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SaleSoft, Inc. (A) Case Solution
SalesLoft, a startup established in 1993, is a provider of Comprehensive sales automation solutions (CSAS) that help companies to automate their process of sales, marketing, and service functions. The product has managed to generate a positive response from the prospective clients because of high demand of sales integration software in the market. However, the high cost coupled with the product complexity has made it difficult software to sell. In order to solve this problem, SalesLoft has launched a new product called “Trojan Horse” (TH). TH, being a simplified version of CSAS, will provide companies with an easy way to automate the sales cycle and generate revenue. This product will help SaleSoft to enter a new market. However, one possible threat that this product poses to SaleSoft is the cannibalization of PROCEED, a CSAS software of SalesLoft. Now the company must decide whether it will stick to sales of PROCEED or will launch this new product TH.
Following questions are answered in this case study solution
Why has it been difficult for SaleSoft to convert interest into sales for PROCEED?
Who is the customer for PROCEED? For Trojan Horse? Are they the same customer?
What is the buying process for each product? Who is involved? What roles do they play? How long does it take?
Using the information given in Exhibit 7: can we quantify the value of PROCEED and Trojan Horse software to a customer? How would you use this information to sell either product?
If you were Greg Miller: what would you do? Do you launch Trojan Horse software or do you stick with PROCEED?
Case Analysis for SaleSoft, Inc. (A)
1. Why has it been difficult for SaleSoft to convert interest into sales for PROCEED?
Numerous reasons are responsible for the inability of SaleSoft to convert the customer’s initial response to sales. Even though many companies want to automate their entire selling cycle, but because of the high cost associated with such software, most of them are reluctant to install it. Each company has its own reasons for buying this software. Since CSAS does not come in customized form according to the needs of the consumer and the industry, customizing them further increases the cost. Therefore, while many companies do need such software, they are still reluctant to install them. Secondly, CSAS is complex software to understand with numerous advanced features. These advanced features are at times useless for small companies who need to PROCEED only for integrating data. Also, understanding it fully requires rigorous training on the part of employees. This makes it difficult to use for small companies. Thirdly, the testing time of PROCEED is 22 to 30 months. For an average company, this time is very long. Accompanied by rapid changes in technology and needs of the customer, this long time of implementation at times also the customer to withdraw their demand for PROCEED. Lastly, the implementation process is a seven-step process. At times, few processes of the company cannot be automated. For this, the company has to consult professional software consultants. This further increases the cost of PROCEED. Because of these few reasons, SaleSoft was finding it difficult to convert the interest of its clients into sales.
2. Who is the customer for PROCEED? For Trojan Horse? Are they the same customer?
The CEO of SalesLoft is considering the option of launching a new product called Trojan Horse but is facing the challenge of deciding whether TH will cannibalize the sales of PROCEED or it will totally cater to the demands of a new segment of the market. For this, the CEO must look at the features and characteristics of both the software. Trojan Horse is a simplified version of PROCEED that will help consumers automate their sales processes at a very basic level. Also, Trojan Horse is less costly and simple to understand. PROCEED, on the other hand, is for customers that require high automation of their sales process along with its integration with other processes like marketing, operations etc. It is a complex software that offers customized services to its consumers and is priced relatively higher than other CSAS. Because of these reasons, it can be easily concluded that to an extent both this software cater to the demands of different customers and hence have different targets. But deeper analysis shows the overlap of the customer base. Both of these software help consumers automate their sales process and hence launching Trojan will cannibalize the sales of PROCEEDS. Many consumers require high automated services, but because of the low cost and simplicity of Trojan Horse, they might end up using TH instead PROCEED. Launching Trojan Horse will shift the focus of many customers from technical PROCEED to simple Trojan Horse.
3. What is the buying process for each product? Who is involved? What roles do they play? How long does it take?
Both Trojan Horse and PROCEED are the products of the same company and have more or less the same buying procedure. Since the CEO believed them to be the products that fall in the same product line, both of them had the same sales staff to sell them. However, because of the difference in complexity level and the type of services these products offer, their buying process had been customized at various levels. Since PROCEED is a three-step software that cater to the demands of marketing, sales, and operations; its customer base is broad and hence it requires targeting a lot of people for sale to a single firm. Trojan horse, on the other hand, is only sales automating software and hence people involved in it are only the sales staff of the company. Secondly, TH was simple software that was easy to sell because of its simplified nature and the broad target customer base willing to buy it. It was easy for salesmen to understand and explain to customers as compared to PROCEED which being a technical software, requires a lot of effort and time to understand.
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