SaaS Solutions – Are You Marketing for Leads or Sales?

Traditionally, Business Software vendor marketing has primarily focused on generating leads for sales to follow-up and engage with prospects.  This was predicated on the complexity and duration of the sales, delivery, deployment and implementation processes for traditional On-premises solutions.

Software as a Service (SaaS) radically changes the delivery, deployment and implementation processes for business solutions.  This creates opportunities to rethink the sales and marketing approach and processes for the SaaS solution model.

Business software vendors that started life in the SaaS world, primarily focus their marketing campaign strategies, materials and website on:

• Demonstrating the real product online, on-demand
• Offering a free trial to sign-up online right now to use the full product for a limited time period and subsequently convert to a paying customer
• Pricing and other specific information about subscribing to the solution
• Providing relevant information for prospective buyers in their context with multimedia materials
• Engaging with their audience using online marketing and sales methods to expediently make the sale online with or without salesperson involvement
• Alternatively, collecting contact information for generating leads for subsequent follow-up by a salesperson.

The intent for new generation SaaS vendor marketing is to firstly attempt to make the sale or part of it online and secondly to capture contact information for the lead generation process.

In contrast, On-premises business software vendors that also offer SaaS versions of their solutions, seem to be continuing their traditional marketing approach:

• Providing general information about products, solutions, industry applicability, etc.
• Focus on harvesting contact information for their lead generation process at every opportunity such as registration to read a whitepaper, view a video clip, etc.
  
• Limited or no information about subscription costs and terms
• Creating the need for a prospective buyer to provide their contact details to get additional information and details they need for a buying decision.

Even though SaaS creates new opportunities to reorient marketing to actually sell solutions or initiate the sales process online, most traditional On-premises vendors that offer SaaS versions of their products are still primarily focused on generating leads for SaaS solutions like they have done for On-premises solutions in the past.

Some SaaS solutions such as CRM, Expense Management, eCommerce, etc. have a proven track record of selling online in a customer self-service mode with little or no live salesperson assistance.  Prospective buyers may not be ready to buy all SaaS solutions, especially more complex or higher value solutions, in an online self-service mode.  However, there are proven methods for opportunities to redirect the focus from marketing for leads to marketing for sales.

“I am the world's worst salesman, therefore, I must make it easy for people to buy.” ~ F. W. Woolworth

The ultimate objective is to make a sale – SaaS provides the opportunity to directly market for the sale, rather than market for leads for the sales process.

Have you shifted or considered shifting your marketing focus from leads to sales and what have you experienced?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Marketing & Selling the Service Differentiation in SaaS Solutions

My previous post ‘Are there Differences for Marketing SaaS versus On-Premises Solutions?’ proffered that customers need to make 2 buying decisions with the increasing availability of mainstream SaaS alternatives to traditional On-premises solutions:

1. Which solution best fits their business needs
2. Which acquisition / deployment option best fits their IT strategy.

The second buying decision means that prospective buyers will want information and comparisons to help them make the best decision for their business.  This creates a need and opportunity for marketing and sales to establish additional differentiation for their solution based on the Service aspect of Software as a Service.  It may help to consider the following three questions more broadly to develop your Service differentiation for marketing and selling your SaaS solution:

Who are you competing against?
In the first buying decision of solution fit you are primarily competing against other vendor solutions.  In the second buying decision of acquisition / deployment options you are competing on multiple fronts such as:

• Other vendors on service costs, terms and delivery
• Other vendors on the delivery platform – is it just a SaaS solution or are there Platform as a Service (PaaS) and/or Infrastructure as a Service (IaaS) cloud computing differentiators?
• Customer’s internal IT organization’s perspective on SaaS solutions
• Other vendors and customer’s internal IT on service delivery – Service Level Agreement (SLA), operational controls, security, SAS 70 compliance certification and whether it’s Type I or II, etc.
• Financial – operational expenditure versus capital expenditure considerations
• Total Cost of Ownership – there’s a lot of spin from both On-premises and SaaS marketing and sales pitches about which model costs more over three, five or more years
• Inertia – some buyers and/or companies may be reluctant or even resistant to having their business systems run in a data center they don’t control.

Considering all the possible competitive points will help formulate your best competitive differentiation.

What are customers buying?
Although a customer needs to make 2 decisions during the buying cycle, once they decide on going with a SaaS solution, they are buying one inseparable solution comprising of the application functionality, acquisition method, services, deployment, provisioning and other elements to make it work.  In a previous post I suggested a bifurcated marketing approach to attack the market from two positions to find prospective buyers on either decision track.  However, the overall marketing and selling strategy should be on the goodness of the complete SaaS solution, because that’s what customers are buying.

What are you really selling?
The bottom line is that you’re selling trust – that the customer trusts your company, product and the representative people they’ve dealt with to provide the solution to satisfy their core buying motivations of solving business problems, developing new opportunities, improving performance, increasing profitability, etc.  This isn’t different for SaaS versus On-premises solutions, but SaaS adds another major dimension of trust in the Service aspect.  With the continuing commoditization of business software and minimal functional differentiation between products in the same category, Service is the operative word for differentiation of Software as a Service solutions.  Marketing and selling the Service differentiation will attract and engage prospective buyers, and trust in your company’s ability to deliver the Service will make the sale.

Do you have additional suggestions and ideas for marketing and selling the Service differentiation in SaaS solutions?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Are there Differences for Marketing SaaS versus On-Premises Solutions?

From a customer perspective Software as a Service (SaaS) and On-premises business software solutions have the same objectives of creating business value by providing applications and functionality for improving business processes and performance.  The customer buying motivations are the same – solve business problems, develop new opportunities, improve performance, increase profitability, etc.

Marketing SaaS and On-premises business software solutions have the same objectives of developing a credible market presence, creating awareness, generating leads and enabling sales to efficiently sign up new customers.  The marketing tactics are the same – using a familiar mix of webinars, events, collateral, PR, SEO, web content, analyst reviews, email marketing, videos, social media, etc.

When SaaS solutions first emerged as viable alternatives to the traditional On-premises approach, the marketing focus was primarily on the different acquisition and deployment characteristics of SaaS.  More recently the marketing focus for SaaS solutions has shifted to the application functionality and business value for customers as more SaaS and On-premises vendors compete for the same customers in target markets.

So what’s different?  The real difference is that customers now need to make 2 buying decisions:

1. Which solution best fits their business needs
2. Which acquisition / deployment option best fits their IT strategy.

Customers can take two different paths to making the buying the decision:

1. First develop a short list of best fit solutions and then decide on available acquisition / deployment choices as part of the final decision process.  While SaaS versus On-premises may not be the initial primary decision driver, it could be a key final decision factor.
2. First decide which acquisition / deployment option they want and then find the best fit solution that meets the selected acquisition / deployment criteria.  SaaS versus On-premises is the initial primary driver, but functional fit between qualifying solutions will be the final decision factor.

This has implications for marketing both SaaS and On-premises solutions for positioning and differentiating according to each decision choice and path in the customer buying process.  It also has implications for sales to determine how to engage with prospective buyers depending on which decision path they are following.

Given that customers need to make 2 buying decisions and usually take two different paths to reach a decision, business software vendors may want to consider a bifurcated marketing strategy for positioning and differentiation:

1. Traditional functional fit solution marketing approach emphasizing business benefits and applicability of the solution functional capabilities.
2. Acquisition and deployment marketing emphasizing the business and IT benefits of each available acquisition / deployment option.

“If you're attacking your market from multiple positions and your competition isn't, you have all the advantage and it will show up in your increased success and income." – Jay Abraham

I’ll explore the differentiating and positioning possibilities in future blog articles.

Have you faced this situation and how are you approaching it?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Is that Cloud Computing or is it SaaS?

No question that Software as a Service (SaaS) and Cloud Computing are hot topics and major trends in the business solutions market.  SaaS vendors and solutions continue to grow new customer subscriptions and revenues while traditional on-premises vendors and solutions experience declining new customer license revenues.

But vendors are causing confusion for prospective buyers by referring to SaaS and Cloud Computing interchangeably in their marketing materials.  As with most new technologies, prospective buyers largely depend on the vendors to provide information and educational content as part of their marketing outreach.  We’re at the early stages of a major long-term trend on how business solutions and computing capabilities are delivered to customers.  Using standard and consistent terminology and definitions avoids customer confusion and disinterest in what may appear to be more tech jargon.

While most of the terminology is established, the definition or interpretation of the terminology is still inconsistent and a source of confusion for prospective buyers.  In the interest of resolving this situation, I hope to instigate a broader discussion by proffering the following definitions and interpretations of the common, currently used terminology:

Software as a Service (SaaS) – customers subscribe to the use of a functional solution as an on-demand service delivered by the vendor or authorized partner in a multi-tenant deployment online environment.
Cloud Computing – provides customers with a complete, secure, private and scalable on-demand computing environment from a utility-computing provider on a subscription basis.

The important and confusing distinction is that while a SaaS vendor may use cloud computing to deliver a CRM solution for example, the SaaS customer is only subscribing to the CRM application service.  If they do not have access to the underlying cloud computing environment for other purposes, it should be referenced as SaaS, not cloud computing.

On the other hand, a cloud computing customer subscribes to a computing environment for all their computing needs and deployment of multiple solutions as an alternative to their own data center.  The solutions could be sourced from multiple vendors and/or self-developed.  They may choose to deploy one or more SaaS solutions in their private cloud computing environment.

This leads to more terminology and definitions to more fully describe all the available possibilities.  The cloud computing environment is currently comprised of three layers of services:

• Infrastructure as a Service (IaaS) – this is the computing foundation and infrastructure for cloud computing consisting of the computing services, storage, networking, security, backup, recovery, operations management and other requisite capabilities.
• Platform as a Service (PaaS) – this is all the application enabling technologies for developing, deploying and servicing functional SaaS solutions in a cloud computing environment.  PaaS also enables customers and authorized partners to develop and deploy their own applications using the tools and services provided by the PaaS vendor.  PaaS runs on the underlying IaaS.
• Software as a Service (SaaS) – these are specific functional applications such as CRM, Expense Management, HR Benefit Management, etc. licensed and delivered by solution vendors in an on-demand online or cloud computing environment.  SaaS runs on the underlying PaaS and IaaS.

Hopefully this article will help prompt a larger discussion for industry analysts and vendors to agree on standard and consistent definitions and interpretations of the terminology for evolving SaaS and Cloud Computing technologies.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Why Many Businesses Still Fear Social Media

Social media has come a long way over the past couple of years.  Some businesses have successfully embraced social media for marketing, growth, new opportunities and interactive engagement with customers and buyers.  But a number of studies published in recent months indicate that many businesses still have fears and concerns about widespread use of social media as shown by this sampling of findings from various studies:

• Research from Russell Herder / Ethos Business Law:
• 51% of senior management, marketing and human resources executives fear social media could negatively impact employee productivity
• 49% of this group claim that social media could damage company reputation
• 40% of companies surveyed block online access to social media for any purpose.
• Results from a poll of system administrators by IT security and control firm Sophos:
• 63% worry that workers share too much information on social networking websites
• 66% are concerned that employee social networking could endanger company security
• Approximately 50% block or restrict access to social networking sites
• Productivity, data leakage and malware are primary reasons for blocking or controlling access.
• A study commissioned by Robert Half Technology:
• 54% of U.S. companies ban workers from using social networking sites
• Only 10% of 1,400 CIOs interviewed said that their companies allow employees full access to social networks during work hours.
• A global survey by Avenade and Coleman Parkes Research identified key barriers to adoption of social media technologies as:
• 76% are concerned about security
• Senior management apathy at 57% of companies
• 58% fear using unproven technologies
• 50% fear a negative impact on productivity.
• A Nucleus Research survey revealed:
• Employee productivity drops 1.5% at companies that allow full access to Facebook in the workplace
• 87% of those who use Facebook at work had no clear business reason for doing it.

In spite of these fears and concerns, many business executives do understand the potential value of social media.  For example, in the same Russell Herder / Ethos Business Law research, senior management, marketing and human resources executives perceive the following potential value of social media for their businesses:

• 81% believe social media can enhance relationships with customers
• 81% see social media value for building a company’s brand
• 69% think it’s a viable recruitment tool
• 64% think it can be a customer service tool
• 46% believe that social media can enhance employee morale.

This is an interesting dilemma for marketers.  Most of us know and understand the huge potential of social media and social networking for marketing.  Many of us have successfully used social media and social networking for marketing activities and plan to do more.  If everyone in a company has some role or contribution to marketing and sales as they should, then how do we deal with these fears, concerns and apathy that will impede progress for making social media and social networking an integral part of a business?

Something else to consider is the impact of these fears, concerns and apathy at customer or prospective buyer companies.  If over half of companies are blocking or restricting access to social media, it means the social media-based marketing programs won’t reach at least half of the intended target audience.  Good reason to continue using traditional marketing channels as the social media channel matures and hopefully overcomes the current fears, concerns and apathy.

Have you faced these issues in your marketing work and how have you handled it?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Marketing Budgets Depend on Measurability

Last week’s article about Are Marketing Budget Cuts Here to Stay? prompted interesting discussions about the role of measurability for supporting marketing budget proposals.  In the current scenario of declining or flat marketing budgets, measurability is a key factor that determines what is funded and what gets cut.

In recent years, marketing organizations have greatly improved capabilities to gather data, do analysis and produce meaningful metrics about most marketing tactics and activities.  This is all good – executives and other functional areas of a company now have a measureable view of marketing’s contribution to the business. Marketing has more insights into the effectiveness of what they’re doing and tracking their activities and results as never before.

Given the constrained business conditions and expanded availability of marketing metrics, it’s no surprise that executives are insisting on more measurable supporting data to determine what and how much of marketing budgets receive funding.  While this may seem like a reasonable approach on first impression, there are some concerns that marketers should consider to ensure that the right mix of marketing plans are approved in their budgets:

• Inbound marketing channels such as websites, search engines, blogs, social media, videos, etc. are online and have built-in data gathering capabilities to produce a vast array of metrics.
• Various research studies and anecdotal information from various marketers indicate a substantial shift of marketing budget allocations to inbound marketing from traditional outbound marketing channels.
• While there is substantial proof that inbound marketing works, is it possible that some of the budget shift is influenced by it being so easily measurable and therefore more quantifiable for budget discussions with executives?
• It’s generally more difficult to get meaningful metrics with direct correlation to outcomes from outbound marketing channels.
• For many B2B and IT companies, outbound marketing channels such as trade shows, conferences, live seminars, etc. used to be the staple marketing tactic to find buyers and engage with customers.  These are the areas that are being cut the most in marketing budgets.
• Although attendance at these type of live events have declined, are we possibly cutting back more than we should because we don’t have good supporting metrics?
• I have talked with many salespeople who lament the continuing trend of decreased participation in these live outbound marketing events.  For many B2B and IT salespeople, meeting people face-to-face and speaking with them at these type of events is still the best way to find qualified prospects.
• Although some metrics such as response rates, unique website visitors, clickthrough rates and others are easy to get and meaningful within a specific performance context, are they really meaningful for determining budget allocations?
• Many marketing metrics are primarily about measuring activities.  But business results are what really count in the end.  Are the metrics for supporting marketing budgets based on funding activities or producing results?
• What about funding for longer-term strategic marketing such as positioning, branding, developing market presence and credibility in target segments, engaging with influencers, etc.  These are vital for producing business results, but tough to measure and maybe more difficult to justify in constrained marketing budgets.

Are you seeing an increasing requirement and importance placed on metrics to get budget allocations and approvals?  How are you dealing with some of the concerns raised above?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Are Marketing Budget Cuts Here to Stay?

Talking with a number of marketers and business executives over that past several weeks indicates a common theme of continuing marketing budget cuts.  Many marketers are now facing a second or third round of budget cuts after widespread marketing budget reductions late 2008 / early 2009.  The optimistic outlook for many marketers is to hopefully retain current budget levels into 2010.

Research from various sources substantiates this anecdotal information:

• Marketing budgets were cut over 20% on average in 2009 versus pre-recessionary levels in 2007/2008.
• The number of companies that cut marketing budgets in 2009 is 25% higher than predicted in January 2009.
• In one survey less than 20% of companies are expecting marketing budget increases while over 40% are expecting further reductions in 2010.

In spite of these substantial and what now appear to be sustained marketing budget reductions, companies are still expecting marketers to deliver results and performance at levels similar to those prior to the cuts.  Marketers have generally responded positively to this challenge for accomplishing the same or more with less.  The following are some of the common approaches to this challenge:

• Restrictions and reductions for expenses such as travel, agency fees, contractors and other external costs.
• Staff reductions, organizational rationalization and other internal cost reductions.
• Eliminating or delaying new projects and/or campaigns.  While this is a good short-term deferral tactic, it does raise concern whether further delay of these projects/campaigns will eventually impact business performance and results.
• Reducing spend and attention on less effective outbound marketing channels such as print advertising, direct mail, tradeshows, etc.
• Increased focus on more effective and less costly inbound marketing channels such as websites, search engines, blogs, social media, videos, etc.
• In a fortunate confluence of circumstances and timing, inbound marketing is proving to be the primary means for marketers to produce good results with lower budgets.

Although overall marketing budgets are expected to decrease in 2010, the Forrester US Interactive Marketing Forecast predicts that social media, email, search and mobile marketing spend will grow significantly in 2010 and subsequent years while outbound marketing spend will decrease even further.

Marketers have cut expenses and refocused attention in response to budget cuts and mostly achieved performance goals and expectations during 2009.  The question is whether this performance can be sustained in 2010 with flat or further reduced budgets.

What are your marketing plans for 2010?  Do you expect your budget to remain flat, increase or decrease?  Are you going to shift more budget and attention to inbound marketing channels to meet your goals?  Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com