Friday, December 5, 2008

Exactly not the way it was

I was speaking with a CEO yesterday about his perspective on the sales environment in his SaaS company today vs prior stressed economic environments. When he said 'today, it's exactly like selling software to the enterprise, but without the enterprise', it caught my attention.

While he mentioned elongated sales cycles, due to expense caution, as evidenced by contracts 'caught in legal' before PO's are issued, he also highlighted the fundamental difference in implementation of his SaaS service offering due to:

Zero customization and minimal integration and, little or no end-user training that substantially reduces the time to revenue/cash; while enabling him to much more effectively match expenses with cash.

When I thought he was done expressing himself, he then concentrated his thoughts around the capital efficiency promulgated during the firm's early adolescent stage that's now especially vivid in this down market where the real-time matching of sales and marketing expenses (SEO, PPM, CPA etc) limits the 'spend and pray' budgets where, paraphrasing John Wanamaker's view of bygone days where "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

The consequences for this CEO is that he's more confident with spending more (or reducing less) than in previous downturns, because he has more instantaneous access to the knobs and levers to shift/reduce expenses when returns under perform expectations.

No comments:

Post a Comment