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Selling and Marketing As-a-Service Products
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Lilia Shirman, Managing Director, The Shirman Group
Value StoriesAudiencesIndustriesSolutions
Integrated MarketingChannel Enablement
Alliances
Content Structure
People
DEVELOP ACTIONABLE
STRATEGY
PLAN & EXECUTEGO-TO-MARKET
CREATE CUSTOMER RELEVANCE
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© 2012 The Shirman Group, Inc. All rights Reserved
In 2015 24% of all new business software purchases
will be of service-enabled software - IDC
Today
• Is it a Product or a Service?• How can Marketing impact as-a-Service
metrics?
Product
Delivery Mechanism
© 2009 The Shirman Group, Inc. All rights Reserved
You want some of THIS?
What market are you in?
What is your value?
Which audiences care?
What proof do you have?
You still need to decide
Product or Service?
Products Services Products as Services
Buy Process Evaluation Interaction Experience
Marketing Role
•Messaging•Brand awareness•Lead generation
•Relationship development
•Thought leadership•Referrals
•Scalable relationships•Usage insights•Offers•Word of mouth catalyst
Sales Process Linear Circular Continuous
© 2012 The Shirman Group, Inc. All rights Reserved
Products Services Products as Services Release Cadence Months or years Real-time Weeks or Days
Role of Consulting
• Planning• Deployment• Customization• Integration
Value delivery • Value design• Managed services• Proactive usage guidance • Drive adoption &
consumption• React to problems
Role of Support React to problems n/a
Education•Product
administration•Product usage•Development
Knowledge transferValue delivery
•Product administration•Product usage• Optimizing value
© 2012 The Shirman Group, Inc. All rights Reserved
Product or Service?
Product or Service?
• Scalability• Repeatability• High Transaction Volume• Whole Experience• Loyalty• Adoption & Consumption
As-a-ServiceSuccess Factors
© 2012 The Shirman Group, Inc. All rights Reserved
How Can Marketing ImpactKey as-a-Service Metrics?
Conversion RateCustomer Acquisition Cost (CAC)Average Recurring Revenue (ARR)Churn RateLifetime Value (LTV)
Images from Forbes article by David Skok and from Chaotic Flow blog by Joel York
• Be easy to find• Send daily usage
suggestions and tips• Contact trial users• Focus on prospects who
are actively evaluating• Provide reason or means
to engage multiple users in a trial
First Experience First Sale
Increasing Conversion Rate
Free trial users still active on day 3 were 4X more likely to convert
Active trial users contacted by sales 70% more likely to buy
Evaluators who had 3 users joint account in 1st 3 days were 12x more likely to convert
Source: Totango
Keeping CAC Low• Can you avoid high-
touch selling?• Can your product sell
itself?• How many points of
entry are there?• Can your partners’
products sell yours?• Is your product
inescapably viral?
First Experience First Sale
Field Sales
Inside Sales
Internet Channel
$1.00 $0.90
$0.45
$0.75
Median CAC
Source: Pacific Crest SaaS Survey 2011
Increasing Recurring Revenue
First Experience First Sale
Increase Adoption(Number of users)
Increase Consumption(Variety of services)
Increase Usage(Activity volume)
$0.93
$0.28$0.16
CAC by Sale Type
Source: Pacific Crest SaaS Survey 2011
Median Churn Rate*
5%
Decreasing Churn• Pre-sale readiness
evaluation • Business process / usage
analysis & guidance• Customer Success Officer
– assist with adoption and value
• Proactive support for infrequent users
• Simple pricing and billing• Opportunity for feature
requests and input
Source: Totango
Most cancellations were preceded by a period of non-use
*Source: Pacific Crest SaaS Survey 2011
Increasing LTV MoreAnalytics-based Best Practice Consulting
Insight / Data Mining
Usage Intelligence & Process Enhancement
Private Labeling
Premium Infrastructure(Security, SLAs, Dedicated )
Advertising / Affiliate Sales
First Experience First Sale
Increase Adoption(Number of users)
Increase Consumption(Variety of services)
Increase Usage(Activity volume)
Architect product with long-term revenue possibilities in mind
Resources• Consumption Economics by J.B. Wood • ForEntrepreneurs.com blog – David Skok• Chaotic-Flow.com blog - Joel York
– Guide to SaaS Metrics
Web: www.ShirmanGroup.com
Email: [email protected]
Blog: www.RevenueOrchard.com
Twitter: B2BGuru
Available on Amazon.com or at http://42rules.com/book/42-rules-for-growing-enterprise-revenue/
MarketingCamp Discount: ADD12
