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1 HMC Business Fundamentals You will find that the State is the kind of organization which, though...
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1 HMC Business Fundamentals You will find that the State is the kind of organization which, though it does big things badly, does small things badly too. John Kenneth Galbraith
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Transcript of 1 HMC Business Fundamentals You will find that the State is the kind of organization which, though...
1
HMCBusiness Fundamentals
You will find that the State is the kind of organization which, though it does big things badly, does small things badly too. John Kenneth Galbraith
The Long Tail of SaaS – Cost of Sale
• Dozens of markets of millions or millions of markets of dozens?
$ / Customer$ / Customer
# of Customers# of Customers
Your Typical CustomersYour Typical Customers
(Currently) “non addressable” (Currently) “non addressable” CustomersCustomers
What if you lower your cost of sale (i.e. What if you lower your cost of sale (i.e. lower barrier to entry) and you also lower lower barrier to entry) and you also lower cost of operationscost of operations
New addressable market >> current New addressable market >> current marketmarket
Your Large CustomersYour Large Customers
KSF 1: Competitive Differentiation
The Long Tail of SaaS – Functionality
• Dozens of markets of millions or millions of markets of dozens?
$ / Customer$ / Customer
# of Customers# of Customers
Broad applications targeted Broad applications targeted to specific functionality such to specific functionality such as SFA, Human Resources, as SFA, Human Resources, etc.etc.
Applications targeted to specific markets.Partnering across segments
Mainstream business Mainstream business applications, i.e. Hosted applications, i.e. Hosted Exchange, ERP, etc.Exchange, ERP, etc.
KSF 1: Competitive Differentiation
8 Key Success Factors
• Mural Ventures’ 8 Key Success Factors for the Sales & Marketing of Software-as-a-Service have been developed as a result of more than 200 engagements with Service Providers (of all kinds) and Independent Software Vendors
• Mural Developed the Key Success Factors by analyzing what was working and not working at these companies
© Mural Ventures Corp 2006, All Rights Reserved
© 2007 Mural Ventures Corporation
• Our methodology for assessing Provider maturity with respect to 8 key Go-To-Market Success Factors that are required in selling & marketing Software-as-a-Service offerings:
– Competitive Differentiation– Messaging & Positioning– Packaging & Pricing– Web-Driven Business Model– Demand Generation– Online Customer Experience– Direct/Indirect Sales Processes– Organizational Effectiveness
Ineffective
Inhibited
Predictable
Competitive
Optimized
1
2
3
4
5
Assessing Go-To-Market Maturity
© 2007 Mural Ventures Corporation
Each Maturity Level has a Focus
Solution Focused with Continuous Improvement
Target Market (or segment) Focused
Customer (Needs & Benefit) Focused & Service Driven
Benefit Focused
Product-Dependent Focus and Ad-Hoc Behavior1
2
3
4
5
© 2007 Mural Ventures Corporation
Mural ISV Market Readiness Assessment
Competitive Differentiation
Messaging & Positioning
Packaging & Pricing
Web-DrivenBusiness Model
DemandGeneration
Online CustomerExperience
Direct/IndirectSales Processes
Organizational Effectiveness
1 2 3 4 5
OPTIMIZED
COMPETITIVE
PREDICTABLE
INHIBITED
INEFFECTIVE
Maturity Level
Market R
eadin
essUncontested Market Space
Market Segment Need Based
Micro-Market Focused PricingBased on Value
Customer Centric and Market Specific
Integrated Online Offline Messaging
Relevant Cross-Sell Up-SellIntuitive Administration
Focused & Integration Direct/Indirect/Online Sales
Aligned Organization, ContinuousImprovement
Compete on Price
Product and Feature Centric
Complex with High Barriers to Sale
Confusing Internally Focused
Touch Points are Inconsistentfor Offering
Difficult to Buy and Administer
Ad Hoc Direct Sales Only
Ad Hoc Decisions/Department Behavior
© 2007 Mural Ventures Corporation
Go-To-Market Strategy & Execution
TA
RG
ET
MA
RK
ET
AN
AL
YS
IS
OF
FE
RIN
G D
EF
INIT
IOIN
&
FIN
AN
CIA
L M
OD
EL
ING
Organizational Effectiveness
Competitive Differentiation
Messaging & Positioning
Packaging & Pricing
Web Driven Business Model
Demand Generation
Online Customer
Experience
Direct/Indirect Sales
SaaS Business Readiness Approach
Key Success Factors
© 2007 Mural Ventures Corporation
Key Success Factors for Selling SaaS
Customers are unable to find offering, presentation is confusing, no online self-subscription is available.
Typically characterized by uncompetitive pricing, minimum contract terms, minimum # of users, confusing pricing, too many tiers of service, multiple tiers instead of "add-on" options.
Positioning is completely product and feature centric. Positioning is effective only for customers who already know what they need and are already familiar with the specific application domain.
Provider is offering the exact same service offering as other providers (perhaps based on third-party technologies) with no opportunity for true differentiation, resulting in a Red Ocean in which the only remaining competetivedifferentiator is price.
Customers can search, find, and buy. Provider is actively working to ensure that all of the information required to make a successful buying decision is on the site and correctly presented, eliminating any final inhibitors to selling.
Competitive pricing and correct packaging, but actively working to eliminate other inhibitors (e.g. contract minimums).
Still product and feature centric positioning with progress towards customer-centric benefits positioning. Typically a lack of consistent application of messaging across all channels and collateral.
Provider's offering is functionally equivalent to that of other providers, resulting in a "my feature X beats your feature X" competitive differentiation tactic, but ultimately resulting in a price-competitive sale.
Best-practice site that allows customers to 1) Search; 2) Find; 3) Self Qualify; 4) Try (Free Trial where possible); 5) Make the buying decision; 6) Buy; 7) Activate. Web-site is the focal point of the business.
Small number (2-3) of different customer/user "plans" that align correctly with end-user or customer personas. Value differentiation between different price plans is clear and significant.
Customer centric positioning with Benefits (e.g. Anytime, Anywhere access), then supporting benefits points, then features as appropriate. Consistent application of messaging throughout ALL collateral.
Provider has differentiated from the competition by bundling additional services or capabilities not offered by the competition.
Differentiated sub-sites and/or landing pages aligned with best-practice positioning of value proposition according to messaging & positioning framework
Some type of unique differentiation of packaging or pricing that sets the provider apart of the reset of the pack.
Best Practice positioning based on a well-defined messaging & position framework (see template). Customer centric positioning that blends customer-benefit as the solution for the customer pain point/problem.
Provider has differentiated with a vertical market focus with vertical (or micro-market) specific add-on capabilities/features.
Micro-market sales sites for specific vertical markets (e.g. real-estate). Fully integrated PPC/SEO and pro-active analysis of web-analytics
Micro-market specific packaging/bundling of service with vertically focused add-ons. Market research used to understand customer price-point sensitivities.
Vertical (e.g. Real Estate), Horizontal specialization (e.g. Finance), or other micro-market specific positioning. User focus groups or surveys are pro-actively used to incorporate customer feedback into product life-cycle.
Provider has created true Blue Ocean (aka uncontested market space) by differentiating along a unique axis that reaches beyond current market boundaries and existing demand
Web-Driven
Business
Packaging &
Pricing
Messaging &
Positioning
Competitive Differentiation
Customers are unable to find offering, presentation is confusing, no online self-subscription is available.
Typically characterized by uncompetitive pricing, minimum contract terms, minimum # of users, confusing pricing, too many tiers of service, multiple tiers instead of "add-on" options.
Positioning is completely product and feature centric. Positioning is effective only for customers who already know what they need and are already familiar with the specific application domain.
Provider is offering the exact same service offering as other providers (perhaps based on third-party technologies) with no opportunity for true differentiation, resulting in a Red Ocean in which the only remaining competetivedifferentiator is price.
Customers can search, find, and buy. Provider is actively working to ensure that all of the information required to make a successful buying decision is on the site and correctly presented, eliminating any final inhibitors to selling.
Competitive pricing and correct packaging, but actively working to eliminate other inhibitors (e.g. contract minimums).
Still product and feature centric positioning with progress towards customer-centric benefits positioning. Typically a lack of consistent application of messaging across all channels and collateral.
Provider's offering is functionally equivalent to that of other providers, resulting in a "my feature X beats your feature X" competitive differentiation tactic, but ultimately resulting in a price-competitive sale.
Best-practice site that allows customers to 1) Search; 2) Find; 3) Self Qualify; 4) Try (Free Trial where possible); 5) Make the buying decision; 6) Buy; 7) Activate. Web-site is the focal point of the business.
Small number (2-3) of different customer/user "plans" that align correctly with end-user or customer personas. Value differentiation between different price plans is clear and significant.
Customer centric positioning with Benefits (e.g. Anytime, Anywhere access), then supporting benefits points, then features as appropriate. Consistent application of messaging throughout ALL collateral.
Provider has differentiated from the competition by bundling additional services or capabilities not offered by the competition.
Differentiated sub-sites and/or landing pages aligned with best-practice positioning of value proposition according to messaging & positioning framework
Some type of unique differentiation of packaging or pricing that sets the provider apart of the reset of the pack.
Best Practice positioning based on a well-defined messaging & position framework (see template). Customer centric positioning that blends customer-benefit as the solution for the customer pain point/problem.
Provider has differentiated with a vertical market focus with vertical (or micro-market) specific add-on capabilities/features.
Micro-market sales sites for specific vertical markets (e.g. real-estate). Fully integrated PPC/SEO and pro-active analysis of web-analytics
Micro-market specific packaging/bundling of service with vertically focused add-ons. Market research used to understand customer price-point sensitivities.
Vertical (e.g. Real Estate), Horizontal specialization (e.g. Finance), or other micro-market specific positioning. User focus groups or surveys are pro-actively used to incorporate customer feedback into product life-cycle.
Provider has created true Blue Ocean (aka uncontested market space) by differentiating along a unique axis that reaches beyond current market boundaries and existing demand
Web-Driven
Business
Packaging &
Pricing
Messaging &
Positioning
Competitive DifferentiationLevel
5Optimized
4Competitive
3Predictable
2Inhibited
1Ineffective
© Mural Ventures Corp 2006, All Rights Reserved
Key Success Factors for Selling SaaS
Ad-hoc organizational and departmental behaviors with a lack of internal alignment towards achieving a common vision or business objectives.
Direct sales only. No pro-active lead qualification. No customer segmentation by size or industry. Characterized by tendancy to focus too far up-market. Long sales cycles. Lack of "solution specialist" capability results in inability to overcome common objections.
No self-signup capability, direct sales interaction required. No offering self-administration.
No PPC/SEO campaigns. Other demand generation activities (e.g. Print ads, direct mail, etc) do not leverage the web-site.
Good executive leadership in place and committed to drive change and improve business performance by driving improvements in accordance with the "key success factors".
Direct Sales, indirect channels, telesales, but with ineffective processes for lead qualification and routing of leads to "best qualified" channel. Provider is actively working to train sales and revise processes to improve effectiveness.
Self-guided signup, support, and/or self-administration but inhibited in some way -- e.g. overly complex registration process, complex activation. Active progress is being made to eliminate remaining inhibitors.
PPC/SEO and other demand generation capabilities are leveraged, but with some inhibiting factors that limit their effectiveness (e.g. mismatch between PPC terms and landing page positioning).
Organizational alignment around business objectives and customer needs. Repeatedly follow a short and defined life-cycle for the successful introduction of new or revised product offerings.
Pro-active management of direct sales, inside sales, and channel partners. Focus on customer segmentation and lead qualification. Pro-active training.
Self-guided sales experience, self-admin capabilities, no barriers to sale via web, or phone. Easy signup and activation.
Makes use of pro-active PPC/SEO campaigns. All demand generation activities lead to one place -- the web-site.
Strong executive sponsorship for improving existing offerings and adding new value-added service offerings. Proven organizational agility and rapid time-to-market in response to competitive threats.
Integrated lead/opportunity flow for channel partners. Mature process for lead qualification and routing of leads. Customer segmentation and qualification "drives" the opportunity management.
Integrated online knowledge-base and live-chat for both sales support and post-sales support. Pro-active email communication during first 30-60 days provides training, tips, tricks, etc.
Demand generation campaigns drive to a specific sub-site or landing page. All campaign activities are well coordinated and integrated. Iterative PPC/SEO campaign management.
Organization is designed and internally aligned for change. Specific processes for continuous improvement. Healthy balance of management (stability) and leadership (fostering change).
Vertical or micro-market focused channel partners with lead flow integrated into micro-marketing campaigns. Channel partner branded sales sites. Integration of channel partner into knowledge base, live chat, etc.
Integrated up-sell and cross-sell activities into customer "control panel". Pro-active and ongoing customer feedback management (surveys of customer panels by segment to assess customer experience, satisfaction, needs)
Micro-market specific demand generation campaigns with integration across all forms of demand generation (e.g. PPC, Banner Ads, email, direct mail, print)
Organizational Effectiveness
Direct/Indirect Sales Process
Online Customer ExperienceDemand Generation
Ad-hoc organizational and departmental behaviors with a lack of internal alignment towards achieving a common vision or business objectives.
Direct sales only. No pro-active lead qualification. No customer segmentation by size or industry. Characterized by tendancy to focus too far up-market. Long sales cycles. Lack of "solution specialist" capability results in inability to overcome common objections.
No self-signup capability, direct sales interaction required. No offering self-administration.
No PPC/SEO campaigns. Other demand generation activities (e.g. Print ads, direct mail, etc) do not leverage the web-site.
Good executive leadership in place and committed to drive change and improve business performance by driving improvements in accordance with the "key success factors".
Direct Sales, indirect channels, telesales, but with ineffective processes for lead qualification and routing of leads to "best qualified" channel. Provider is actively working to train sales and revise processes to improve effectiveness.
Self-guided signup, support, and/or self-administration but inhibited in some way -- e.g. overly complex registration process, complex activation. Active progress is being made to eliminate remaining inhibitors.
PPC/SEO and other demand generation capabilities are leveraged, but with some inhibiting factors that limit their effectiveness (e.g. mismatch between PPC terms and landing page positioning).
Organizational alignment around business objectives and customer needs. Repeatedly follow a short and defined life-cycle for the successful introduction of new or revised product offerings.
Pro-active management of direct sales, inside sales, and channel partners. Focus on customer segmentation and lead qualification. Pro-active training.
Self-guided sales experience, self-admin capabilities, no barriers to sale via web, or phone. Easy signup and activation.
Makes use of pro-active PPC/SEO campaigns. All demand generation activities lead to one place -- the web-site.
Strong executive sponsorship for improving existing offerings and adding new value-added service offerings. Proven organizational agility and rapid time-to-market in response to competitive threats.
Integrated lead/opportunity flow for channel partners. Mature process for lead qualification and routing of leads. Customer segmentation and qualification "drives" the opportunity management.
Integrated online knowledge-base and live-chat for both sales support and post-sales support. Pro-active email communication during first 30-60 days provides training, tips, tricks, etc.
Demand generation campaigns drive to a specific sub-site or landing page. All campaign activities are well coordinated and integrated. Iterative PPC/SEO campaign management.
Organization is designed and internally aligned for change. Specific processes for continuous improvement. Healthy balance of management (stability) and leadership (fostering change).
Vertical or micro-market focused channel partners with lead flow integrated into micro-marketing campaigns. Channel partner branded sales sites. Integration of channel partner into knowledge base, live chat, etc.
Integrated up-sell and cross-sell activities into customer "control panel". Pro-active and ongoing customer feedback management (surveys of customer panels by segment to assess customer experience, satisfaction, needs)
Micro-market specific demand generation campaigns with integration across all forms of demand generation (e.g. PPC, Banner Ads, email, direct mail, print)
Organizational Effectiveness
Direct/Indirect Sales Process
Online Customer ExperienceDemand GenerationLevel
5Optimized
4Competitive
3Predictable
2Inhibited
1Ineffective
© Mural Ventures Corp 2006, All Rights Reserved
Positioning – Initial Concept
• Who is the president of Russia?– Vice President?
• What is the number one selling book of all time?– Second?
• Who was the first person to fly across the Atlantic solo?– Who was the second?
11
Positioning – Brand and Product Focus
• You have to own something in your customer’s mind
• You can normally own only one thing
12
Who Owns These Positions?
• Safety – Auto Industry– Volvo
• Overnight – Freight– Federal Express
• Uncola– 7UP
• Direct – Computer Industry– Dell
• SaaS Go-to-Market– Mural Ventures
13
Brand According to Trout
“A single idea or concept you own in the mind of the prospect.”
14
Positioning – Nested Activities
• Select “Positioning”• Identify and build Nested Activities
– Virgin Airlines (Emirates)– Four Seasons
• What are your differentiated Nested Activities?
16
Leading ‘Hosting Brands’ – January 2001
• Exodus - Ellen from IBM was formidable - $28 Billion!• DellHost - SME offering with Interliant and Segetel • Sprint - $500 MILLION • Intel Online Services - $600 MILLION • Gateway O.N. - Targeted small customers with Verio • HostPro – Micron - SME markets• HPWebHost - HP started International rollout of
eService Centers
17 Source: Morris Miller
In 2002, who did Microsoft pick as the Leaders in the Hosting Market?
18
Microsoft Gold Certified Partners – 2002
• Digex• Divine• Genuity• Intel Online Services• Loudcloud
– First To Meet Microsoft Gold Certified Standards for Their Ability To Successfully Host and Outsource on the Microsoft Platform
– REDMOND, Wash., April 8, 2002
19 Source: Morris Miller
What’s Different Now?
• The market is bigger and more developed– Recognition of SaaS across market segments
• Companies for which hosting wasn’t their major business (e.g. those that didn’t specialize) have been forced out of the market
• Companies that purchase hosting are now used to outsourcing
• More sophisticated partner opportunities• There are lots of tools to help build new offerings
20
Bottom Line
Now is a great time to be in the
hosting business
21
IF you add value
Assessing Service Provider Maturity• We use a methodology for assessing Service
provider maturity with respect to 8 key Go-To-Market Success Factors that are required in selling & marketing SaaS offerings:
– Competitive Differentiation
– Messaging & Positioning
– Packaging & Pricing
– Web-Driven Business Model
– Demand Generation
– Online Customer Experience
– Direct/Indirect Sales Processes
– Organizational Effectiveness
Ineffective
Inhibited
Predictable
Competitive
Optimized
1
2
3
4
5
Key Success Factors for Selling SaaS
Customers are unable to find offering, presentation is confusing, no online self-subscription is available.
Typically characterized by uncompetitive pricing, minimum contract terms, minimum # of users, confusing pricing, too many tiers of service, multiple tiers instead of "add-on" options.
Positioning is completely product and feature centric. Positioning is effective only for customers who already know what they need and are already familiar with the specific application domain.
Provider is offering the exact same service offering as other providers (perhaps based on third-party technologies) with no opportunity for true differentiation, resulting in a Red Ocean in which the only remaining competetivedifferentiator is price.
Customers can search, find, and buy. Provider is actively working to ensure that all of the information required to make a successful buying decision is on the site and correctly presented, eliminating any final inhibitors to selling.
Competitive pricing and correct packaging, but actively working to eliminate other inhibitors (e.g. contract minimums).
Still product and feature centric positioning with progress towards customer-centric benefits positioning. Typically a lack of consistent application of messaging across all channels and collateral.
Provider's offering is functionally equivalent to that of other providers, resulting in a "my feature X beats your feature X" competitive differentiation tactic, but ultimately resulting in a price-competitive sale.
Best-practice site that allows customers to 1) Search; 2) Find; 3) Self Qualify; 4) Try (Free Trial where possible); 5) Make the buying decision; 6) Buy; 7) Activate. Web-site is the focal point of the business.
Small number (2-3) of different customer/user "plans" that align correctly with end-user or customer personas. Value differentiation between different price plans is clear and significant.
Customer centric positioning with Benefits (e.g. Anytime, Anywhere access), then supporting benefits points, then features as appropriate. Consistent application of messaging throughout ALL collateral.
Provider has differentiated from the competition by bundling additional services or capabilities not offered by the competition.
Differentiated sub-sites and/or landing pages aligned with best-practice positioning of value proposition according to messaging & positioning framework
Some type of unique differentiation of packaging or pricing that sets the provider apart of the reset of the pack.
Best Practice positioning based on a well-defined messaging & position framework (see template). Customer centric positioning that blends customer-benefit as the solution for the customer pain point/problem.
Provider has differentiated with a vertical market focus with vertical (or micro-market) specific add-on capabilities/features.
Micro-market sales sites for specific vertical markets (e.g. real-estate). Fully integrated PPC/SEO and pro-active analysis of web-analytics
Micro-market specific packaging/bundling of service with vertically focused add-ons. Market research used to understand customer price-point sensitivities.
Vertical (e.g. Real Estate), Horizontal specialization (e.g. Finance), or other micro-market specific positioning. User focus groups or surveys are pro-actively used to incorporate customer feedback into product life-cycle.
Provider has created true Blue Ocean (aka uncontested market space) by differentiating along a unique axis that reaches beyond current market boundaries and existing demand
Web-Driven
Business
Packaging &
Pricing
Messaging &
Positioning
Competitive Differentiation
Customers are unable to find offering, presentation is confusing, no online self-subscription is available.
Typically characterized by uncompetitive pricing, minimum contract terms, minimum # of users, confusing pricing, too many tiers of service, multiple tiers instead of "add-on" options.
Positioning is completely product and feature centric. Positioning is effective only for customers who already know what they need and are already familiar with the specific application domain.
Provider is offering the exact same service offering as other providers (perhaps based on third-party technologies) with no opportunity for true differentiation, resulting in a Red Ocean in which the only remaining competetivedifferentiator is price.
Customers can search, find, and buy. Provider is actively working to ensure that all of the information required to make a successful buying decision is on the site and correctly presented, eliminating any final inhibitors to selling.
Competitive pricing and correct packaging, but actively working to eliminate other inhibitors (e.g. contract minimums).
Still product and feature centric positioning with progress towards customer-centric benefits positioning. Typically a lack of consistent application of messaging across all channels and collateral.
Provider's offering is functionally equivalent to that of other providers, resulting in a "my feature X beats your feature X" competitive differentiation tactic, but ultimately resulting in a price-competitive sale.
Best-practice site that allows customers to 1) Search; 2) Find; 3) Self Qualify; 4) Try (Free Trial where possible); 5) Make the buying decision; 6) Buy; 7) Activate. Web-site is the focal point of the business.
Small number (2-3) of different customer/user "plans" that align correctly with end-user or customer personas. Value differentiation between different price plans is clear and significant.
Customer centric positioning with Benefits (e.g. Anytime, Anywhere access), then supporting benefits points, then features as appropriate. Consistent application of messaging throughout ALL collateral.
Provider has differentiated from the competition by bundling additional services or capabilities not offered by the competition.
Differentiated sub-sites and/or landing pages aligned with best-practice positioning of value proposition according to messaging & positioning framework
Some type of unique differentiation of packaging or pricing that sets the provider apart of the reset of the pack.
Best Practice positioning based on a well-defined messaging & position framework (see template). Customer centric positioning that blends customer-benefit as the solution for the customer pain point/problem.
Provider has differentiated with a vertical market focus with vertical (or micro-market) specific add-on capabilities/features.
Micro-market sales sites for specific vertical markets (e.g. real-estate). Fully integrated PPC/SEO and pro-active analysis of web-analytics
Micro-market specific packaging/bundling of service with vertically focused add-ons. Market research used to understand customer price-point sensitivities.
Vertical (e.g. Real Estate), Horizontal specialization (e.g. Finance), or other micro-market specific positioning. User focus groups or surveys are pro-actively used to incorporate customer feedback into product life-cycle.
Provider has created true Blue Ocean (aka uncontested market space) by differentiating along a unique axis that reaches beyond current market boundaries and existing demand
Web-Driven
Business
Packaging &
Pricing
Messaging &
Positioning
Competitive DifferentiationLevel
5Optimized
4Competitive
3Predictable
2Inhibited
1Ineffective
Key Success Factors for Selling SaaS
Ad-hoc organizational and departmental behaviors with a lack of internal alignment towards achieving a common vision or business objectives.
Direct sales only. No pro-active lead qualification. No customer segmentation by size or industry. Characterized by tendancy to focus too far up-market. Long sales cycles. Lack of "solution specialist" capability results in inability to overcome common objections.
No self-signup capability, direct sales interaction required. No offering self-administration.
No PPC/SEO campaigns. Other demand generation activities (e.g. Print ads, direct mail, etc) do not leverage the web-site.
Good executive leadership in place and committed to drive change and improve business performance by driving improvements in accordance with the "key success factors".
Direct Sales, indirect channels, telesales, but with ineffective processes for lead qualification and routing of leads to "best qualified" channel. Provider is actively working to train sales and revise processes to improve effectiveness.
Self-guided signup, support, and/or self-administration but inhibited in some way -- e.g. overly complex registration process, complex activation. Active progress is being made to eliminate remaining inhibitors.
PPC/SEO and other demand generation capabilities are leveraged, but with some inhibiting factors that limit their effectiveness (e.g. mismatch between PPC terms and landing page positioning).
Organizational alignment around business objectives and customer needs. Repeatedly follow a short and defined life-cycle for the successful introduction of new or revised product offerings.
Pro-active management of direct sales, inside sales, and channel partners. Focus on customer segmentation and lead qualification. Pro-active training.
Self-guided sales experience, self-admin capabilities, no barriers to sale via web, or phone. Easy signup and activation.
Makes use of pro-active PPC/SEO campaigns. All demand generation activities lead to one place -- the web-site.
Strong executive sponsorship for improving existing offerings and adding new value-added service offerings. Proven organizational agility and rapid time-to-market in response to competitive threats.
Integrated lead/opportunity flow for channel partners. Mature process for lead qualification and routing of leads. Customer segmentation and qualification "drives" the opportunity management.
Integrated online knowledge-base and live-chat for both sales support and post-sales support. Pro-active email communication during first 30-60 days provides training, tips, tricks, etc.
Demand generation campaigns drive to a specific sub-site or landing page. All campaign activities are well coordinated and integrated. Iterative PPC/SEO campaign management.
Organization is designed and internally aligned for change. Specific processes for continuous improvement. Healthy balance of management (stability) and leadership (fostering change).
Vertical or micro-market focused channel partners with lead flow integrated into micro-marketing campaigns. Channel partner branded sales sites. Integration of channel partner into knowledge base, live chat, etc.
Integrated up-sell and cross-sell activities into customer "control panel". Pro-active and ongoing customer feedback management (surveys of customer panels by segment to assess customer experience, satisfaction, needs)
Micro-market specific demand generation campaigns with integration across all forms of demand generation (e.g. PPC, Banner Ads, email, direct mail, print)
Organizational Effectiveness
Direct/Indirect Sales Process
Online Customer ExperienceDemand Generation
Ad-hoc organizational and departmental behaviors with a lack of internal alignment towards achieving a common vision or business objectives.
Direct sales only. No pro-active lead qualification. No customer segmentation by size or industry. Characterized by tendancy to focus too far up-market. Long sales cycles. Lack of "solution specialist" capability results in inability to overcome common objections.
No self-signup capability, direct sales interaction required. No offering self-administration.
No PPC/SEO campaigns. Other demand generation activities (e.g. Print ads, direct mail, etc) do not leverage the web-site.
Good executive leadership in place and committed to drive change and improve business performance by driving improvements in accordance with the "key success factors".
Direct Sales, indirect channels, telesales, but with ineffective processes for lead qualification and routing of leads to "best qualified" channel. Provider is actively working to train sales and revise processes to improve effectiveness.
Self-guided signup, support, and/or self-administration but inhibited in some way -- e.g. overly complex registration process, complex activation. Active progress is being made to eliminate remaining inhibitors.
PPC/SEO and other demand generation capabilities are leveraged, but with some inhibiting factors that limit their effectiveness (e.g. mismatch between PPC terms and landing page positioning).
Organizational alignment around business objectives and customer needs. Repeatedly follow a short and defined life-cycle for the successful introduction of new or revised product offerings.
Pro-active management of direct sales, inside sales, and channel partners. Focus on customer segmentation and lead qualification. Pro-active training.
Self-guided sales experience, self-admin capabilities, no barriers to sale via web, or phone. Easy signup and activation.
Makes use of pro-active PPC/SEO campaigns. All demand generation activities lead to one place -- the web-site.
Strong executive sponsorship for improving existing offerings and adding new value-added service offerings. Proven organizational agility and rapid time-to-market in response to competitive threats.
Integrated lead/opportunity flow for channel partners. Mature process for lead qualification and routing of leads. Customer segmentation and qualification "drives" the opportunity management.
Integrated online knowledge-base and live-chat for both sales support and post-sales support. Pro-active email communication during first 30-60 days provides training, tips, tricks, etc.
Demand generation campaigns drive to a specific sub-site or landing page. All campaign activities are well coordinated and integrated. Iterative PPC/SEO campaign management.
Organization is designed and internally aligned for change. Specific processes for continuous improvement. Healthy balance of management (stability) and leadership (fostering change).
Vertical or micro-market focused channel partners with lead flow integrated into micro-marketing campaigns. Channel partner branded sales sites. Integration of channel partner into knowledge base, live chat, etc.
Integrated up-sell and cross-sell activities into customer "control panel". Pro-active and ongoing customer feedback management (surveys of customer panels by segment to assess customer experience, satisfaction, needs)
Micro-market specific demand generation campaigns with integration across all forms of demand generation (e.g. PPC, Banner Ads, email, direct mail, print)
Organizational Effectiveness
Direct/Indirect Sales Process
Online Customer ExperienceDemand GenerationLevel
5Optimized
4Competitive
3Predictable
2Inhibited
1Ineffective
Organizational Effectiveness
How optimized is our organization to identify, assess, enable, launch, market and profitably
sell on-demand applications and services?
Which Parts of the Organization are Affected by the Shift to SaaS?
• Sales
• Marketing
• Technical Product Management
• Product Development
• Customer Support
Costs
Buyer Value
ValueInnovation
Simultaneous pursuit of Differentiation and Low CostThe Cornerstone of Blue Ocean Strategy
A New Value Curve
EliminateWhich of the
factors that the industry takes for granted should be eliminated?
ReduceWhich factors
should be reduced well
below the industry standard?
RaiseWhich factors
should be raised well above the
industry standard?
CreateWhich factors
should be created that the
industry has never offered?
The Four Actions FrameworkBlue Ocean Strategy
29
Value Innovation – Sony PS3
30
Value Innovation – PS3 vs Xbox 360
31
Value Innovation – Nintendo Wii
Case Study – Hosting Value Innovation
0
1
2
3
4
5
Pricing
Back-en
d Systems
Geogra
phic R
each
Mess
aging &
Posit...
Indir
ect S
trateg
y
Segmen
ted SLAs
Mark
et Focu
s
Technic
al Enab
lemen
t
Busine
ss Enab
lemen
t
Existing Industry Practices
Case Study – Competitive Differentiation
0
1
2
3
4
5
Pricing
Back-en
d Systems
Geogra
phic R
each
Mess
aging &
Posit...
Indir
ect S
trateg
y
Segmen
ted SLAs
Mark
et Focu
s
Technic
al Enab
lemen
t
Busine
ss Enab
lemen
t
Existing Industry Practices OpSource
Value Innovation – High Level Analysis
0
1
2
3
4
5
Techno
logy
Mark
et Focu
s
Service
and Supp
ort
Mess
aging &
Posit...
Pricing
& Pac
kaging
Deman
d Gen
eratio
n
Partne
rships
Geogra
phy
Existing Practices at Provider Existing Competitive Environment
Differentiating Against Provider X
Existing Applications New Applications
Beat the Competition
Advanced Collaboration &
Workforce AutomationProject management
CRM and SFAIssue management
Document managementDepartmental portals
Real-Time Communications& Collaboration
Secure IMVoIP
Web meetingsWAP enablement
Peace Of MindHands-Off Operations
No distractionsOn-demand storage
Archival
SecurityVirus protectionPhysical security
Data security
Reliability & Availability
SLAs High availability
infrastructureSolid 24x7 Tech
SupportOff-site Backup
Get More DoneCollaboration
Shared contactsShared resourcesTask assignment
Task TrackingFile sharing
SchedulingMeeting Management
InvitationsShared calendar
Free/Busy SchedulingResponse Tracking
Anywhere AccessMobile Devices
Always Up-to-date access to Email,
Calendar, Contacts, & Tasks from Windows
Mobile Devices
Remote AccessSecure Access to
Email/Calendar/Contacts/Tasks from Laptops while
travelingFile access while
travelingAccess from any PC using Outlook Web
AccessOffline access when
not connected
Provider X Positioning Differentiation Opportunity
On-Premise Competitive Analysis• Strengths
– Mid-market and enterprise awareness– Perceived lower TCO (customers with >50 mailboxes, IT
resources)– Mature and capable on-premise support community– Entrenched VAR business models selling boxed product
• Weaknesses– Broadband Outage means No Receipt of Email at the Server
• Customers receive error notifications when trying to send email!
– Lack of IT experts to support today’s complex email demands • Means added costs to hire outside resources
– High up front costs of offers
Please rate the importance of the advantages listed to your organization
Stress low upfront
investment
Edge Strategies WSS Research, September 2005
Competing with On-PremiseValue of Hosted Advantages (among
adopters)
Differentiating Against On Premise
Existing Applications New Applications
Beat the Competition
Advanced Collaboration &
Workforce AutomationProject management
CRM and SFAIssue management
Document managementDepartmental portals
Real-Time Communications& Collaboration
Secure IMVoIP
Web meetingsWAP enablement
Peace Of MindHands-Off Operations
No distractionsOn-demand storage
Archival
SecurityVirus protectionPhysical security
Data security
Reliability & Availability
SLAs High availability
infrastructureSolid 24x7 Tech
SupportOff-site Backup
Get More DoneCollaboration
Shared contactsShared resourcesTask assignment
Task TrackingFile sharing
SchedulingMeeting Management
InvitationsShared calendar
Free/Busy SchedulingResponse Tracking
Anywhere AccessMobile Devices
Always Up-to-date access to Email,
Calendar, Contacts, & Tasks from Windows
Mobile Devices
Remote AccessSecure Access to
Email/Calendar/Contacts/Tasks from Laptops while
travelingFile access while
travelingAccess from any PC using Outlook Web
AccessOffline access when
not connected
Differentiation Opportunity
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