The Best Marketed Software Ever!

I have recently been advising a client on how to improve their marketing and sales effectiveness. The company is a very innovative manufacturer of industrial equipment and despite the economy, they are in rapid expansion mode. One of their key goals is to implement an integrated marketing and sales platform to more quantitatively manage direct sales, channel sales and marketing activities. The company has decided to move forward with Salesforce.com, a decision I wholly endorse, and a platform that I have led the implementation of twice in the past. But I digress, this post is not about the criteria for selecting an integrated sales and marketing platform, rather it is about excellent marketing. 


After (re)evaluating the current features of a handful of CRM competitors like SugarCRM and Microsoft Dynamics CRM, Salesforce.com takes the cake. Their feature checklist keeps them in the game, but it is their marketing, sales and positioning that really makes them standout. Can't say it's surprising. Since Salesforce.com burst onto the enterprise software scene in the late 90's, they have year-in and year-out done an excellent job of positioning their solutions, defining value props and making it easy to try then buy. First, it was "No More Software" and "Lower TCO", then it was extendability within their ecosystem with AppExchange, now it is about "the Cloud" and the volume of success stories (1.5million success stories and counting) using their service.


Effective Positioning (Product Marketing & Product Management) is obviously critical, but the Promotion (PR, Product Marketing and Field Marketing) then Sales (Direct Sales / Indirect Sales) is where Salesforce.com really shines versus their competitors. They are the company getting the awards, driving the industry buzz, showing up everywhere and growing at an industry leading rate.


I guess if you are the segment leader in CRM, it is almost expected. So how could you replicate Salesforce.com's success? A good team and strategy is important, but Marketing & Sales spending is where the difference really comes in. Microsoft, CA and Intuit all have strong teams, sound strategies and are certainly no slouches on the Marketing & Sales front, but the discrepancy in marketing spend is astounding:


Sales & Marketing as a % of Total Revenues From Most Recent Financials:
Microsoft spent $12,879m on $58,437m [22%]
Intuit spent $927m on  $3,183m [29%]
CA spent $1,214 on $4,271m [28%]
Salesforce.com  $534m on $1,076m [49%]


What is even more remarkable, is that Salesforce.com is essentially a one trick pony (i.e. CRM). All the others have broad portfolios of products and services.


Bottom Line:  While business success requires excellent Marketing and Sales execution, outspending your competition and blowing the doors off of industry spend comparables, certainly doesn't hurt.

Twitter? Show Me The B2B ROI

A colleague of mine recently asked if we were doing anything with Twitter, and she was shocked when I said "No". I proceeded to explain that while I am always looking for new ways to get exposure for IQ, I can't justify the expense (yes I know it's free - but as with any other communications initiative, it does have a content creation and internal "maintenance" cost) without an ROI. All my other tactical marketing programs have an ROI expectation, Twitter would be no different.

There is so much hype about Twitter right now, that the need to quantify actual business value is getting overlooked. If there is no value (measured by return on investment), why do it? If you Bing "Twitter ROI" you get about 535,000 hits with Dell's $3m total revenues as being the ROI poster child.....not too impressive given Dell's multi-billion dollar annual revenues and that they have been Tweeting for 2 years.

For B2B marketing, especially of enterprise applications, there is an even bigger hurdle to Tweeting.....sales dynamics. Who is going to follow you unless they are either in a search and selection mode, or they are a competitor? If a potential customer is looking for your type of product, they will engage you directly. Where is the value to them to get Tweets from you every 20 minutes? The information they need to make their decisions is coming from a sales rep directly at a very different pace. Other information will be gathered online via search, from analysts or from references.

So, I have discussed Tweeting with both my Marketing and PR agencies and neither can provide a compelling reason to take the jump. It will be interesting to see how the medium evolves.

Nucleus Research misses the mark on Saas vs ASP

I have been an interested reader of the Nucleus Research's studies since they launched. For the most part their analysis is insightful and balanced but they really missed the mark in their "Hosted versus on-demand" study.

http://nucleusresearch.com/research/notes-and-reports/hosted-versus-on-demand/

If you have ready any of my other posts on Software as a Service (SaaS), you will realize that I consider SaaS to be a strong business model and a great deployment option, but I do not consider it to be the best model or the death of SW as we know it. It will be a delivery model, but not the only delivery model available. Yes, this runs contrary to a lot of pundits (like Nucleus Research), but let's face it - there are a variety of attributes that make a product successful in a SaaS model, while there are other attributes that would make it less successful. For example, highly integrate applications are not well suited to SaaS given volumes, latency, etc. On the other hand, services with additional value-add components like GSX / Celarix or Constant Contact are perfectly suited. Also, hell will freeze over before government entities and a lot of large organizations use SaaS as the only delivery model for their applications. There are just too many compliance, legal and security issues that they would have to overlook or ignore to make it feasible. For many organizations, economics is also not a good reason - the US Government and Fortune 100 companies each have significant enough data center expertise and economies of scale that very few, if any, SaaS providers can compare to.

Most importantly, just providing a solution in a "multi-tenant architecture" is not enough justification for a SaaS model. Multi-tenant architectures work well, that is how we deployed Celarix, but they also have downsides (which Nucleus forgot to mention). Everybody has to get upgraded at the same time, regardless of organizational change management impacts or interfacing issues. If the application is down or performing slowly, everybody is impacted. I have experienced these issues at Celarix (fortunately very seldom). At IQ, our applications are provided either on-site or on-demand (ASP / SaaS). Each customer gets their own virtual instance of their application run from a cluster of blade servers. The cost economics work well AND the customers can define their own backup, interfacing and security requirements. The choice of deployment option is up to our customers (which is where it should be).

At IQ we use a variety of SaaS solutions such as ADP, ConstantContact and GoToMeeting amongst others. Each of these solutions deliver financial value - I don't need to get servers, communication lines setup or IT resources involved. Each of these solutions also deliver unique business value (e.g. ConstantContact takes care of message delivery and SPAM compliance), but that doesn't mean all applications deliver additional benefit from a SaaS model. That I believe is the fundamental issue I have with Nucleus' report - software that delivers unique value as a SaaS solution should be delivered as one. Otherwise give the customer a choice.