microsoft dynamics us industry summit - neural impact · microsoft security essentials mobile...
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#DynStrong | @usdynamicsevent
• Hotel Del Coronado | Coronado, CA
• November 2-4, 2016
Microsoft Dynamics US Industry Summit
Packaging, Pricing and Positioning
Your Cloud Solutions (and IP)
#DynStrong | @usdynamicsevent
Sharka Chobot
About Sharka
Chief Transformation Officer, Neural Impact
30 year marketing executive (Simply Acctg (Sage), Pivotal
CRM, ATI Technologies, Epicor ERP/Vantage Point)
Professor Marketing & Behavioral Science
Advisor to Microsoft & Tier 1 & 2 Microsoft AX/NAV/CRM
Partners: Europe, North America
Creator: CRM Product Category
Creator: Microsoft EIPP Content
Sharka’s contact info:
(604) 987-4275
www.neuralimpact.ca
#DynStrong | @usdynamicsevent
Stop Being Product Driven
Economic ShiftsMacro level economic shifts.
Economic growth
Increase in disposable income
Improving consumer confidence
Unpredictable currency fluctuation
Increasing labor costs
Regulatory ChangeChanges to regulatory compliance
Import compliance
EVM chip & pin requirement
Minimum wage increase
OH&S Legislation
Industry Consolidation
Fewer, larger retailers
Online aggregation
Product/Service
CommoditizationInability to differentiate based
on product or service offering.
Counterfeit products
Commoditization
↑ Marketing Costs ↓ Average Purchase Value
↓ YOY Same Store Sales ↓ Incremental Sales
↑ Inventory ↑ Borrowing Costs
↑ Returns ↓ Differentiation
↓ Gross Margins ↓ Profitability
↓ Working Capital ↑ Labour Costs
↓ Sales/Square Foot ↓ Customer Retention
↓ Inventory Turns ↑ Merchandising Costs
↑ Leasing/Real Estate ($) ↑ Discounting/Matching
↑ ↑ Online orders
Competitive PressureChanges in competitor behaviour/new
entrants.
New online entrants
Heavy discounting
New specialty entrants
Free/expedited shipping
New loyalty programs
Click & Collect
New products
Changes in Customer
BehaviorChange sin Consumer Behavior
On-line shopping/research
Declining brand loyalty
Fast-Fashion (value orientation)
Off-price shopping
24/7 support expectations
Show-Rooming
Changing demographics (baby
boomers/millennials)
New payment forms (smartphones,
PayPal)
Online/social feedback
Supplier ChangeChanges in supplier behavior or business
models
Adding new channels/retailers
Opening direct retail stores
Longer order lead times
Shorter selling “seasons”
Expanding product lines
#DynStrong | @usdynamicsevent
Microsoft Social Engagement
Collect club mentions and other data from Twitter, Facebook, and other social media sites
Fan Engagement PlatformCaptures and stores every interaction with a fan, including mobile check-ins at the club’s stadium, online fan profile updates on the club’s official website, and online merchandise purchases.
Azure aggregated data into social segmentation of the individual fan
Extended Video PlatformAzure Media Services, App Service Media Player, SearchNew and past video of Real Madrid matches
.Customer AppNET Framework + Microsoft Visual Studio 2013 s on club’s players and games
March 14, 2016
Microsoft Office 365
Microsoft Dynamics CRM Online,
Power BI
Azure
Real Madrid C.F.
450 million fans around the globe,
with the Microsoft Cloud
Integrated Industry Solution
#DynStrong | @usdynamicsevent
Low Cost, Low Risk Development Strategy
Need Minimum
Feasible
Concept
Lo
w In
vest
men
t
Minimum
Viable
Product
MVP
Hig
h In
vest
men
t
Full
Product
#DynStrong | @usdynamicsevent
What is in an MVP?
Emotional
Reliable
Pretty Much Usable
Basic FunctionalityNot the MVP
Emotional
Reliable
Pretty Much Usable
Basic Functionality
This is the MVP
#DynStrong | @usdynamicseventSource: Retrieved Mary 2016, Copyright of each respective owner.
https://azure.microsoft.com/en-us/marketplace/
#DynStrong | @usdynamicsevent
1998
Billion
Zappo’s MVP Start…
Requirements Design Implementation TestingRelease +
Maintenance
• Root CauseAnalysis & Insights
Understand
Persona +
Problem
• Build SolutionBuild Minimal
Viable Product
• Test Assumptions, PIVOTTest &
Pivot
• Root CauseAnalysis & Insights
Understand
Persona +
Problem
• Build solutionBuild Minimal
Viable Product
• Test Assumptions, PIVOTTest &
Pivot
Farmer: perishable inventory – 7 weeks “mobile bazaar” text messaging based marketplace.
#DynStrong | @usdynamicsevent
50% of Features in New Releases
are Never Used!!!
#DynStrong | @usdynamicsevent
Changing Business Model
Services Revenue
80%
Reactive
Services
Recurring
Services
One Time Implementation
Product Revenue
20%
IP Revenue
Ongoing
Recurring
Product
Revenue
Up Front
Perpetual
Licenses
#DynStrong | @usdynamicsevent
#DynStrong | @usdynamicsevent
Current Services by REVENUE TYPE
ONE TIME
#DynStrong | @usdynamicsevent
Client is Managing Less and Less…
IT is
Outsourced
IT is
Virtualized
#DynStrong | @usdynamicsevent
Innovate Services
CRM Online
Packaged IPAverage Revenue: $2 - $5K3
Margin: 65%
• Industry-specific Workflows• Function-specific Workflows (e.g.
HR, Procurement)• Mobility Solutions• Office Connectivity & Other Plug-Ins
& Add-ons• External Portals for End Customer
Information• Pre-Configured Dashboards
Managed ServicesAverage Revenue: $2-$5K3Margin: 45%
• Reporting & Analytics• Online Training & Self-paced
Learning• Support Services• Social Listening and Sentiment
Analysis
Build long-term, value-added services for sales productivity
Par
tner
Rev
enu
e
Project ServicesAverage Revenue: $2.5-$15K3 Margin: 35%
• Solution Analysis, Scope, & Design• Integration and Data Migration• Cloud Readiness Assessment• Deployment• Business Process Transformation
Capitalize on themarket opportunity
Source: The Future of Corporate IT, 2013-2017 2. CEB Survey of 165,000 employees 2012 Survey on Self-Service BI and Analytics, Unisphere Research 3. MDC Research, Microsoft Cloud Profitability Scenarios May 2015
#DynStrong | @usdynamicsevent
Shift from Time & Materials to Packaged Solutions
Customer
• Customer Risk
• Length of Decision Making
• Cost Over Run Risk
• Time to Deploy
Packaged Solutions“Out of the Box”
Time & Materials
Internal
• Cost of Selling
• Length of Sales Cycle
• Cost of Development
• Labour Intensity
• Time to Implement
#DynStrong | @usdynamicsevent
Fallacy: High Utilization is Good
High utilization rates have serious negative side effect
As utilization delays lengthen dramatically
Unpredictable - Not like manufacturing with few surprises and orderly work
5% more work can increase time 100%
#DynStrong | @usdynamicsevent
#DynStrong | @usdynamicsevent
TARGET Industry Revenue Portfolio Future
MS Online Service Marketing Rebate or Discount for Selling
ERP Online
Customer
Engagement
Solution
Online
Microsoft
Security
Essentials
Mobile
Device MgmtPortals Office 365 PowerBI
Non Strategic Project
Services
Data
MigrationDeploymen
tIntegration
Configurati
on
Customizati
on
Managed Services
Help DeskOn Demand
Training
Packaged Vertical Industry IP
Industry-
specific
Workflows
(e.g.
compliance
, food
manufactur
ing)
Function-
specific
Workflows
(e.g. HR,
Procuremen
t)
Mobility
Solutions
3rd Party
Add-ons-
(ISV
MS Office
Connectivit
y & Other
Plug-Ins &
Add-ons
External
Portals for
End
Customer
Information
Pre-
Configured
Dashboard
s
Industry
Related
Content
High Value Professional Services
Strategy
Advisory
Cloud
Transformation
Business
Impact
Workshop
High Value Strategic
Professional Services
Social
Monitoring
Sentiment
analysis
Optimization
Services
Benchmarking
Service
Commoditization
Differentiation
20% One time 80% Recurring
#DynStrong | @usdynamicsevent
Lifetime Value Model Changing
#DynStrong | @usdynamicsevent
Service
High Risk
Intangible
Product
Low Risk
Tangible
Trust
#DynStrong | @usdynamicsevent
Uncertainty
Confident Decision
#DynStrong | @usdynamicsevent
TRUST
= Belief
Reliable
Benevolent
(Caring,
Compassionate)
Honest
#DynStrong | @usdynamicsevent
Trust & Transparency
#DynStrong | @usdynamicsevent
One Fixed
Out of the Box Price
is NOT an OPTION!!!
#DynStrong | @usdynamicsevent#DynStrong | @usdynamicsevent
#DynStrong | @usdynamicsevent
Quick Start
• Out of the box vertical IP
• Minimal Integration
• Not touch email and self
service support
• Minimal implementation
services
• Defined single import
• $25,000-$75,00
Switch from
Competitor
• Out of the box vertical IP
• Conversion services
• Defined integration
• Defined number of support
hours per month
• Fi# of Days of Training
• Defined data imports
• $75,000-$250,000
Complex Legacy
Environment
Custom Solution
• Out of the box vertical
Extensive legacy system
Integration
• 24x7 senior dedicated
support resource
• Extensive Implementation
Services
• Lots of Training
$250,000-3 million
#DynStrong | @usdynamicsevent#DynStrong | @usdynamicsevent
Pricing Models 1. Perpetual License
2. Consumption – usage based on criteria, pay as you go
3. Tiered – scalable, pay based on levels criteria
4. Freemium– capacity, feature, time, use case
#DynStrong | @usdynamicsevent
User Based Pricing
#DynStrong | @usdynamicsevent
Customer Niche
#DynStrong | @usdynamicsevent
What is the
JOB your
Product
is being
hired to do?
Persona Packaging & Pricing
#DynStrong | @usdynamicsevent
$319 $345 $389
Pricing Bias
#DynStrong | @usdynamicsevent
Fries with that?
Default
Blog: http://neuralimpact.ca/blog/default-options-going-increase-revenue/
#DynStrong | @usdynamicsevent
Centre Stage Effect
Valenzuela and Raghubir (2009)
#DynStrong | @usdynamicsevent
#DynStrong | @usdynamicsevent
Package up Services
http://thenextweb.com/google/2013/02/21/google-debuts-four-tiered-247-support-for-its-cloud-platform-services-prices-start-at-0-to-400-per-month/
#DynStrong | @usdynamicsevent#DynStrong | @usdynamicsevent
#DynStrong | @usdynamicsevent
Software, Wholesale Distribution, and Manufacturing
NetSuite
NetSuite
OneWorld Pricing
Starting from:
$499.00/month
31% Year-over-
Year Increase in
Q4 Revenue of
$206.2 Million
#DynStrong | @usdynamicsevent
Add Ons
http://www.powerobjects.com/powerpacks/powermap/
#DynStrong | @usdynamicsevent
Free Trial – Limited Time
#DynStrong | @usdynamicsevent
Storage, # of Users
Limited Capacity Based Freemium
I2GB
Storage free
Incrementally
price 10GB -
$10 per
month under
“Pro” plan
Enterprise
sales of 1
TB+
Negotiated
Basis
#DynStrong | @usdynamicsevent
Certain Features Locked
Feature Based Freemium
#DynStrong | @usdynamicsevent
Vertical Value add FREE Forever Applet
Free Value Forever
https://www.quickenloans.com Copyright of respective owners.
#DynStrong | @usdynamicsevent
Scarcity & Loss
#DynStrong | @usdynamicsevent
Highlight Strengths
What You Care About US Comp 1 Comp 2
Expertise an focus on your
Industry
100% Manufacturing 5 different industries Horizontal
Years in Business 25 6 8
Locations we Serve New York, LA, London New York LA
Integration with your Existing
Industry’s Specific Legacy
System(s)
Out of the box Pay Extra Pay Extra
Total Cumulative Years Experience
in your Industry
CEO – 15
VP Sales – 10
COO – 12
Staff - 140
TOTAL: 177
Limited Limited
Complex Legacy Integration Tools
and IP (SAP)
Yes No No
#DynStrong | @usdynamicsevent
Competitive Pricing Comparisons
Source: http://roseasp.com/wp-content/uploads/2014/11/GP-vs-Intacct.png
#DynStrong | @usdynamicsevent
Revenue Stats
#DynStrong | @usdynamicsevent
Bundle: bundle different services and
package them as one offer
Incent: leverage information of usage and
consumption behavior to incentivize
uptake of new services
Reward: give limited period bonus
services once certain criterion are met
and/or usage levels have been reached
Inform: send near real-time notifications
of key account activity or critical usage to
clients
Satisfy: deliver unbilled usage information
or enforce credit limit checks to avoid bill
shocks
Upsell Strategies:
Benefits to Offer Customers
#DynStrong | @usdynamicsevent
Questions?
#DynStrong | @usdynamicsevent
Sharka Chobot
Sharka’s contact info:
(604) 987-4275
www.neuralimpact.ca
Conduct a Mini Digital Emotional Engagement
Assessment of YOUR website Online Now:
http://www.neuralimpact.ca/industrysummit