SaleSoft, Inc. (A)
SaleSoft was founded in July 1993 with the objective of marketing PROCEED, a Comprehensive Sales Automation System (CSAS). Despite the fact that there was a good level of enthusiasm amongst the prospective buyers, the high level of supply time was a drawback with a meagre five such systems being sold till date. Thus converting the interest to sales was a real problem. Now, to seek additional funding from the Venture Capitalists for future developments, the company was under dire pressure to show performance and is in a dilemma whether or not to introduce a new product christened Trojan Horse (TH). This product can be developed, with some work, using the existing modules of PROCEED's Sales System that are already available. Trojan Horse (TH) could potentially distract SaleSoft from its primary objective of becoming a leader in the high end of the Sales Automation (SA) software industry. There is also a risk that it might cannibalize sales from the PROCEED product. TH can potentially prevent SaleSoft from forming relationships with consultants whose support is critical to the success of PROCEED. But, TH might offer an easier alternative for SaleSoft to get new customers, gain quick sales, and generate the much needed revenues. The situation is further complicated by the fact that current PROCEED customers are expecting SaleSoft to deliver the complete PROCEED solution as soon as possible. The company has delivered only 3 modules out of a total of 8, and developing the remaining five would cost them about $1mn and a would take a time of approximately 8 months. UNDERSTANDING THE BUYING CYCLE OF PROCEED:
PROCEED falls under the category of Comprehensive Sales Automation Systems (CSAS). There following steps are involved in the customer buying cycle: 1) Realization by senior management that CSAS might solve some of the existing sales, marketing and service problems. 2) Evaluating the potential to automate existing processes and to specify the order of functions to be automated. Sales Automation (SA) Consultants were generally approached for help regarding the same. This step took about 2-3 months for completion. 3) Customers decided how different functions to be automated were related and determined how data was to be collected, stored and analysed. This step was also done with the help of SA Consultants and usually took about 3-4 months. 4) Customer decided the type of hardware and software to be purchased, based on inputs from SA Consultant. Short listing and selection of vendors was done, which took about 6-8 months. 5) Pilot tests conducted after customizing the CSAS to meet the customer’s specifications. This usually took about 3-5 months. 6) To modify the CSAS software in response to feedback from the pilot test, this took 3-4 months. 7) Full scale roll-out took another 4-6 months.
The completion of the entire cycle takes somewhere between 39 and 55 months. PEOPLE INVOLVED IN THE BUYING PROCESS:
The people involved in the buying process include:
1. Senior Management:
The senior management, including CEO, CFO and other relevant positions (such as President or Vice-President Sales, Marketing and Service) would occupy the most important role in Problem Recognition. They would also play a significant role in the final supplier selection. However, for other stages, their role is limited. 2. Consultant:
Consultant is hugely responsible for stages in the buying cycle like General Need Description, Product Specification and Supplier Search. The consultant shapes the view of the organisation with inputs based on his experience and expertise in the industry. 3. Sales force:
The opinion of the sales force on the quality of the product offering would convey the need for any changes in the product by providing the most valuable and the most relevant feedback. 4. CSAS Vendor:
Based on the inputs from the firm, the vendor customises...