Copyright Sales Instincts Ltd, 2008, for training purposes only Selling On Demand CRM Patrick Pando

Agenda Introduction, Background and Objectives Software as a Service (SaaS) Lets Pretend its not going to happen Managing your Sales cycle in an on-demand world Pain, qualification and positioning Making your USP and Value propositions count Objection Handling Real world tools Closing S + S deals Competitive review

Over 15,500 customers from small to enterprise Over 750,000 users in more than 80 countries Global network of software and services partners Fast. Flexible. Affordable Full CRM suite of marketing, sales, and service Native Office experience for rapid adoption Multi-language with more than 40 languages Microsoft Dynamics CRM: At a Glance Advanced SOA / Web services architecture Multi Tenancy Source: Gartner Magic Quadrant July 2008

At a glance on Steriods

Objectives for Session To get you excited and to teach you how to position and sell ON DEMAND CRM to your customers To leave you with tools and tips to win S + S business SaaS S+S

Are you On Demand ready? Is there a leader that owns success for your on- demand business? Can you make product decisions based on real- time customer feedback? Do you offer a free trial of your solution that converts to qualified leads? Are you truly selling a service or just a product? Do you have programs that drive continual adoption of your products? Do you have an industrialized sales process to discover new leads and clients? Can your CFO forecast renewal rates and what their impact will be to revenues? Do you have an API/mash-up strategy/Vertical strategy?

It was the best of time it was the worst of times Time Revenue Time Revenue On Demand Model Non- Liner Traditional Software Model Small upfront revenue Predictable: Recurring revenue RAPID ROI Large upfront revenue Volatile: Re-build every quarter Customer upgrades a challenge Running a On Demand Company Requires New Business Thinking

SaaS Now is the right time. Pervasive broadband access for SMBs and Consumers Economic models are in sync tight IT budgets are driving demand for more economically efficient solutions CIOs need to deliver strategic, mission-critical value, and will outsource other functions to allow a more strategic internal focus Improved security and acceptance of secure data centers by customers Greater Depth and Breadth of On Demand offerings, including greater alignment with customer needs (e.g. SMBs need lighter-weight applications than Large Enterprise) Emergence of Platforms for developing On Demand applications Windows SharePoint Services 3.0 Microsoft CRM 4.0 Why is Now the Right Time for SaaS?

Your in the right place! Whos the preferred vendor? Overall, Microsoft is the preferred On Demand vendor. However, in specific markets (France and China) other providers such as local telephone company are at parity with Microsoft. Base: Prefer On Demand Solution (986) Q21. Provided that the features and price of each hosted CRM solution were the same, which vendor would be your preferred vendor? 11

31% Growth 31% Growth (CAGR) for On-Demand CRM 61% Growth 61% Growth in Enterprise Adoption 25% Penetration 25% Penetration of $220 Billion Software Industry by 2011 $2 Billion 20042010 61% 25% The Right Time

The Right Tools

Others are growing! 38,100 Successful Customers 1,000,000 Subscribers >$700M revenue run rate* NYSE: CRM Founded 1999, HQ San Francisco 2400+ Employees; 40 Offices; 20 Countries 2001200820072006200520042003 2002 Fiscal Year 35,300 Customers Growth in Customers Q4 total revenue was ~$290M, representing growth of 34% y/y and 5% qtr/qtr Q4 subscription & support revenue was $266M, representing growth of 35% y/y and 5% qtr/qtr Q4 consulting and other revenue increased 15% y/y and 2% qtr/qtr. For the full fiscal year, total revenue was at ~$1.1B, representing a 44% increase y/y. This was the first year that SFDC exceeded $1B in annual revenue.

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On-Demand CRM a foreword Completely different to traditional methods Must be sold differently at all levels of a business Is a different cost model and mindset Will not suit all businesses People can be reluctant to trust online solutions Has to have its own sales messages and approach Has a shorter sales cycle. Watch your sales cost Once tried, very few people go back to on- premise

So lets pretend its not going to happen

Lets pretend its not going to happen How many of you have more than one computer at home/work? How many of you maintain your own software/database/files/backups? On your multiple computers how many of them are running exactly the same operating system, application, database etc? How much time do you waste per month on maintaining version control between different software? How many of you enjoy doing it!

If you sold software as a service Did you find it easier to sell? You wont have to do hardware, application, database sizing? Did your sales cycle accelerate? Did you get beaten up on price so much? Is the customer is generally more satisfied? Was it easy to do

A moment from our Sponsor Credit crunch is hitting hard Budgets are cut, priorities are changing Who can afford to spend 3x the cost Dont have capex, but have opex Its faster, more dependable and easier Customers want more value for money You need a dependable long term relationship and revenue stream You need an on-demand offering to remain competitive

Consider these objections when you are doing business?

Objections for On Premise vs. On Demand How big is the system required in order to run this? What are the compatible versions for the operating system/database/application do they all work together Number of servers, load bearing servers, data mirrored and virtual machines Who owns what? multiple vendors! How long is it going to take, who is going to do it and how much is it going to cost What happens when we get a new version Security Its not secure, anybody can hack in We dont outsource our data/We dont do hosted software I am tied in, what happens if I want to leave I cant integrate it with anything else You are too expensive compared to traditional models What happens when you go down Why isnt Microsoft doing this

Objections for On Premise vs. On Demand How big is the system required in order to run this? What are the compatible versions for the operating system/database/application do they all work together Number of servers, load bearing servers, data mirrored and virtual machines Who owns what? multiple vendors! How long is it going to take, who is going to do it and how much is it going to cost What happens when we get a new version Security Its not secure, anybody can hack in We dont outsource our data/We dont do hosted software I am tied in, what happens if I want to leave I cant integrate it with anything else You are too expensive compared to traditional models What happens when you go down Why isnt Microsoft doing this Technical Labour intensive Opportunity Specific Emotional Repeatable

Your on demand sales cycle In an on-demand world On Demand Clients DemoTrialsLeads

Sales Cycles On-premise Have you lost a deal because of the complexity How long does a traditional CRM sales cycle take 6 months? How much does it cost you to demonstrate a solution? How many people have to be involved? How many times have you been blocked by a technical decision maker? How many times have you been deferred because IT is too busy to respond? How difficult is it to differentiate yourselves during the sales cycle? How many times does it result in a no-decision or cancelled project? On Demand Solution Scooped you and got in first?

Traditional - Sales Cycle ProspectQualify Develop relationship SolutionProofCloseDeploy PainActive Pain Identify needs Determine requirements Evaluating Options NegotiationImplement Typical 4 6 Month sales cycle for traditional CRM projects Typical Customer Engagement Typical Sales Process

S + S Sales cycle PainSearch Identify needs Find/Try Assess /Self Asses Purchase Use Sales cycle PainActive Pain Identify needs Determine requirements Evaluating Options NegotiationImplement QualifyPresentPropose and Close Typical 1 - 3 Month sales cycle for S + S CRM projects CRM Trial

S + S Sales Cycles Qualification is much easier as there is less to think about! Should be focused on the immediate business issue Tends to be a tactical opportunity and short term business problem Stick with Business Decision maker ABC ABC ABC

Five Clicks to Close

Sales cycle - If you are running a trial Urgency contact in the first 24 hours Often the evaluator will be a user or sales operations person Test data if they dont put test data in then the chances of success diminish by 70% If only 2 logins are taken then chances of success will diminish by 70% Must be time-lined typically 15 30 days and only one extension of 7 days to make up their mind = must be used as a sales trigger!!

Trial http://www.microsoft.com/da/dk/default.aspx

The importance of a good trial A trial is a showcase for your company If it looks poor, you will look poor If its not interesting, they will take it as a reflection of your interest in their business Good trials will speedup your sales cycle A good trial is a puppy dog close People tell their friends 50% referral is not uncommon. If they are looking at competitive alternatives, it will show if your trial is not up to scratch very quickly

Servicing your business Template driven, repeatable approach Phased approach only small chunks, not big elephants Vanilla implementations with a twist Short punchy regular engagements, more phases Cost proven and ROI effective at all stages

Opportunity Process-Workflow Automation Make sure Opportunity Estimated Close Date is at least 45 days from creation of trial Below Applies to Partner Attach Pilot Opportunities only SSPs responsible for all other communications

A trial is 30 days

Sales through a string Need to make very clear value proposition with clear business at the begining to the engagement. It is not a technical sell if it can work in minutes it emotional. Your doing low touch by web and by phone.

Customer Pains you are looking for Failed CRM implementations or failed big system implementations Cost cutting and small budgets Credit Crunch we cant afford to do anything! Poor visibility of pipeline, customers, sales team effectiveness Client data in multiple locations or systems In-accurate reporting and poor forecasting

Questions to ask Get $$$$$ Are you looking to have a managed service? Are you worried about your data? What are you using to manage your customers? How would you like to extend your use of existing applications currently in use in your business? Where are you having difficulties in managing your customers and prospects? Does everyone in your organization know how to use email? Where are you having difficulties in managing your salespeople? Whats your timeframe and budget to put a solution in place? If I can show you how you business can see benefit this month do you have any objections?

Service is a Weget them to say we. IF MY SOLUTION CAN SAVE YOU X NEXT MONTH OR IF MY SOLUTION CAN SAVE YOU Y NEXT MONTH Does a proven solution that is easy to use for XXX per month/year make since to you. Why dont we give it a try?

Selling CRM on demand pre-sales Pre-sales work GET CUTOMER TO FOR WORK FOR YOU! Is generally just on smaller functional requirements rather than how the software works or coding Wont involve any database or operating system resource is purely focused on functional and perhaps an integration piece Highly configurable demos are a must paint a picture and tell the story. (40 minutes is enough!) Focus on the business issues, not how good the software is (is already assumed)

Rules for on-line demos Sell to the business.Sell to business people Make them interesting and tell a story Prepared with dummy data plenty of it not just 2 contacts/examples (ideally with their data if available) On web demos, make sure you can see it on another screen (see what they see) Dont bore people with the technical details or versions, no one cares

Lead with BI

& Dashboards

Qualification and Positioning a S + S Opportunity

Pricing/Positioning Dont boil the ocean!

Increase License and Service Revenue Average billing rate +20% Increased project profitability +15% Decrease Cost of Sales Cost per lead 30% Better qualification, effective targeted marketing Sales cycle 33% (on prem--from 9 months to 6 months) Reduced pre-sales effort (e.g. pre-built demos) Create a Sustainable Competitive Advantage Your IP + Gain additional software revenue Differentiate yourself from your competitors Strategic value of partnership Vertical Partner Benefits

How do you know it is an opportunity? Mergers/Demergers Takeovers Making money, losing money Internal re-organisations and terminations New competitors springing up or coming out New faces at customer sites and location Legislation and Sarbanes Oxley! IT cuts means loss of internal support You are talking to the person who will sign

Positioning Power of Choice You should qualify your customer on-demand or on- premise and offer the best choice Make a decision and bid only one otherwise its confusing Position a longer term engagement commitment over a period of time Talk about the things they have to do Check your network bandwidth Executive Sponsorship Invest in training dont skip Clean your data Talk about all the things you are going to do The rest of it, we will manage!

What Warning bells? Can we have a demo by Wednesday please We are about to make a decision,but havent considered you yet We have issued the RFI/RFP We are not sure what we want, but we think an RFI/RFP will tell us We have seen all the other vendors and we would now like to see you We never thought you were worthy of seeing in the first place We are thinking of doing something, but not sure what We dont know what we want, we are just window shopping We are thinking of doing something next year We dont have budget and it is not a priority We will be choosing our solution based on price Because, if it all goes wrong, we will be throwing away the least amount of money If you can match the discount.. We dont understand your value or why we should buy from you

Warning Bells 2 We like what you showed us, but We dont think its for our business - it doesnt fit We want a price for 10,000 but will only be buying 10 at first We have no budget and we want to minimise our risk to this, I have been reading in a magazine or I really like technology Closet Techie - I will never buy anything unless it is the most technically advanced widget on the market, today.. Our Business Consultants have told us. We are not in control of our project and dont know what we are doing, you should talk to them Do you have a job, I was thinking of leaving I have no interest in this project or your success in it How fast does it run on the obemajaflip thingy across our stringwan network. I dont understand the business problem and therefore the real issue here Time delays in the project - Something more important has come along

Overcoming Objections Security Its not secure, anybody can hack in Four levels of security - Application, network, user, data security We wont outsource our data/I dont do hosted software Whats the most important application in your business today I am tied in, what happens if I want to leave You have choices, you can do either or! I cant integrate it with anything else Its part of the MS family it already integrates You are too expensive compared to the other models System is never going to be changed? Never upgraded? What happens when you go down Tends to be ISPs Fire at customers, Internet caf. Why isnt Microsoft doing this We have a partner model that gives cutomers freedom of choice

Hooked They have clicked, they have tried, they see the value.

Music to our ears We are going to board with a proposal We can see the benefits of your proposal Who else uses this How do I upload data/ I would like more users Is there training available How quickly can you start the project or how quickly can you get consultants on-site Your costs look high

Positioning S +S - The loyalty factor Customer lifecycle is typically 3 years or more Discounts arent necessary. Service is the key. Longer commitment, 2-3 years contracts. Increased usage and increased users, because You are making it easier for them to buy! They can see what they are getting for their money They dont think of it like IT spend! Tends to be operational rather than capital budgets Small businesses cant afford anything else

Selling On demand CRM Sell Contracts for 2 - 3 year cycle Always Invoice at the beginning of the contract quarterly, Six monthly or yearly Collect the cash at the start of the contract Upgrade your customers and contracts extend, upgrade, increase users Some limitations to think about Smaller deal sizes Same effort to close Customers used to be more wary of on-demand than in- house (changing perceptions)

Avoid Offering to do both on-premise and on-demand If the customer has a 6 12 month sales cycle if its for 0000s of potential users its probably not on-demand. Getting into a debate between different CRM applications you are offering a solution not a functional shoot-out Giving discount not necessary at this time discuss contract lifecycle not individual user cost.

Five Clicks to Close : REMBER

Check list Pick your vertical Define and understand your USPs and value propositions Prepare and rehearse your S + S sales pitch Build your implementation templates Build the best trial/demos that you can Target your existing customers (easiest to win over) Lead with on-demand solutions (dont double bid) Prepare your call scripts/objection handling

Accelerating Ahead

Anatomy of a Enterprise Race Lost Race Sales Ops Director attends SFDC Networking Event Signs up for 30 day trial Meet with AE to determine business problems; find connections to CEO AE ride along with a sales person Agree on close and success plan Demo rehearsal Demonstration and positioning Setup reference calls Engage implementation partner Deliver ROI, Productivity, TCO Conduct corporate visit Negotiate and close SR follows up in 2 hours Meet with BDMs Customize Trial Success Plan SFDC Exec Call

Anatomy of a Enterprise Race Lost Race Sales Ops Director attends SFDC Networking Event Signs up for 30 day trial Meet with AE to determine business problems; find connections to CEO AE ride along with a sales person Agree on close and success plan Demo rehearsal Demonstration and positioning Setup reference calls Engage implementation partner Deliver ROI, Productivity, TCO Conduct corporate visit Negotiate and close SR follows up in 2 hours Meet with BDMs Customize Trial Success Plan SFDC Exec Call SF.C

Salesforce.com dashboard

Salesforce.com Beat the Hype Salesfarce Approach : Aggressive direct sales force Targets business users, circumvents IT Message of low upfront cost, upsells later Rampant mud-slinging Landmines: dashboards, reporting, stack, territory management Microsoft Positioning: Full suite CRM, not just SFA Bridge IT and user needs Not just simplicity, productivity Choice of deployment, hosting, payment options Vendor viability and longevity not an acquisition target

68 Things Not as Easy as SFDC Claims The real deployment story is it will take a fair amount of analysis, customization and integration to make the application fit each customers environment. That work must be managed (i.e. paid services) and additional training provided to use the system as intended. Even with their tools, customization/integration often requires programming skills and provides only basic data migration capabilities.

69 Who is in control, the customer or the vendor? Option of Taking Hosted Offering In-House SFDC: No program or option to bring SFDC implementation in-house What happens if your company gets acquired and you need to bring it in-house What happens if new regulatory rules/law mandate you have data in-house Dynamics: With Microsoft, you can bring it in-house anytime Risk Mitigation SFDC: SFDC only gives you the data if they are acquired or go out of business But you dont get the software, source code or in-house knowledge If customer outgrows hosted service, SFDC only provides a flat file data dump Dynamics: Can bring it in-house, additionally Microsoft has strong Escrow Code policy Upgrades SFDC: Force you to upgrade multiple times a year Cant choose timing, company may not be ready for upgrade, additional training Customizations may be difficult to upgrade Dynamics: With on-premise version, you upgrade when you are ready to

One Salesforce.com Customer's Experience: Choice, Lock-in, Escalating Costs Turns out, that was now a new feature we had to add to our contract for $100.00 per employee! per month Each new release was more money if we wanted the functionality. We knew their game, and we wanted out. Our entire business was in their web portal, and we needed to get it out. Except, we couldnt. - Public statement by Brandon Werner, brandonwerner.com

Pricing and Packaging Considerations 5070 per Seat/Month 50100 per Seat/Month 100125 per Seat/Month Hosted CRM with moderate Customization 1 0 25 Seats Hosted CRM with vertical Customization and Backend Integration 550 Seats Hosted CRM with Customization and Integration to Backend Systems 10 05 00 Seats End Customer Pricing Study Competition Salesforce.com: 75 Enterprise Edition + Fees for Add-on Features RightNow: 65 for Enterprise Edition + Fees for Add-on Features

Telemarketing Scripts Proposal Templates ROI Sales Tools Rapid Configuration Tools SureStep Communities and Blogs Support Retention Partner Resources and Tools Comprehensive tools to support you throughout the customer lifecycle Fact Sheets White Papers Demos and Trials Competitive Tools Consideration Customer Presentations Product Brochures Fact Sheets Events PR Awareness Purchase, Deployment

Are you On Demand ready? Is there a leader that owns success for your on- demand business? Can you make product decisions based on real- time customer feedback? Do you offer a free trial of your solution that converts to qualified leads? Are you truly selling a service or just a product? Do you have programs that drive continual adoption of your products? Do you have an industrialized sales process to discover new leads and clients? Can your CFO forecast renewal rates and what their impact will be to revenues? Do you have an API/mash-up strategy/Vertical strategy?

Documents

Copyright Sales Instincts Ltd, 2008, for training purposes only Selling On Demand CRM Patrick Pando