liked or commented on your picture
Sounds simple? Well yes, very, exactly as simple as Twitter. If on Twitter people with interesting feed stream (links, celeb, insights – thought leader) attract lots of followers, Instagram users attract lost of followers in similar ways.
Means of communication on Instagram:
- Like and comments – Like is both a signal of appreciation to one of the the pictures and a call for attention to your newly posted picture.
- Screen shot – see here how to take a screenshot using your Iphone. People write a short message in Notes, the built-in iPhone app for writing text, take a screen-shot of the note, and post it as a picture.
- @instagram-user-name - you can reference other users using the @ symbol in the same way as you do on Twitter. Doing so will generate a small pop-up message on his/her phone and will add an entry to the News tab.
So how Instagram users lure new followers?
Method #1 – after few hours using the application you’ll notice that beautiful girls has a lot of followers. Some, significantly more than others. I will allow you to come up with your own explanation for this phenomenon.
Method #2 – artistic creativity. In Instagram I found many users with great picture streams. Some due to the places that they travel to, other due to great digital photography skills, and others thanks to the numerous iPhone photography applications that comes with photo enhancing techniques and creative filters. Some due to all of these elements.
Method #3 – teaching. There are few highly skilled photographers out there that are willing to share from their knowledge explaining about different techniques and tips to their avid followers.
Method #4 – challenges. People declares different challenges like the “Sexy Photo Challenge” (check @markpalmer)challenge that resulted with more than 500 pictures of men and women in different erotic poses (no porn). People then are encouraged to vote for their favorite picture and those are reposted on the challenge organizer stream. Can you see the business opportunity here? “Nike challenge – picture your most creative shot of your most worn-down Nike pare and win a …”.
Method #5 – increasing web presence – my friend Kathryn Jones (@unsaidtv) who is producing live streamed video plays on Better Left Unsaid TV is using Instagram to share pictures from the back scene or “the making of” the play.
Side note – one of the direct impact of Instagram is the growing demands for new photography iPhone applications. People are increasingly looking for more and more interesting filters and digital enhancement features to create new stunning images. I found myself buying more and more of those. Some of the users I follow on Instagram were willing to share (via screen-shot) about their most frequently used applications. Some has lots of them. I guess that this is very good for the mobile applications development market (and Apple).
Tip: There is a new web site (mashup – using Instagr.am unofficial API library) that provides statistics about individual users and their followers – very cool!
Summary – it is too early to tell what direction the Instagram team will choose to take the application at, but it is already apparent that there is a new and exiting platform that brings people to participate and communicate. It is also one of the few communities that exist outside the web and only in the mobile world (I know that implicitly there is a heavy use of the the web and data but there is no Instagram website – yet?!). Whenever there is a new communication platform (in this case Mobile social network) and avid participation, there is a room for influence, branding, and promotion. Bottom line, there is another marketing channel. However, above all, the Instagram team has provided us with a great new way to create, share, and interact with other people, i.e. to have fun!! If you decide to give it a try please stop by my Inst-stream @kerendg (same as my Twitter user name).
Apple’s future profitability heavily depends on mobile!
Will Apple be able to mitigate the impact of strong competition in the mobile market on future earnings?
The information is taken from Apples 2010 10k (numbers in Millions)
| Net Sales by Product: | 2008 | 2009 | 2010 |
| Desktops | $5,622 | $4,324 | $6,201 |
| Portables | $8,732 | $9,535 | $11,278 |
| iPod | $9,153 | $8,091 | $8,274 |
| Other music related products and services | $3,340 | $4,036 | $4,948 |
| iPhone and related products and services | $6,742 | $13,033 | $25,179 |
| Peripherals and other hardware | $1,694 | $1,475 | $1,814 |
| Software, service and other sales | $2,208 | $2,411 | $2,573 |
| iPad and related products and services | $0 | $0 | $4,958 |
From 0 to 5 Billions in one year – iPad success
iPhone sales almost doubled in each of the past two years (in 2007 when the iPhone was firstly introduce, sales were “only” 630 millions).
Apple also managed to significantly increase laptops sales(Portables), thanks to Apple’s success selling other products and building strong brand name. Yet, not at the same rate as iPhone revenue growth.
iPad sales is going down – it is now inside the iPhone?
Apple’s iPhone become a big source of revenue
Apple’s iPhone share of revenue is growing significantly relative to the other products
Apple is a multi-markets player: mobile, media, b2c hardware, b2b hardware, software and services.
Apple can always surprise us with a new blockbuster product changing another market.
Would you choose to develop for Microsoft platform these days?
The pros:
- Great tools and documentations
- Shorter learning curve
- Single vendor – not too many moving parts (helps to get things done quickly)
The cons:
- IE < 50%
- Laptop Sales Sapped by Tablet Frenzy- Tablet computers don’t come with Windows - they come with Google Android or Apple iOS.
- M&A activity – 0 by Microsoft this year- large non Microsoft platform friendly technology companies buys smaller ones. But there is hope – Adobe deal?
- Mobile:
- Lots of apps dev activities on Android and Apple phones
- Most Smartphones don’t come with Windows Mobile
Undetermined: The push to the Cloud – Microsoft is there among others.
- I’ve been working on both platforms: Microsoft and J2EE. At some point, it was easier to choose Microsoft over other platform stacks, yet the market as it looks now raises big concerns about the destiny of Windows, IE and .NET.
- Is it an end of an era? Your thoughts?
The web is like an onion – the layer effect!
The web is like an onion built from the inside out adding more and more layers in the ever race for web traffic and ad revenue.
- One buys a domain and somebody creates a short link
- One builds a website and somebody adds a dashboard
- One wants to be found and many creates search engines plus ads
- One starts a blog and somebody creates an ad network
- One builds a mobile app and somebody creates an app ad network
- One wants to be presence and connected and many build social networks
The fight over content has many fronts: java script tags, shot links databases, smart devices, apps, search engines, your “friends”. I’m sure that there are some other fronts that we are yet to see, maybe because we are still inside the onion.
Picture credit: Darwin Bell
Mobile marketing – mobile is not a single channel
This may sound trivial to the people who are very close to mobile marketing world, but it is not that obvious to others who are still trying to adjust to the rapid mobile market development.
First, mobile is not just your cell phone, and it is not just the new smart phones like iPhone or Droid. It is also eReaders like Nook and Kindle, tablet devices like the iPad and its mini version, the iPod Touch. Even Nintendo DS could connect to the web. And it is also your old and suddenly cumbersomely looking laptop. If it receives data and could be carried then it is another mobile channel.
Yet, even all these mobile devices does not sum to the entire multichannel marketing story. A brand can communicate its messages in more than one way using smart phones.
- SMS – short messages
- Mobile web site
- Mobile search
- Apps:
- With or without LBS (location based services)
- Apps that uses the camera for capturing and scanning objects
- Context specific apps like Drync
Why is it so important to be aware of all these interaction points? Read about the results of Microsoft’s experiment using multichannel mobile marketing here. Quoting Alison Engel, senior marketing director at Microsoft Advertising (from the same blog post)
The advertising effectiveness results demonstrated that advertiser value increases incrementally with the addition of digital media channels.
Some examples for running mobile campaigns using different communication channels:
- Bottom up – start-ups like Foursquare and Gowalla that started as mobile apps – Foursquare encourages people to visit different locations many times. FS uses game like campaigns to drive traffic, loyalty, and revenue for customers like Starbucks.
- Top down
- Companies like Yelp and Facebook that adds mobile app to their web site – Social networks where people share about what they like or not. Knowing where they are in addition to what they like would help to build even more powerful campaigns.
- The big brands that are using mobile apps to run location based campaigns like: Pepsi, Rolls-Royce, and others.
- Companies such as McDonald that uses LBS services like Navteq to run mobile location based campaigns and seeing higher CTR.
- News and content web-site like NYT, and The Weather Channel.
- Finding the right balance of resources and budget allocation per channel
- Executing different communication strategies via each channel
- Measuring the effectiveness for a multichannel play
I’m sure that all these new mobile channels in addition to the already growing number of web channels, like Facebook pages and Twitter accounts are raising some tough questions in the Marketing department:
- Your thoughts,
Pictures credit: Keith Williamson
Keren Dagan
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