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SaaS in the Enterprise and the need for a modern sales organization
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Now Available on Amazon
http://www.WinningByDesign.com
find out more on
Matrix Partners preso!
http://www.amazon.com/Blueprints-Sales-Organization-Jacco-vanderKooij/dp/0578161362
Selling
Harvard Business Review
SaaS causes a drop in revenues
SaaS
How to lower the cost of enterprise sales?
to Enterprises
For sales leaders who have to move from a SW license model to a SaaS model.
Perpetual SW License
Monthly SaaS Revenues
>70%
Due to rev-rec policies only the Annual Contract Value (ACV) in the 1st year can be recognized. Most SaaS contracts have an exit clause after 12 months, rendering Total Contract Value (TCV) worthless.
Using Traditional Sales Methods
@IndoJacco
B2B Deals have a High Client Acquisition Cost
JIVE
CAC
Case Study:
And with success
10x
Matrix Partners
2011
More deals
To the attention of David Skok
Selling SaaS in the Enterprise
Rene Birthday
$77,285k
REVENUE
Revenue
guess
what?
COST
($44,794k)
At an OpEx M&S
77
Campbell, CA
New Deals ('11)
David,
($50,804)
What
Overall Result
Step Four
Thank You for the inspiration
Rewire your brain to not fight the cloud but to use it!
Step Three
Remove Sales Funnel
SEO
Jacco
peer
reference
social media
Sales Superstar
Change the
Step Two
way
Build Around the Buyers Journey?
Why
How
we sell!
Step One
Traditional Funnel is build around outdated selling process based on activity
Traditional Enterprise Sales
How
In the Enterprise
2010
2011
Diff
Revenues
$46M
$65M
Baseball Lessons
$19M
?
Jive
Clients
560
676
77
Spend on M&S
$29M
$45M
$16M
There is an epidemic failure within the game to understand what is really happening...
Year 1 cost of sales!
85%
...and this leads people who run teams to mis-manage their players.
http://www.futureofsalesisnow.com
What I see ... is an imperfect understanding where runs come from...
Case Study
baseball thinking is medieval ... we are asking all the wrong questions!
BCOV
Understanding the Problem
Quarterly
Traditional SaaS Model
Revenue
$18,836k
a) Acquire clients @ high cost
At a M&S OpEx
($9,008k)
382
New Deals ('11)
What to do?
b) sustain losses for n-years
Result
($4,319)
Understanding The Challenge
c) Recoup as you pivot business
HOSTED (SAAS) SW LICENSE
PERPETUAL SW LICENSE MODEL
VS
Revenue of a 25,000 SaaS license
Annual M&S
SW License +
1st year M&S
Perpetual
Gap is too big to close with traditional SaaS sales.
Profits on a 25,000 software license
Risk with SaaS is way higher
SaaS
Year 3
Year 2
Year 1
We focus traditional enterprise sales here
The bigger the losses
Expanding with SaaS Model
Year four
Year three
Year two
Year one
Result
Losses are sustained at bigger volume of clients
Recognize Need
Deploys it
Customer Success
Is successful
But future revenues are not guaranteed, you need to earn it and invest even further.
JIVE, BCOV show challenges with this model in Enterprise sales
transposed on a traditional 'funnel' view
SalesOps
LET"S GOOGLE IT!
Is this the only way?
Is successful
Traditional sales approach results in Enterprise buyers requiring a similar effort to earn a significant smaller
revenue. So SaaS says for you to build a business model based on future returns.
Question
Is this just a scaling problem? Does it become profitable when achieving a larger scale
Buys it
Leads
Leads
Inside Sales
Build Awareness
Marketing
Tools
Leverage Social Media
Content
Make it Engaging & Fresh
Methodology
Trust, Provoke & Consult
Skills
Organization
Expert in Engaging, Story Telling & Online Selling
Hire, Train, Compensate and
organize in a flat Structure
Help me!
d
e
s
m
e
S
a
_ _ _ _ _ _ _ _ _ _
Thus you invest to make every interaction with your client [+], such as bringing on success managers creating a significant increase in cost in Y2 and Y3.
Evaluate Options
Large Scale!
4,679
clients
How to manage B2B sales facing an exponential CAC.
The more you sell..
Recognizes need
Revenues
Contracts
Opportunities
Field Sales Team
Traditionally we lower CAC using inside sales and/or channels
B2B Sales has a very High CAC
Year six
Year five
Customer Success
... the more you spend on M&S
While success takes place here
Deploys
ii) Minus Marketing & Sales cost, that have a direct relationship to the revenue both in amount & time.
Evaluat Options
Finds out
about it
- browsing the internet
- passionate people (TED)
- trusted advisors
- sales superstars
iii) Allowing sales to build a model that shows profits at the time the investments are made.
Don't forget to call your Mom!
i) First year revenue as a result of an enterprise wide licenses commitment.
Buys it
sales
Customer Success