Salessoft - Sales Automation

Objective

The main objective of Salesoft is to become a market leader in providing high-end solutions to Sales Automation (SA) software industry by marketing its core product PROCEED. It is under tremendous pressure to increase revenues quickly to show performance and raise further venture capital for which it has an option to launch Trojan Horse (TH) which is a low end product for SA software solutions. Caution has to be taken to prevent cannibalization of PROCEED sales if TH is launched. Salesoft also has to nurture its relationship with SA consultants who are critical to the sales of PROCEED.

Analysis

SA market was estimated to be around $1 billion dollars and expected to grow at rate of 40% annually for the next five years. US market alone constitutes about 9.2 million salespersons. This growth in SA market is mainly attributed to drop in prices of computers with enhanced features, introduction of user-friendly OS like Windows, groupware like Lotus’ Notes and advances in communication technology. Currently, Salesoft is developing PROCEED, which will essentially be the high end solution for enterprises with complex sales cycles. PROCEED received positive response from prospects but has only 5 actual customers so far. These customers expect PROCEED to complete the development of the remaining modules which is critical to reputation of Salesoft. Salesoft also has an option to spend an additional $200K to improve the modules of PROCEED’s Sales system to design a stand along low-end product called Trojan Horse (TH) which will help gain new customers who are looking for less complex solutions for their Sales Automation needs. See Exhibit 4 for comparison between PROCEED and TH.

Many big players like Gartner Group, Sales Technologies and Brock Control Systems, which are slowly moving from mainframes to client/server based systems, lack integrated solutions which automate the complete sales cycle from end-to-end. The development of a Comprehensive Sales Automation System (CSAS) is a very time-consuming process. Also, making an actual sale involves a lot of effort from the salesforce and collaboration with SA consultants to educate the customer and customize the product according to their needs. See Exhibit 1 for detailed SWOT analysis.

For the enterprises with complex SA needs, Salesoft offers Comprehensive Sales Automation System solutions, with broader range of customization options, which unlike competition can automate entire marketing, sales and customer service operations to increase revenue by reducing sales cycle time and start-up time for a new sales representative.

One of the main strengths of Salesoft is that it provides integrated solutions to its customers which are of greater value where there is greater variance and uncertainty in the sales order cycle. PROCEED addressed many concerns of the customers through customization