Marketing-1

Case Analysis
SaleSoft, Inc. (A)

Submitted By:

Agarwal Rahul Rajkumar 2019PGP028

Anisha Kumari 2019PGP056

Prashant Saha 2019PGP307

Shivali Bhardwaj 2019PGP383

Sanjay NS 2019PGP502

Under the guidance of

Prof. S Bhavani Shankar

In Partial Fulfillment of the Requirements for qualifying a
Pass in Marketing-1

At

Indian Institute of Management Indore, Rau-Pithampur Road,

Indore, Madhya Pradesh, India.
2019
Problem Statement:

SaleSoft Inc. was founded in 1993 to develop and market Comprehensive Sales Automation
System (CSAS). The primary objective of SaleSoft was to become a leader in the high end of
the Sales Automation (SA) software industry.
By September, 1995 SaleSoft had completed three out of eight modules of PROCEED
(approx. 35%). However, a large number of companies who were not ready to accept
PROCEED, were desperately looking for a system to manage their sales forecasting process
due to various reasons. SaleSoft realized that it is possible to build such a system with the
three completed modules of PROCEED but it would require substantial effort on their part in
software design, marketing and development. They called this stand-alone product as Trojan
Horse. But, investing time in this product would lead to a deviation of the company from its
objective of becoming a leader in the high-end Sales Automation market.
Problems faced by the manager/key person:
• Gregory Miller, the president and CEO of SaleSoft was faced with the question to decide
whether to continue trying to invest and market PROCEED to select customers, or to
make an all-out effort to launch TH to a much larger customer base
• Focusing on the launch of Trojan Horse in Sales Automation Conference held in
December, 1995 would lead to SaleSoft devoting all its efforts towards it, hence it would
have to suspend all efforts towards PROCEED
Short Term Problems
• Making a decision to choose between focusing on the launch of TH or PROCEED
• TH could potentially prevent SaleSoft from forming relationships with consultants whose
support was critical to the success of PROCEED
Long Term Problems
• Company might lose its First Movers Advantage if they were to pull out of the CSAS
market and concentrate on TH
• Launching TH would cannibalize sales from PROCEED that Salesoft was currently
marketing and might permanently relinquish PROCEED’s current promising position in
the market

Causes of the Problem:

1. PROCEED had received very favorable responses from prospects in the past 18 months.
However, converting interest to actual sales was taking a long time
2. SaleSoft had developed three modules of PROCEED till date, however the customers
wanted to see the total PROCEED product before making any purchasing commitments
3. There was a limited fund and the company had to show performance before seeking
additional venture capital
4. There was a significant demand in the market for a product which could manage sales
forecasting process
5C Analysis to assess the situation

1. Company
a. Main objective of the company was to become a leader in the high-end Sales
Automation
b. 35% of planned CSAS product (PROCEED) was complete as of early 1995. This may
provide the company with first mover advantage which could be helpful considering the
small market size of CSAS
c. From Exhibit 9, we can see that the major portion of the company’s revenues were being
spent in Marketing and currently the company was operating in losses

2. Customer
a. SaleSoft had sold the 3 existing modules of PROCEED to five customers in the
computer software industry and had an installed base of just under three hundred users
b. In each case the customer wanted to see the total PROCEED product before making any
purchase commitments
c. Commercial banking companies were the major potential customers with over 1.5
million sales rep. Software Industry, Electronics, financial services and life insurance
companies are were other potential customers (From Exhibit 2)

3. Collaborators
a. SA consultants - Several CSAS vendors had announced partnerships with SA
consultants. Partnering with consultants helped a CSAS vendor in two ways. First, it
allowed the CSAS vendor to access the consultant’s customers while potentially locking
out other CSAS vendors. Second, it took care of the training issues. It was common for
consultants to either have in-house training skills or long-standing partnerships with
specialized training firms.
b. The main disadvantage of partnering was that it could potentially alienate the CSAS
vendor from other consultants and their customers

4. Context
a. SA market in 1995 was estimated to be 1 billion dollars and expected to grow at 40%
annually over the next 5 years
b. Due to the limitations in CMS, several companies announced CSAS products, which are
expected to deliver value where there was uncertainty and variance in the sales order
cycle.
c. There was a huge potential for CSAS products and also Market penetration was very low
around 2.4 million or 26 percent out of the potential 9.2 million sales people currently
working in US markets (estimated by Gartner Group as mentioned in the case)
5. Competitors
a. Over three hundred vendors present that offered solutions addressing one or two SA
areas. Most of them were small niche firms that had annual sales less than $5 million
b. Only a couple of vendors, such as Sales Technologies with sales over $ 50 million and
Brock Control Systems with $ 25 million were considered big players. These firms were
concentrated in the mainframe environment. However recently the SA market had seen a
shift from mainframe to PCs based client/server systems. Hence this new PC based
market was filled many small startups still looking to capture the market
c. Giants like Microsoft and Lotus had announced major strategic thrust at the low end of
SA. In addition, CMS vendors had announced their intent to upgrade existing CMS
capabilities to allow user to hook onto networks, share information and manage sales
opportunities. This would make TH market extremely tough and competitive very
quickly
d. From Exhibit 3 we can get a comprehensive list of all major players in the CSAS market.
By projected revenues Sales Technologies was the biggest player in the market with $ 50
million projected revenues. By user base, Saratoga Systems had the largest market share
with 80 clients and 3200 users. Compared to these values SaleSoft had a projected
revenue of $ 0.3 million with 500 user bases.

Segmentation, Targeting and Positioning

• Segmenting:
o PC users
• Targeting:
o Prospects who were not ready for PROCEED and were looking for a system to
manage their sales forecasting process
o Prospects who wanted to improve their selling effectiveness and reduce selling time
by two to three percent
o Wanted to manage the sales pipeline better
o Needed more than a CMS but did not need a CSAS
• Positioning:
o First Movers in the market facilitating sales forecasting process
o Integrating Marketing and service with sales

Alternative Solutions
1. Continuing with PROCEED, full-range CSAS product
PROS: PROCEED allowed customers to automate their entire marketing, sales and
customer service operations
a. The market of PROCEED was filled with small startups with very less market control,
this may provide SaleSoft with a first mover advantage and equal fighting chance in
capturing the still evolving market
b. We believe that PROCEED was the core competency of the company and was the
primary objective of SaleSoft from the start
 c. PROCEED was developed to run on Microsoft Windows, an industry standard
operating system. This was expected to shorten the learning time for the large
installed base of Windows users industry wide
d. PROCEED was integrated with common email, word processing, fax, spreadsheet and
presentation software. It used advanced software technologies that allowed the sales
person to use the complete functionality of the system unattached to the host system
e. PROCEED will provide with long term source of income for the company

CONS
a. Completion time was high. Along with high market entry barrier
b. CSAS implementation cycles are lengthy (24-30 months) with heavy dependence on
SA Consultants
c. To continue with PROCEED development, Sales Soft is going to need another 8
months to develop the remaining 5 modules and additional investment of $1 Mn while
the company was already projecting losses till 1996. Hence developing PROCEED
was not going to be an easy task for SaleSoft

2. Launching a mid-segment product Trojan Horse by using the above 35% ready
product instead of PROCEED & start getting early revenue.
PROS
a. Selling process was much more simplified and was easier to quantify its benefits and
hence simplified the benefits of TH
b. TH was focused only on sales. This significantly reduced number of people involved
in the buying cycle
c. TH would take a third of the time and marketing costs (per user) to sell PROCEED,
since it was focused only on sales and revenue forecasting
d. TH required low customization costs and hence could cater a much broader market
e. There is no need of partnering with the SA Consultants for implementation of TH
f. Would open customers doors if preferred a low-price approach for TH
g. Selling TH might relieve SaleSoft from its immediate cash worries as it would act as a
source of income in the short term

CONS *Issues with Trojan Horse as a standalone product

a. Substantial work required. Almost 200,000 dollars required for developing and fine
tuning of TH.
b. The trojan though mainly consists of 3 modules from the sales system needs addition
of functions and interfaces from other systems to make it work as a standalone
product named as Trojan Horse
c. If TH is set at a high price, it will be difficult to sell and will demand a lot more
customer education effort costing half a million dollars over the next six to eight
months
d. TH would cannibalize sales from PROCEED product and will prevent SaleSoft from
forming relationships with consultants whose support was critical for the successful
implementation of PROCEED
 e. User base of PROCEED is 500 (Exhibit 3) which is least compared to competitors.
So, delaying PROCEED by pushing TH will ruin the company’s chance of gaining
more market share in CSAS
f. CMS vendors had announced their intent to upgrade existing CMS capabilities which
would make the TH market tough and competitive very quickly in the near future
3. Launching Both PROCEED and TH
PROS
a. Both products are targeted to different markets pricing TH low to get entry in the
market will provide SaleSoft with short term revenue stream to support development
of PROCEED in the long term
CONS
a. Not enough resources to have separate sales force for TH and PROCEED
b. Sales People would push TH rather than PROCEED if asked to sell both which might
result in customers losing interest in PROCEED in the long run
c. TH would cannibalize sales from PROCEED product that Salesoft was currently
marketing
d. This would delay PROCEED indefinitely and SalesSoft might lose its first mover
advantage as there are many competitors who are trying to gain market dominance in
CSAS systems

Recommended Solutions & Conclusions

• Go forward with PROCEED because it falls in line with SaleSoft’s core competencies
and its original objective of becoming the leader of the CSAS segment
• There is no threat to SaleSoft in the PROCEED segment in the short as well as the
long term whereas Trojan Horse will soon have a large number of competitors which
will reduce the market share of the company. The market of PROCEED has less
crowd with small startups-in case of TH there is huge competition from giants like
Microsoft and Lotus
• From client’s point of view, PROCEED has huge monetary benefits (Exhibit 7) and
all the disadvantages faced in marketing and implementing of PROCEED are similar
across the industry
• PROCEED is a comprehensive system, TH is a sales module of PROCEED which
limits its usability and it cannot cater to all the CSAS needs of an organization. Hence
benefits from TH will be short lived and not sustainable
• Larger market share available if SalesSoft continues with PROCEED as the CSAS
market is yet to be fully captured with Commercial Banking holding the largest
number of potential firms
• Though the year 1995 and 1996 are going to give SaleSoft no revenue, SaleSoft is
adequately covered till end of 1996 via VC funding
References
• https://www.slideshare.net/sanmeetdhokay/sales-soft-analysis-group-a-
v20?from_action=save
• https://www.slideshare.net/DonaAnna/salessoft-final