SaleSoft, Inc. (A)
Greg Miller and Bill Tanner, Executive Vice President and CFO, founded SaleSoft in July 1993 with the objective of marketing PROCEED, a Comprehensive Sales Automation System (CSAS). While PROCEED had received very favorable responses from prospects, converting interest to actual sales was taking a long time with only five PROCEED systems having been sold to-date.
In September 1995, with limited funds and the need to show performance before seeking additional venture capital, Gregory Miller, the president and CEO of SaleSoft, and William Tanner, the executive vice president and CFO, now need to decide the future course of action for their company. They are faced with the question of whether or not to introduce a Trojan Horse product. This product can be developed, with some work, using the existing modules of PROCEED's Sales System that have already been developed. 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. In addition, there is a risk that it might cannibalize sales from the PROCEED product that SaleSoft is currently marketing. Finally, TH can potentially prevent SaleSoft from forming relationships with consultants whose support is critical to the success of PROCEED. Yet, TH might offer an easy way for SaleSoft to get into new customer accounts, gain quick sales, and generate much needed revenues.
The situation is complicated by the fact that current PROCEED customers are expecting SaleSoft to deliver the complete PROCEED solution as soon as possible. Should Sale5oft complete the development of the PROCEED product and continue trying to sell PROCEED to select customers? or, should the firm make an all out effort to launch TH to a much larger customer base?
This note was prepared by Professor Das Narayandas with the assistance of Research Associate Sara Frug for the sole purpose of aiding classroom instructors in the use of SaleSoft, Inc. (A), HBS case No. 596-112. It provides analysis and questions that are intended to present alternative approaches to deepening students comprehension of business issues and energizing classroom discussion.
Copyright @ 1998 by the President and Fellows of Harvard College. Used with permission.
This case can be used to illustrate the challenges faced by suppliers with limited resources that operate in markets with long buying cycles. It can also be used to link buyer behavior, product design (bundling), and pricing issues.
The case is best taught in a business marketing, entrepreneurial marketing, or a high technology marketing course. It can also be used very effectively towards the end of a basic marketing strategy course.
At HBS, this case is taught as the transition between the "Understanding the Customer" and "Managing the Value Proposition" modules in the second-year Business Marketing elective, and on the last day of the Business Marketing Module in the Strategic Marketing Management program for senior marketing executives.
The teaching of this case involves the following objectives:
1. Linking product policy and pricing issues with the customer acquisition and retention process. More specifically,
• Understanding the role of a Trojan Horse product in developing a customer migration path that facilitates customer acquisition and enhances their retention.
• Quantifying a product's benefits or value to a customer, and integrating this value with other strategic and tactical issues to set price.
2. Understanding the complexity of a decision making unit (DMU) and the associated decision making process (DMP) in the purchase of complex, technological products. More specifically:
• Understanding the decision making process (DMP), its stages, time frame, and the people (the DMU...