saas and martech impact to modern pricing - haas mba spring 2016
TRANSCRIPT
Intuit Confidential and Proprietary1
SaaS and Marketing Technology:Impact to Modern PricingSpring 2016
• SaaS and Martech Pricing Considerations• Case Study: Intuit’s Martech “BluePrint” and Tech Purchasing
What is SaaS and Martech?
Brief History: Computer Science Innovation that drove the SaaS Model
Baby Boomers(Born 1946 – 1964)
Generation X(Born 1965 – 1981)
Millennial(Born 1982 – 1996)
Generation Z(Born 1997 - Present)
1961
IBM 1301 Disk Storage Unit is released.
1962
Atlas Computer emerges with virtual memory
1970
Computer-to-computer communication expanded when the Department of Defense established four nodes on the ARPANET
1978
Wang Laboratories to produce a disk drive small enough to use with a desktop computer
1994
The Iomega Zip Disk is released. The initial Zip system with later versions increased the capacity to 2GB
1990
The first web browser
2008
The first iOS app is released
The first FitBit is released
1999
Salesforce.com founded
2007
The first iPhone is released
Amazon Web Services launches drastically reducing the cost of server ownership
2004
Facebook is founded
2006
Twitter is founded
2010
The first iPad is released
SaaS
PaaS
IaaS
iPaas
Creative Cloud
History of Enterprise Technology and Customer Experience Platforms
ERPFinance
Key Players: 2
• SAP was founded in 1972• Oracle was founded in 1977
CRMSales and CareKey Players: 2
• Salesforce was founded in 1999
EMPMarketing
Key Players: 5Other Players: 1871
• EMP appeared first in Forrester Wave in 2014
Marketing technology are tools that make life simpler for marketers to market. They automate difficult, time-consuming and repetitive manual tasks to surface customer
insight. Built by technologists, used by marketers. Marketing technology should aim to remove or significantly reduce the need for IT involvement.
What is Martech?
Product Marketing
Care Sales
Customer
CampaignContent
AudiencesData
Marketing technology are tools that make life simpler for marketers to market and drive awesome customer experience. They automate difficult, time-consuming and repetitive manual tasks to surface customer insight.
Marketing Technology addressed one or more of these capabilities:• Campaign: The “Why”. Ability to manage the “business of
Marketing” though campaign management, top down strategy deployment and metadata to perform ROI calculations.
• Content: The “What”. Creation, management, distribution and delivery to any channel of content. Content comprises of any combination of pictures, video and copy.
• Audiences: The “Who”. Sometimes called “Segments”, it a grouping of individuals based on metadata (demographic, firmagraphic, behavioral and corporate)
• Data: The “So What”. Collection of the above data sets for assembly for insights and delivery of near time customer experience.
Martech Acceleration: 2013 – 2014 – Vendor grows ~200% (947 to 1876)
Estimated TAM (2015) - $17.6B with 21% CAGR
Most as SaaS or PaaS = 72%.
Exceptions are Middleware, Backbone Platforms and Infrastructure.= 28%
Marketing Experiences 979 vendors = 52%
SaaS or lightweight PaaS
Marketing Operations 377 vendors = 20%
SaaS or lightweight PaaS
Middleware - 114 Vendors = 6%PaaS or IaaS
Backbone Platforms - 241 Vendors = 13%PaaS and/or IaaS
Infrastructure - 165 Vendors = 9%IaaS
Martech Acceleration: 2013 – 9472014 - 1876 2015 - ~3500
Martech Acceleration: 1990’s to 2013 – Platform Players Spend ~$4B each to build their “Marketing Cloud”
EMP Players have spent ~$4B in acquisitions to build their “Marketing Cloud”…And they haven’t stopped buying to build...
DesignExecuteMeasureOptimize Plan Tactically
No vendors, manual processes
Some vendors, not integratedMultiple vendors, not integrated
StrategicBrief
Creative Briefs
Programs
Campaigns
Activities
Promotions
Marketing vendors are disproportionately developing technology for the “Execute” phase of the Marketing lifecycle.
There are technology gaps in capturing corporate metrics with marketing results.
Platform and infrastructure marketing technology to is nascent.
52% of Marketing VendorsAudiences
Campaigns
Assets
Data
The Intuit Journey – How Value is Determined
CX Vision
Deliver Awesome CX at every Intuit touch
point
Capability Strategy
Enable employees to deliver awesome CX across every Intuit touch point
Martech Architecture
Build a durable, scalable & secure CX platform to fuel Intuit vision & strategy
Source: Intuit
Intuit chose Multi-platform out of the 4 types of “stack” – Prevalent Enterprise Martech ”build” behavior.
• Suite
• Platform
• Multi-platform
• Bus
Martech Revenue Stream Considerations - Pricing Buckets
• Annual Licenses (Users, Instances, Storage) – Eloqua, AEM, SFDC• Consulting• Contracts with 3rd Party Vendors for Delivery (Big 5)• Bundling – Licenses w/ consulting, Multiple product licenses (Cross
sell / upsell), Multiyear
• Obsolete• Versions - no price upgrade. Increase annually through the
Annual Licenses.
Martech Vendor Pricing Strategy
Vendor Technology Type Pricing StrategyAdobe Marketing Cloud Content, experience
delivery, ad spending, campaign management
On premise, SaaS and PaaS
• Penetration via increased functionality, cross sell, upsell and consulting
Salesforce.com Social Listening, experience delivery, social advertising, campaign management
SaaS and PaaS
• Skimming with high priced entry cost on “instance”
• Penetration with additional “clouds”, user, functionality and consulting
• Additional pricing to vendors to connect to their platform (reputed $25M / annually)
Amazon Web Services *aaS Infrastructure IaaS • Penetration via increased storage
Marketo Marketing Automation SaaS and PaaS
• Penetration via increased functionality packages
Kapost Content Marketing SaaS, iPaaS • Penetration via increased functionality packages
Cloudwords Content Localization SaaS, iPaaS • Penetration via increased functionality packages and # of integrations.
Enterprise SaaS transition to Subscription Business Model: The Revenue Recognition Problem
FY14 FY15 FY16 FY17
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Perpetual
Subscription
Perpetual to SubscriptionTransition
Customer Purchase: $1MFull amount - revenue recognized next fiscal month
Customer Purchase: $4.5M, discounted to $3.6M – 3 year subscriptionRevenue recognized next fiscal month for $100k
Customer Purchase: $12M. Full amount - revenue recognized next fiscal month
Total: $800K
Customer Purchase: $800k Full amount - revenue recognized next fiscal month
Customer Purchase: $4.5M, discounted to $3.6M – 3 year subscriptionRevenue recognized next fiscal month for $100k
Total: $2M
Considerations: Pricing or Product Careers - Startup vs. Enterprise
Startup• How will you build?
• Web Service or Data Farms?• What will be your business model?
• Skimming• Penetration
• Cross sell• Upsell• Consulting• Partnerships
Enterprise• International and regulatory issues.
• Privacy: Customer Data
• Multitenancy: Transactional Data
• Transition issues:
• Is the back office ready?
• Business Models
• Pricing
• Finance – billing readiness. PO to Credit Cards
• Product
• IT: CRM, ERP
• Are the customers ready?
• Are your internal teams ready? (Sales, Marketing, Support)
Appendix
20% 10x -15% 70%
PlanAutomate the operational process that supports marketing.
DesignManage the creative development process and deliver to market.
ExecuteDeliver targeted experiences based on customer behavior.
MeasureTrack marketing effectiveness back to business metrics.
IntegrateCapture 360-views of customer engagement through CRM and engagement systems
OptimizeUnderstand your success and direct investments to areas of value.
1 2 3
456
Increase in conversion rates
Response ratio of campaigns
Decrease in acquisition cost
Faster time for Speed-to-Market
Source: Deloitte Engagement, January 2015
A methodical approach to marketing automation results in real measurable benefits. Closed loop marketing is a repetitive, ongoing process, not a destination or a single project. It is important to define measurable goals for Intuit SBG that can be optimized for over time.
Marketing Automation is a foundation an optimized marketing lifecycle
EMP Capability Framework (Template)
Wearables Gamingi-Beacons In Person Machine to Machine
Enablers
Platform Orchestration
Marketing PaymentCustomer LoyaltySales & Operations ServiceFulfillment
Analytics and Insights
Profile Generation
Social MediaInteraction
Predictive /Cognitive Analytics
Localized Promotions
Personalization / Recommendations Mobile Payments
Campaign Automation
Lead Management
RecommendationEngine
eCommerce Virtual CustomerService Mobile Apps Recognition
Program
Regional SpecificFlavors
Single CustomerView
CommunityEngagement Digital Content
AdvancedVisualization
Real-timeDevOps
Ambient Computing /Internet of Things
AdaptiveDesign
CloudOrchestration
In-MemorySolutions
Financials Supply Chain OrderManagement
CaseManagementCRMProduct
CatalogCustomer
Master
Social Mobile Phone WebContextual and Seamlessacross customer touch points
Marketing automation is a critical piece of the broad customer engagement systems, and be appropriately integrated with other capabilities within the other enterprise technical architecture.
Source: Deloitte Engagement, January 2015
Path to Defining Customer Journeys and Campaigns
Journey ScopeTouch Points
User FlowMessage InventoryContent Template
Requirements Tracker
Identify Business
Objective and relevant Content Story
Identify tactics from Multi-channel plan
Identify audience / target customers
Identify timing and frequency of journey
Map the channel touch points for the journey
Align content to each step
Identify calls-to-action
Map alternative paths in the journey (branch logic)
Drill down into each step
of the journey
Determine personalization needs
Map customer attributes to personalization
Review journey for content gaps
Document data needs for triggered events
Complete the journey blueprint document using
completed templates
Review and approve
Begin to configure
Define Objective Identify Journey and content
Determine Personalization
Finalize Requirements
Tem
plat
es
Intuit Current Marketing Capabilities State AssessmentIntuit CE current state is fragmented across products and channels
Segmentation
Capability
Research insights
CX Definition (Personas/ Journeys)
Definition
Using various research to provide a holistic understanding of customers’ needs across the entire lifecycle
Bring customers to life by designing personas and journey maps to drive strategic and operational decisions to enable impactful interactions
Developing Practicing Innovative
Current Capabilities
Target Capabilities*
Customer Data Analytics
Capturing, storing and cleansing customer data to make business decisions and derive insights into customer preferences, priorities and behavior
Understanding of market and customer base using multiple schemes with a dynamic view. enabling the transition of customers across segments
Touchpoint and Content Strategy
Creating and delivering valuable, relevant and consistent marketing content in a coordinated manner across multiple channels and touchpoints
Source: Deloitte Engagement, January 2015
Marketing Automation CX Transformation: Future 0-7 Day Trialers
Unopen, No Log-in“Take a Tour” Email
Day 0: Registers for Trial
Opens, “Clicks “Take a Tour”Welcome Email
(12k / wk new Trialers)
Day 7
Opens Welcome MailClicks “Add Bank Info”, Closes w/no entrySend “Bank Info Entry Benefits” Email
Open “Bank Info Entry Benefits” Email
Clicks “Subscribe Now$9.99/mo”,
No Log-in for 5 daysSend “Get One Month For Free” Email
Open, “Nurture” Day 8 – 29 Trialer Program
“Right for me” marketing messages based on customer behavior; Full visibility to customer experience allow optimized customer experience across marketing, sales, care.
0
+2
+1 +1Web Sale fulfilled
Shows on top of the SFDC Lead Queue based on Lead Score
>3
+2
+2-1
Add to “NurtureDay 30-59 Trialer” Program<=3
1. Customer Experience Definition
2. Data/Unified Customer Profile
Sample - Roadmap – Value Milestone View
The two year roadmap is intended to provide direction to planning, execution and roll-out, and is subject to iterative refinement and re-planning based on business priorities and value drivers.
4 months
POC
6 months
1. Customer Engagement Automation
2. Marketing Resource Management
3. Audience Management
4. Journey Analytics
P1 P2 P3
Dependencies
6 months 8 months
Initiatives
Milestones
25
• Validated platform choice and business case
• Conversion and lead metrics validated
• Business case and execution plan developed
• Email campaign efficiency lift
• Web campaign tracking
• Increased lead conversion through funnel for a small set of products
• Marketing & sales gains
• Cross-channel campaign efficiency lift
• Journey analytics
• Increased lead quality for SBG telesales and ProTax
• Revenue gains in the U.S.
• Conversion lift across sales, marketing, care interactions
• Efficiency and visibility gains in overall campaign execution
• LTV tracking and lift
• Conversion, lead quality, and campaign cost gains across SBG in North America
• Initial gains in geo campaigns and engagement
• C-Sat gains
• Coordinated campaign execution across marketing, sales, care, product
• Ongoing global roll-out and campaign scale
• Global efficiency lift
• Increased GNS & LTV globally
• True campaign ROI tracking and improvement
• Ongoing C-Sat gains
• Revenue gains
• Ongoing ROI optimization
• Full global roll-out
• Planning, tracking, execution, and measurement across SBG