SaleSoft, Inc.

Marketing Management
-Group 5

Agenda
SaleSofts Dilemma
Case study Overview
Benefits of PROCEED
Benefits of Trojan Horse
Pricing
Recommendations

SaleSofts Dilemma

SaleSoft is currently marketing PROCEED a

Comprehensive Sales Automation software

The Trojan Horse Opportunity

SaleSofts 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
Marketing
functions
Telemarketing,
direct mail

Sales
functions

Customer
Service
functions

Account management, Complaint tracking,

Salesforce
re-purchase details
management

Market
$1 Billion; growing 40% annually

B2B Consumer Preference

Buy turn-key solutions from one vendor

Types of SA Solutions

CMS
Low-end solution, e.g. ACT by Symantec
Used by salespeople differently

CSAS
High-end solution, e.g. PROCEED
Integrated, collaborative solution for the entire
organization
Multi-level, cross-functional, team-selling approach

In June 1994, no integrated CSAS products

available

CSAS
Buying Cycle

Realization

Evaluate potential
to automate

Different functions
- related

CSAS Vendors
Type of SA
software &
hardware

Pilot test the

customized CSAS

Partnershi
p
Feedback- Modify

SA
Consultants

PROCEED SMRP
Allowed customers to automate their entire marketing, sales and
customer service operations
Ready- Three modules
Estimated- $1 Billion to roll out other 5 modules in 8 months

Sales System
Field Sales
Opportunity
Management
Sales
management

Marketing
System
Campaign
Management
Marketing
Encyclopedia
Literature
Fulfillment

Service
Systems
Incident tracking
Relationship
Management

SaleSoft - financials
Founded in 1993, to develop and market CSAS systems

Needs to
finance
another $2
million
1996

Additional
investment
of $2 million
by venture
capital
1995

1993

Equity
investment
of $800,000
by Miller,
Tanner
(CFO) and
others

The Trojan Horse

Need for a Selling Management Software

Sales Forecast
Review sales closure dates
Manage gaps in performance
Analyze sales activity
Review competitive behavior

Why ?
Get new broad-based customers
Gain quick sales
Generate needed revenue

Benefits of PROCEEDCSAS

Saving due to reduced cycle time

Company

Old
cycle
time

New
cycle
time

Sales

New sale

A (Fin Services) 120

days

114 days

$120 M

$126.32 M

B (Comp H/w)

165 days

$350 M

$381.82 M

180
days

Benefits of PROCEEDCSAS

Saving on retaining sales people

Company

Employe No of
e
productiv
retainin e days
g

Sales
per
employe
e per
day

Savings

A (Fin Services)

2.4

60

.003M

.432M

B (Comp H/w)

13.125

90

.0065 M

7.677M

Benefits of PROCEEDCSAS

Saving due to reduced training time

Company

New
No of
Sales per
retainin productive employee
g
days
per day

Savings

A (Fin
Services)

21.6

14

.003M

.9072 M

B (Comp H/w)

104.125

20

.0065 M

13.53625 M

Expenses
A(Fin Services)

B (Comp H/w)

Proceed License fee

$ 600,000

$1,440,000

Implementation &
Training

$180,000

$ 430,000

Support and
maintenance

$ 36,000

$86,000

Hardware

$1,500,000

$3,600,000

$ 2.316 M

$ 6.33 M

A (Fin Services)

B (Comp H/w)

Reduced cycle time

$ 6.32 M

$ 31.82

Retained people

$ 0. 432 M

$ 7.677M

Reduced cycle time

$ 0.9072 M

$ 13.53625 M

$ 7.6592 M

$ 53.03325 M

Customers perceived value of

TH

PROCEED and TH are targeted to different

markets

TH lies between CMS and CSAS

THs 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

Time taken to sell the TH is one-third

TH needs minimal customization

Marketing cost per TH user is one-third

4 Ps

PROCEE
D

TH

Product

CSAS used for sales,

marketing & customer
services

Focused only on sales

Pricing

$2400

Range from $400 $1000

Placement

High end users

Mid-level

Promotion

Through SA Consultants

December conferencelaunch

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
Product Line Pricing
Psychological Pricing
Optional Pricing
Captive Pricing
Product Bundle
Pricing
Promotional Pricing
Geographical Pricing

Price/Quality Relationship
High Price

Skimming

Premium

Low Quality

High Quality

Economy

Penetratio
n

Low Price

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
Product Line Pricing
Psychological Pricing
Optional Pricing
Captive Pricing
Product Bundle
Pricing
Promotional Pricing
Geographical Pricing

Pricing Strategy

Markup Pricing
Cost per user
$1,000,000 / 4000 users = $250 per user

Markup percentage

Price

20%

$ 315

30%

$ 360

40%

$ 420

50%

$ 500

Pricing Strategy

Target-Return Pricing
Unit Cost = $250 per user
Investment Capital = $1.8 million

Desired Return

Price

20%

$ 340

30%

$ 385

40%

$ 430

50%

$ 475

Pricing Strategy

Perceived Value Pricing

Base Price = $400 per user

Premium on
Sales Forecasting

$ 30

Reduced Selling Cycle

$ 50

Lead Generation

$ 40

Total Price

$ 520

Pricing Strategy

Premium Pricing
$1,000 and above

Penetration Pricing
Between $250 and $400 initially, gradually raised

Price Skimming
Initially $1000, reduced to $400 gradually

Timeline- only PROCEED

Timeline- PROCEED + TH

Final Recommendations

To go all out with Trojan Horse

Development Team free to work on PROCEED
after 3 months
Sales Team may need to expand

Pricing
Perceived Value Pricing - around $520