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  • 1. CSC SaaS Acceleration Our Approach to SaaS Business Readiness for ISVs SaaS Business Readiness White Paper Page 1 © 2007 CSC Corporation
  • 2. Table of Contents 1 Introduction......................................................................................................... 3 2 Why ISVs are entering the SaaS Market ........................................................... 3 3 Going to Market .................................................................................................. 4 4 Framework Overview ......................................................................................... 4 5 Business Readiness Framework....................................................................... 5 5.1 Market Opportunity Assessment................................................................ 5 5.2 Messaging and Positioning ........................................................................ 7 5.3 Product Positioning, Packaging, and Pricing ............................................. 8 5.4 Web-Driven Business Model...................................................................... 9 5.5 Demand Generation .................................................................................. 9 5.6 Online Customer Experience ................................................................... 10 5.7 Direct/Indirect Sales................................................................................. 11 5.8 Organizational Effectiveness ................................................................... 12 6 Summary ........................................................................................................... 12 7 Appendix: Key Success Factor – Maturity Matrix.......................................... 13 SaaS Business Readiness White Paper Page 2 © 2007 CSC Corporation
  • 3. 1 Introduction ISVs are looking for many more services than other hosting companies provide. ISVs considering SaaS are more concerned about quickly and effectively entering the market. Sales and marketing must quickly produce results and build a solid customer base. CSC’s Business Readiness Framework is designed do to just that. Our framework is tried and tested in 140+ engagements and counting. This white paper provides a detailed description of our framework. After reviewing this document, please contact CSC’s SaaS Acceleration Team if you have further questions or are interested in utilizing CSC’s go-to-market expertise. Before discussing the details of our Business Readiness framework, it is important to take a step back and understand what makes SaaS so exciting for ISVs and their customers. 2 Why ISVs are entering the SaaS Market In many cases, ISVs make the move to SaaS because either their current customers are asking for it to reduce their support costs or potential customers are requesting a service model rather than the much more expensive traditional software model. As IT budgets remain under tight scrutiny, businesses will need to validate and demonstrate the value received out of every dollar spent. Recent analyst studies identify cost-savings initiatives as a major driver for SaaS adoption. SaaS providers have done well with disseminating this message to the marketplace, and cost savings will continue to be an important incentive to explore/adopt SaaS. • Analysts are expecting significant growth in the SaaS market over the next 3 – 5 years. While the overall software market is experiencing relatively small gains, SaaS is enjoying significant growth. By 2010, 30% of all software sales are expected to be delivered as a service – totaling an expected $22 billion in annual revenue opportunities. • SaaS provides several advantages for ISVs as well. From a financial perspective, executives and investors love recurring revenue. While it may take time to build your customer base, the financial benefits and peace of mind are invaluable. ISVs also have better visibility into end user interaction which is critical input to product enhancements. From a sales perspective, SaaS gives you the opportunity to lower your cost of sales by providing free trials. A significant percentage of trial customers convert to paying customers, and those that don’t convert are qualified leads for your direct sales team. • There are those industry experts who believe SaaS will take the same path as the last decade’s ASPs and eventually fade away as the novelty wears off. CSC believes this is highly unlikely since SaaS is fundamentally different than the ASP model; the multi-tenancy architecture of true SaaS significantly reduces capital and operational costs for customers, making dollar savings real. In contrast, the ASP model offered customers minimal if any real savings. Though a detailed description of the technical advantages of SaaS is outside the scope of this document, please see CSC’s Technical Readiness white paper for a more details on SaaS architecture design and associated benefits. SaaS Business Readiness White Paper Page 3 © 2007 CSC Corporation
  • 4. 3 Going to Market Software-as-a-Service is a fundamental shift in the software industry – a shift driven by the economic advantages described above. In addition, taking Software-as-a-Service to market is fundamentally different from traditional software. • SaaS opens the doors to new market segments. A majority of the SaaS offerings initially gain acceptance in the SMB market before generating significant interest with mid-market and enterprise corporations. • SaaS requires a new pricing strategy typically based on a monthly subscriber rate rather than significant upfront license and annual maintenance fees. Tiered pricing may also be required to support different types of end users. • Your web site is the focal point of your go-to-market strategy. All marketing initiatives should drive visitors to your site to learn, self qualify, try, and possibly buy your service. • Increase traffic to your site produces more qualified leads. Capturing their contact information is critical. • Give customers the option to try your service for 1 – 2 months before they buy. • Provide an intuitive online buying and self administration processes giving customers everything they need to be self sufficient. 4 Framework Overview CSC’s Business Readiness framework is based on implementing best practices across 8 Key Success factors, identifying target markets, and financial modeling. While other providers or consulting firms offer the latter two services, our intimate understanding of these key success factors is our competitive advantage. These key success factors have been developed as a result of over 140 engagements evaluating diverse firms’ ability to successfully launch and sell new SaaS offerings. What are these 8 key success factors? Our team of experts found that the best firms out there excelled at: 1. Competitive Differentiation Figure 1 2. Messaging and Positioning 3. Packaging and Pricing 4. Web Driven Business 5. Demand Creation and Lead Generation 6. Online Customer Experience 7. Indirect and Direct Sales 8. Enhancing Organizational Effectiveness For each success factor, we defined 5 maturity levels (figure 1) and guidelines designed to help ISVs determine areas where they excel and areas that require improvement. The graphic below defines the different maturity levels. (Please see the appendix for Key Success Factor – Maturity Level Matrix and score your firms maturity for each key success factor) SaaS Business Readiness White Paper Page 4 © 2007 CSC Corporation
  • 5. Our framework guides you through the steps required to excel in all 8 areas. While detailed descriptions are provided for each step, it is beyond the scope of this paper to include all the nuances you may encounter depending on your situation. Please contact CSC’s SaaS Acceleration sales team to schedule a detailed go-to-market discussion. 5 Business Readiness Framework 5.1 Market Opportunity Assessment For software companies planning to migrate to SaaS, analyze your current segment(s) in order to understand their appetite for SaaS. In some cases your current segment may not be the sweet spot for a variety of reasons. Large enterprises for example, are concerned about security and may not want to be on the same platform as your other customers until the service is proven. Salesforce.com was in the market for several years before large enterprises felt comfortable that the service was secure and had the sophistication they needed. New SaaS offerings tend to appeal to early adopters. Is your current segment noted for early adoption or do they tend to be followers or even laggards? As a result of this exercise, you may wish to pursue new attractive segments or find adjacent markets within your current segment. Identifying market potential within each segment is obvious to everyone reading this document – challenge is determining the best method to quantify the opportunity. There are several methods to validate the market’s appetite for SaaS. One popular method is poring over analyst research reports and allowing this analyst data to drive your segmentation scheme. This approach requires significant interpretation and any misinterpretation can be costly. A more effective approach involves using analyst data only as a validation of your own findings—from direct customer interaction, commonly performed by your product managers. Your product managers will want to get out of the office and meet with prospective businesses in a non-sales mode to understand your target market first hand. These discussions should have several objectives: • First, are these prospective customers experiencing the pain you think they are and what is the pain level? Solving high pain points has more value, thus commanding a higher price point for your service. • Second, how are businesses addressing these pain points today? Are they using a manual work around or kludged systems? Look for the ‘duct-tape’ solutions—instances customers describe in which they are cobbling together a makeshift answer to their real needs due to shortcomings in the systems they have purchased currently. • Third, what is their appetite for SaaS and are they comfortable purchasing a service or do they prefer to manage the application themselves? Listen carefully to understand their sensitivity to ‘keeping and protecting’ their data versus ‘worrying and fretting’ about losing information and dealing with the hassles of not being able to meet their customers’ expectations. • Finally, who are the buyers and influencers and how do they look for solutions (online search, trusted colleagues, trade publications, etc.)? Your product managers will not have time to meet with hundreds of companies to validate the information these points are persistent. Use surveys and third party research to validate the pervasiveness of your findings beyond the limited number of customers you are able to interview in person. SaaS Business Readiness White Paper Page 5 © 2007 CSC Corporation
  • 6. Business needs/opportunity drivers are the cornerstone for your messaging and positioning for all of your sales and marketing collateral as well as your web site. Take the time to make sure you have this right. An extra week or two at this stage will save you months down the road. If your service is targeting a different segment or moving down market, it is critical to examine how well your current processes and culture map to your target segments processes and culture. One of the classic mistakes companies make is assuming their existing sales process will work as is for a different segment. For example, the sales cycle for large enterprise customers is usually long, costly, and generates reams of proposal ware. Mid-size companies or smaller don’t have the cycles to burn during the sales process nor do they have the time or desire to spend hours and hours reading your proposal. They want to understand how the solution improves their business. 5.1.1 Alternatives/competitors Businesses are somehow coping with this need today. Understanding what they are doing today dramatically improves your online and offline messaging. The more a prospective customer believes you understand its situation, the more likely you are to win the deal and usually at a higher price. You should also have an idea how much their current solution costs them which is a key input into your pricing model. In most cases, business won’t give you a number, but if you understand the alternative make an educated guess on the cost. Thoroughly research the competition which includes not only direct competitors but also alternative solutions. We’re all so used to viewing only direct competitors we lose sight of possible alternatives. When Intuit went to market with Quicken, they viewed their competition as pen and paper because at the time personal finance management software didn’t exist. Hopefully, you’re in the same boat as Intuit and don’t have direct competitors. For direct competitors and alternatives, analyze how well your solution stacks up. Avoid the temptation of inflating your solutions advantages and competitors’ disadvantages. Potential customers will see right through this and you’ll lose credibility. If you spend time meeting with businesses, you will be better prepared to value the advantages and disadvantages as they would. 5.1.2 Financial Modeling You are probably asking; why not jump right to financial modeling after understanding the market opportunity? The answer is it is difficult to assess expected market penetration and subscriber price points without understanding how much your target segments value solving needs as well as pricing pressures from competitors and alternatives. Taking the time to gather this information will help you estimate your market share potential and target price points. You also need to determine costs and anyone who has developed financial models knows actual costs are almost always higher than projected costs. If SaaS is new to your organization, development costs will be higher than expected because you don’t know what you don’t know until you stumble across it. This is a good juncture to add SaaS technical and operational expertise to your team to assist with developing an accurate cost model. At this point, you should have everything you need to make a go or no go decision. You have a solid understanding of the pain points, market opportunity, competition, and financial analysis. It is also based on what the market is telling you rather than opinions reducing internal “heated discussions” about customer needs, pricing, messaging, etc. SaaS Business Readiness White Paper Page 6 © 2007 CSC Corporation
  • 7. 5.2 Messaging and Positioning 5.2.1 Buyer/Influencer Personas Understanding customer pain points is a great start towards developing a solid go-to-market strategy for your SaaS offering. It is also important to understand who is typically responsible for making the buy decision as well as the influencers. For mid size and smaller companies, buy decisions are usually made by business people with limited technical skills. The buyer relies on an influencer to validate your service will meet their needs. For each segment you are pursuing, create at least one persona (if persona concept is new to you, http://www.wikipedia.org/, search on personas, does a good job of explaining the concept) for the buyer and another for the influencer. Understanding buyers and influencers is critical for your marketing and web team to create collateral and web experience your audience will understand. Writing quality copy is challenging enough, but it is almost impossible to write good copy if you don’t humanize your audience. Write your copy as if you are communicating directly with these personas. It’s easier and more effective to write a letter/e-mail to someone you know as opposed to the agony of creating a form letter designed for a generic audience. 5.2.2 Buying process Most ISVs develop a sales process that is inwardly focused and rarely matches up with how businesses buy. For example, most potential buyers must be educated about your service’s ability to address their challenges. Businesses will not buy a service if they don’t understand how it will help them run their business more effectively. Sound obvious. Yet most ISVs marketing collateral and web site devote a tremendous amount of real estate describing how the service works rather than what problems it solves. One of the topics you should cover during your interviews is how businesses buy services and the information they are looking for during each step. The first step usually involves educating themselves on potential solutions and what other companies are doing to address a specific need. Influencers are typically responsible for information gathering. After gathering information, prospective customers perform a high level cost benefit analysis before moving forward. It is at this point, they may contact you to get more information about your service and budgetary pricing. However, it may already be too late as they may have a preferred solution at this point. Your company needs to be resource for them at the beginning of the buying process. Use your web site to provide information potential customers need at the beginning of the buying process. Also consider offering a free trial for a month or two to give potential customers a chance to try before they buy. Some ISVs report conversion rates as high as 80%. If possible, give businesses the option to do this without your assistance. Many businesses don’t want to be sold at this time and don’t want to talk to sales, but they will sign up for a free trial. 5.2.3 Effective marketing channels per persona There are multiple marketing channels you need to leverage for each of your personas. Understanding the most effective methods to reach them is another valuable output from your interviews. Recognize that personas today fall into two primary categories relative to their usage of the Internet: web-centric, and web-agnostic. Web-centric personas view the Internet as a place where they can search for business solutions, find them, self-qualify (and possibly try them), make the buy decision, and purchase the offering. Web-agnostic personas will not make use of the Internet to find business solutions, and must be pro-actively sold using more traditional means. An effective go-to-market strategy must address both the web-centric and the web-agnostic constituencies in order to be successful. 5.2.4 Messaging Regardless of the marketing channels, your messaging must be consistent and relevant to your target persona. The messaging on your web site must be consistent with messaging in your marketing SaaS Business Readiness White Paper Page 7 © 2007 CSC Corporation
  • 8. collateral, sales presentations, print advertising, etc. Potential customers see inconsistent messaging as a red flag that an organization does not have its ducks in a row and will go elsewhere. Or worse, they keep you around as a bargaining chit. More often than not, messaging tends to be based on ISVs jargon rather than jargon that makes sense to the buyer or influencer. Inward facing messaging results from a lack of understanding target segments well enough to use terms the market easily understands. Ideally, your key messages are based on business needs and challenges rather than features and functions. The easiest way to develop a relationship with a potential customer involves understanding their business and challenges before pitching any solutions. For each of the business challenges you identified, describe how your solution addresses each need and the benefit businesses can realize by addressing this need. At this point, you haven’t described a laundry list of features that require a customer to understand each feature and how to apply it to their business. Tell them only about the capabilities that are relevant to this particular need. For your technical audience, you should have collateral & web pages that describe features and functions, but don’t lead with this. 5.3 Product Positioning, Packaging, and Pricing How your company is perceived is governed by how well you implement sound marketing principles. Be sure to organize your web site and marketing collateral from your customers’ perspective rather than your company’s perspective. This is especially important for your web site. All too often, firms list all their different products and services and require potential customers to wade through reams of all these different products, in order to understand how each products works, and sort out which product might be suitable for them. While this is an extremely annoying approach for a company with many products, it is also a poor approach for a company with even just a few products or services. If you adopt a customer needs-based approach as described above, product positioning is straightforward. For each need, offer bundles of appropriate products and services. Keep in mind, your customers want to know how you can help them and are not as concerned about the individual product and services required to solve their problem. If you don’t have to provide detailed product and service specifications included in a bundle, don’t. Buyer and influencer personas will help you determine how much detail is needed. It’s common for ISVs to offer a wide variety of bundles that they believe will address any situation. As a result, many different bundling options are available and potential customers must figure out which one is best for them – typically confusing and time consuming process. This approach actually reduces sales since customers get confused and can’t figure out what they need. Ideally, you should have one option per need. If you want to go with two options, be aware most customers will select the least expensive option. If you have different options & pricing for a bundle make sure the customer can clearly understand why one option is more expensive than another. For example, if disk space is a line item in your bundle and your basic package is $50/subscriber/month with 2 GB of disk space and your premium package is $100/subscriber/month, disk space for the premium package should be at least 4 GB. Carefully examine the quantifiable line items in your different options and confirm the quantities increase appropriately. Your customers are not as close to the product as you are, so they may not understand the value of intangible line items. Everyone understands quantities. SaaS Business Readiness White Paper Page 8 © 2007 CSC Corporation
  • 9. 5.4 Web-Driven Business Model The application of a web-driven business model means your web site is the focal point for customer interaction. In other words, existing and potential customers will use your site to educate themselves on their challenges, your company’s solutions, view a demo, ideally test drive the service, self administer your service (i.e. add/delete subscribers), and use it for customer service. Earlier we stated there are two types of buyer personas; web agnostic and web centric. You should leverage a web driven business model for both personas. While it is unlikely web agnostic personas will find your site through search, many will visit your site after they’ve heard about your company through a trusted advisor or traditional advertising/PR. The major differences between web centric and web agnostic buyers are how they find you and how you communicate with them once they arrive. Both will use your site. Your web site is not only a great sales tool for new customers, but you should also use it to up-sell existing customers. Most likely, your SaaS offering has a portal that customers can use to view performance levels, billing information, add or change users, etc. Consider using the portal as a sales tool that recommends additional services a customer may need. Don’t haphazardly display new products and services; make sure this content is always relevant. How often have you clicked on a banner or paid search and couldn’t find what you were looking for when you arrived at a company’s site? Some companies take the approach of casting a wide net and see what shakes out. This is a costly approach with a high abandonment rate. Potential customers are frustrated because they can’t find what they are looking for and quickly leave. If implementing a paid keyword search campaign, take the next step and develop targeted landing pages or micro-sites for each need and each marketing campaign. Through paid search or traditional advertising/PR, drive the appropriate traffic to these landing pages. By keeping a tight dynamic between your advertising/PR/paid search messages and your landing pages, you will significantly lower your abandonment rates. It’s amazing how much time and effort ISVs may spend on their web site only to stop managing it after it is live. Don’t forget about it! Your web site is a great sales tool and should be treated it more like a living breathing sales person than technology. Feed it, keep it happy, and it will work hard for you! One person should be responsible for managing and maintaining the site—ideally a sales and marketing person. Avoid the temptation to offload this task to IT simply because the pages reside on a server; there are marketing output expectations for the site that are nothing like standard IT project expectations. The site should have a sales or lead generation quota. During weekly sales meetings, review how well the web site is performing against targets and what is being done to improve performance. 5.5 Demand Generation While there a lot of demand generation techniques, a brief analysis is required to determine which technique will work best for you. For example, how strong is your brand from a global perspective as well as within your targeted segments? Are your buyers and influencers primarily web agnostic or web centric? What information sources do buyers and influencers reference to identify potential solutions? Is the target segment aware of the problem your solution solves or is it a situation where they don’t know what they don’t know? If your buyers and/or influencers use the web as their main tool to gather information and evaluate different solutions, more emphasis should be placed on search engine optimization (SEO), paid search, and actively participating in relevant blogs and forums. Regardless of which demand generation technique is appropriate, your goal should be to develop a trusted advisor relationship with potential and existing customers. In order to do this you need to educate your target segments and the problems they face for which you have solutions and potential solution(s). Businesses simply will not buy until they believe the problem is significant enough to warrant a solution and you can solve this problem cost effectively. Too many ISVs attempt to sell before potential SaaS Business Readiness White Paper Page 9 © 2007 CSC Corporation
  • 10. customers have come to terms with the problem. Don’t waste your time. The key to effective demand generation is identifying businesses that have the problem your company solves and value a solution. Ask thought leaders within your organization to develop white papers, write articles, and present at relevant trade shows/organizational events in an effort to spread the word about business challenges and solutions. These are typically awareness activities that generate highly qualified leads through inbound calls or visits to your site. The next step is capturing these leads. There are several techniques that will help you do this. Free trial is one technique discussed earlier. Another technique involves incorporating a knowledge base on your web site containing valued educational content such as white papers, research, articles, etc. Require site visitors to register prior to viewing this content and track what they are viewing. Your sales team will be elated to get a weekly report containing qualified leads and their interests. After you’ve convinced businesses of the problem and your ability to address the solution, they may need a little push before they are willing to buy. This is where a free trial comes in handy. Give perspective customers to try your solution for 1 – 2 months so that they can see first hand how it works. Simplify the trial sign up process and give them access to all the features. Don’t make the mistake of limiting features in the trial to the point where a trial user becomes frustrated. A well executed free trial can have conversion rates from trial to buy as high as 80%. For those that don’t end up buying, follow-up and find out why they didn’t buy. 5.6 Online Customer Experience This is where the buying process becomes very important. Too often companies develop a web site flow that mimics their sales process. Typically web sites display a lot of information about products and services, but very little information that explains common problems your service solves and the benefits customers can expect to receive. Your web site should mimic the buying process real customers follow and reveal an understanding of the information required by customers at each step. If the first step is information gathering, make sure you have the information a customer will need. At an early point in the buying process, potential customers usually need the following: 1. Confirm an understanding of the primary need/s and how the service addresses them 2. High level overview of your service. Provide a link that covers your service in more detail, but significant detail typically is not required at this stage of the buying process. 3. Credentials giving them comfort your solution does what you say it does. For example include customer testimonials, case studies, third party endorsements from analysts, logos of business or product awards, magazine review links, list of marquee customers, etc. 4. Provide information that can help them build their business case such as quantifiable cost savings. This information should also be included in the case study. Potential customers will be leery of cost savings so make sure the numbers are reasonable. Good sales people don’t waste time selling until a potential customer is convinced they have a need and your solution effectively addresses this need. Your web site should act the same way. Give them the information they need to self qualify. Businesses that are ready to buy may want to either buy online or through an account manager. Make sure they have both options readily available. If they chose to buy online make sure the process is intuitive and requires as few steps as possible otherwise your abandonment rate will be unacceptably high. It may seem trite, but go ahead and ‘count clicks’ for a typical purchase—then do your best to minimize them. SaaS Business Readiness White Paper Page 10 © 2007 CSC Corporation
  • 11. For those customers that opt to try the service before buying, stay in touch with them during the entire trial period. It is critical that trial customers make the most of your value added features during the trial. One effective method is a tip of the week e-mail to all trial users, not just the administrator. Also, ask trial customers to respond to your e-mail and indicate if the tip was helpful. This will help you tweak your messaging and improve its effectiveness. Use your web site as an up-sell tool. You know what services your customers are using. If you have another service that they should consider, tell them about it through your web site, newsletters, and control panel. Offer free trials for up-sell services as well. Your costs are minimal, assuming little or no implementation effort, and the upside can be tremendous. Excellent customer service is the key to reducing churn as well as viral marketing. Customer forums/blogs on your site are an effective tool for customers to share ideas, help each other out, and provide invaluable feedback to your organization. Before making this leap, make sure you have the resources to manage/review these tools on a daily basis. No doubt you will receive complaints which can be a positive as long as you act on it in a timely fashion. For your existing customers, periodically (i.e. quarterly) send out surveys or post survey questions on your control panel. Keep surveys short and concise with no more than 6 or 7 questions. Communicate survey outcomes and action taking based on their response. This improves future participation. Your customers are glad to help as long as their feedback is taken seriously and acted upon. 5.7 Direct/Indirect Sales All of the information you’ve captured this far is incredibly valuable for your direct and indirect channels. Target segments, business needs, buyer/influencer personas, buying process, competitors/alternatives, etc. is all great sales training material. Most ISVs train sales people on product features and functions rather than how to sell the service. While product features and functions are important, your sales team must be trained how to find qualified opportunities. Train them on target customer profiles, pain points, buyers/influencer motivations, how your solution addresses pain points, and business benefits. You should also elicit feedback from your sales team and refine needs, personas, etc. based on what works and what doesn’t work for sales. This also helps product managers improve development of these deliverables for future service enhancements or new services. If an indirect channel is an integral part of your sales strategy, search for channel partners that compliment your service. For example, if implementation consulting service is required, build relationships with consulting companies that have the talent to implement your service as well as bring business to you. Most ISVs prefer to pass on implementation services because managing a bench is not their strong suit and consulting services lower overall margins. ISVs are also a great lead source for consulting firms. There is no better way to build a strong relationship than both parties bringing each other into opportunities. For your top tier partners, develop joint sales and marketing strategies that are approved at the executive level. Solid relationships must exist at all levels. Conduct monthly performance reviews and incorporating any necessary adjustments. Review progress against plan with executive sponsors every 6 months. This is a valuable mechanism to not only keep you on track, but also tighten the relationship. While this may sound time consuming, your top tier partners want a focused and productive relationship. Avoid the mistake of focusing all your efforts on partner recruitment rather than execution. SaaS Business Readiness White Paper Page 11 © 2007 CSC Corporation
  • 12. 5.8 Organizational Effectiveness Of the 8 key success factors for SaaS, organizational effectiveness is by far the most important. An organization’s ability to define a sound strategy and then stick to it is a must. Too often we see companies constantly changing direction based on a whim, the latest expert opinion, news article, etc. These companies are operating at a breakneck speed, but never seem to accomplish much. We’ve also worked with companies that did poorly in 1 or 2 other key success factors, but were successful due to a focused management team that knew how to execute. These firms had their share of heated discussions during planning sessions, but managed to put aside their differences once the plan was finalized and keep their organization focused. There are two primary characteristics organizations need to be successful for years to come. First is discipline. As the old saying goes, Rome wasn’t built in a day. Be patient. The second characteristic is a sound go-to-market methodology. If you decide to adopt this methodology or another you believe in, stick to it making slight modifications as you learn what works well for your company. Be open to adaptation as you sense things are not working well; what works for one company may not work for another. Companies also grow and evolve and management must continually adapt—be sure to remain open to recognizing the changes within your own firm as the effects of migrating to SaaS take hold within your firm. Incorporate continuous improvement into everything you do including your go-to-market framework. We believe that the framework described in this white paper is a proven, market-tested framework, but you may find some of the steps need to be altered based on your own company’s personality. The key is a healthy balance of stability and change. Don’t look back; the wind is with you! 6 Summary If many of these concepts are new to your organization, leverage our experience to guide you through your first iteration. CSC’s Business Readiness consulting service is designed to teach you our framework by working through a go-to-market initiative together. It doesn’t matter if it is a small or large project. Our goal is to position you for success and give you the tools and training for continued success. Please contact CSC’s SaaS Acceleration team at (800.892.0776) to schedule a detailed go-to-market discussion. SaaS Business Readiness White Paper Page 12 © 2007 CSC Corporation
  • 13. 7 Appendix: Key Success Factor – Maturity Matrix The following matrix lists each of the 8 Key Success Factors, and within each Success Factor, a brief description designed to help you determine your maturity level. Review this matrix with your management team and score your organization’s maturity level. A 3 or higher is considered a good score. Your goal should be to score at least a three in all 8 areas. Competitive Messaging & Packaging & Web-Driven Level Differentiation Positioning Pricing Business Provider has created true Blue Vertical (e.g. Real Estate), Micro-market specific Micro-market sales sites for Ocean (aka uncontested market Horizontal specialization (e.g. packaging/bundling of service specific vertical markets (e.g. 5 space) by differentiating along a Finance), or other micro-market with vertically focused add-ons. real-estate). Fully integrated Optimized unique axis that reaches beyond specific positioning. User focus Market research used to PPC/SEO and pro-active analysis current market boundaries and groups or surveys are pro-actively understand customer price-point of web-analytics existing demand used to incorporate customer sensitivities. feedback into product life-cycle. Provider has differentiated with a Best Practice positioning based Some type of unique Differentiated sub-sites and/or 4 vertical market focus with vertical on a well-defined messaging & differentiation of packaging or landing pages aligned with best- Competitive (or micro-market) specific add-on position framework (see pricing that sets the provider practice positioning of value capabilities/features. template). Customer centric apart of the reset of the pack. proposition according to positioning that blends customer- messaging & positioning benefit as the solution for the framework customer pain point/problem. Provider has differentiated from Customer centric positioning with Small number (2-3) of different Best-practice site that allows the competition by bundling Benefits (e.g. Anytime, Anywhere customer/user "plans" that align customers to 1) Search; 2) Find; 3 additional services or capabilities access), then supporting benefits correctly with end-user or 3) Self Qualify; 4) Try (Free Trial Predictable not offered by the competition. points, then features as customer personas. Value where possible); 5) Make the appropriate. Consistent differentiation between different buying decision; 6) Buy; 7) application of messaging price plans is clear and Activate. Web-site is the focal throughout ALL collateral. significant. point of the business. Provider's offering is functionally Still product and feature centric Competitive pricing and correct Customers can search, find, and equivalent to that of other positioning with progress towards packaging, but actively working to buy. Provider is actively working 2 providers, resulting in a "my customer-centric benefits eliminate other inhibitors (e.g. to ensure that all of the Inhibited feature X beats your feature X" positioning. Typically a lack of contract minimums). information required to make a competitive differentiation tactic, consistent application of successful buying decision is on but ultimately resulting in a price- messaging across all channels the site and correctly presented, competitive sale. and collateral. eliminating any final inhibitors to selling. Provider is offering the exact Positioning is completely product Typically characterized by Customers are unable to find same service offering as other and feature centric. Positioning is uncompetitive pricing, minimum offering, presentation is 1 providers (perhaps based on effective only for customers who contract terms, minimum # of confusing, no online self- third-party technologies) with no already know what they need and users, confusing pricing, too subscription is available. Ineffective opportunity for true differentiation, are already familiar with the many tiers of service, multiple resulting in a Red Ocean in which specific application domain. tiers instead of "add-on" options. the only remaining competetive differentiator is price. SaaS Business Readiness White Paper Page 13 © 2007 CSC Corporation
  • 14. Level Online Customer Direct/Indirect Sales Organizational Demand Generation Experience Process Effectiveness Micro-market specific demand Integrated up-sell and cross-sell Vertical or micro-market focused Organization is designed and generation campaigns with activities into customer "control channel partners with lead flow internally aligned for change. 5 integration across all forms of panel". Pro-active and ongoing integrated into micro-marketing Specific processes for continuous Optimized demand generation (e.g. PPC, customer feedback management campaigns. Channel partner improvement. Healthy balance of Banner Ads, email, direct mail, (surveys of customer panels by branded sales sites. Integration of management (stability) and print) segment to assess customer channel partner into knowledge leadership (fostering change). experience, satisfaction, needs) base, live chat, etc. Demand generation campaigns Integrated online knowledge-base Integrated lead/opportunity flow Strong executive sponsorship for drive to a specific sub-site or and live-chat for both sales for channel partners. Mature improving existing offerings and 4 landing page. All campaign support and post-sales support. process for lead qualification and adding new value-added service activities are well coordinated and Pro-active email communication routing of leads. Customer offerings. Proven organizational Competitive integrated. Iterative PPC/SEO during first 30-60 days provides segmentation and qualification agility and rapid time-to-market in campaign management. training, tips, tricks, etc. "drives" the opportunity response to competitive threats. management. Makes use of pro-active Self-guided sales experience, Pro-active management of direct Organizational alignment around PPC/SEO campaigns. All self-admin capabilities, no sales, inside sales, and channel business objectives and customer 3 demand generation activities lead barriers to sale via web, or phone. partners. Focus on customer needs. Repeatedly follow a short Predictable to one place -- the web-site. Easy signup and activation. segmentation and lead and defined life-cycle for the qualification. Pro-active training. successful introduction of new or revised product offerings. PPC/SEO and other demand Self-guided signup, support, Direct Sales, indirect channels, Good executive leadership in 2 generation capabilities are and/or self-administration but telesales, but with ineffective place and committed to drive Inhibited leveraged, but with some inhibited in some way -- e.g. processes for lead qualification change and improve business inhibiting factors that limit their overly complex registration and routing of leads to "best performance by driving effectiveness (e.g. mismatch process, complex activation. qualified" channel. Provider is improvements in accordance with between PPC terms and landing Active progress is being made to actively working to train sales and the "key success factors". page positioning). eliminate remaining inhibitors. revise processes to improve effectiveness. No PPC/SEO campaigns. Other No self-signup capability, direct Direct sales only. No pro-active Ad-hoc organizational and demand generation activities (e.g. sales interaction required. No lead qualification. No customer departmental behaviors with a 1 Print ads, direct mail, etc) do not offering self-administration. segmentation by size or industry. lack of internal alignment towards Ineffective leverage the web-site. Characterized by tendency to achieving a common vision or focus too far up-market. Long business objectives. sales cycles. Lack of "solution specialist" capability results in inability to overcome common objections. SaaS Business Readiness White Paper Page 14 © 2007 CSC Corporation