10 Critical To Do’s to Accelerate Cloud Customer Acquisition

Sharka Chobot

Session Slides: https://neuralimpact.ca/directions2019/

10 Critical To Do’s to Accelerate Cloud Customer Acquisition Understanding how the Cloud Buyer 3.0 is

Different

Marketing Should Drive Sales

Stop Being Logical

Get Digital--Content is KING

Sales Needs to Disrupt

Differentiate or Die

Specialize or Lose

Repeatability is the Key to Growth and Profit

Re-invent Your Service Offerings

Accelerate and Simplify Deployment

Sharka Chobot

About Sharka

• Chief Transformation Officer, Neural Impact

• Creator: CRM Product Category

• 30 year marketing executive (Simply Acctg (Sage), Pivotal CRM, ATI Technologies, Epicor ERP/Vantage Point)

• Professor Marketing & Behavioral Science

• Media & Technology Psychology Researcher

• Advisor to Microsoft Partners and ISVs around the globe

Revenues $159 million 232 million => 3 years Acquired AMD for $5.6 billion Acquired by Computer Associates

NOW SAGE

Status Quo Bias

An emotional bias; a preference for the current state of affairs.

Stages of Transition

New Beginning

NO MANS LAND

Letting Go

Bridges Model of Transition

FearDenialAngerSadnessDisorientationFrustrationUncertaintyA sense of loss

ResentmentLow morale Low productivityAnxietySkepticism

High energyOpenness to learningRenewed commitment

Buyer 3.0

Changing Buyer

Strongest industries :• Discrete manufacturing (53% LOB)

• Process manufacturing (52% LOB)

• Professional Services (51% LOB)

Top functional areas:• Accounting/finance/billing (56%)

• Customer service (55%)

• Industry specific operations (50% )

Key Buyer

Source: Business Wire, April 2018

Acquisition is getting harder

Buying Decision Today

Fear

Resistance

Control

Safety

Feel

Look

Logical Emotional

Price

Functionality

Features

Quality

Displacing

Initial Buying Decision

Perpetual

Subscription

Decision Time

Decision Time

Sunk Cost BiasNeed to be Right

High Emotional Commitment

Trust/FaithProve It FAST

Marketing’s Role in the Buying Cycle

Traditional Sales Process

Connect with and

qualify leads

Conduct research

Educate prospect

on product/

services

Demonstrate capabilities

Present the

vision

Price /Proposal

Close Follow up

30 days – 3 Months

6 -8 Months

Demo

Cloud Sales Process

Marketing is the New SALES

Get Found Engage Convert Close

Sales Cycle 90 Days

Marketing budget: 7-10% of RevWith digital marketing taking over more of the pre-sales activities, you need to allocate more financial resources to these activities.

Digital

SEO Today

Content is King84%

of people expect brands to create educational and engaging content

Inbound Marketing GeneratesHighest Quality Leads

Direct

29.56%

Organic

42.80%

Referral13.10%

Social 5.09%

3.1.7 % of Direct Traffic (%) 3.1.8 % of Organic Search Traffic (%) 3.1.9 % of Referral Traffic (%) 3.1.9 % of Social Traffic (%)

Microsoft PartnerWebsites

Source: Neural Impact 2018

50,000 Views

Emotional Digital Engagement Model

Commoditization = Reference Pricing

Multinationals & Nationals: Market Penetration of ERP 80+% Mid Market + Public Sector 70%

docplayer.net

Progression of Value

Retrieved: March 2018, http://www.pricegain.com/en/2015/11/26/how-to-price-water/

Cost Plus Market Pricing Price Differentiation Value Based Pricing

.03 cents $2.50 $5.50 $80

Specialization

Vertical Industry

The IP Staircase – Offering Differentiation

COMPLEXITY/COST

Labeled bundles

Turnkey functional

infrastructure

Packaged

extensions

Full vertical

solutions

POTENTIAL ISV PARTNERING

DIF

FER

EN

TIA

TIO

N/V

ALU

E

Microsoft

Dynamics 365

Office 365

Etc.

Current Offering

+ Stack

Own Repeatable IP

Optimize

Specific Function

Full Vertical Solution

Business Application Revenue

21%

24%

56% Providing services

Selling Microsoft software

Own IP SW/ISV products

(n=823)

In terms of revenue, Office 365 is considered the fastest growing new cloud service in business application practice

34 C20 In your business application practice, which new cloud services are growing the fastest in terms of revenue?

Fastest Growing Business Application Cloud Service In Terms of Revenue(n=400)

2%

2%

2%

2%

2%

2%

3%

3%

3%

3%

4%

11%

20%

Training services

Email services

CRM

Business services

Security based services

Dynamics 365

Data services

Power BI

Storage/backup

Data analytics/predictive analytics

Exchange Online/Hosted exchange

Azure

Office 365

Two thirds (67%) of those offering Dynamics 365 estimate an average of less than 50 users per customer

35 R2 What would you estimate to be the average number of users per customer across your Dynamics 365 customer base?

Average Number of Users Per Customer(n=162)

13%

23%

33%

13%

17%

2%

1%

21%

26%

51%

4%

5%

23%

23%

44%

1,000+ users

250-999 users

50-249 users

25-49 users

<25 users

Total (n=162)

SMB-focused (n=132)

Enterprise-focused (n=30)

Significantly higher Significantly lower

BICompliance, Reporting

Telematics (in-vehicle telecommunication devices)IoT devices and wearables (Fitbit, Apple Watch etc.) track customers in order to predict and calculate risks

New Global Markets – 40 Regions+

62% of partners saw an increase

in services revenue post-transition

to a subscription model

28% Less than 20% decrease

Cloud Subscription License Revenue

Project Services

12%

34%

26%

23%

5%

15%

49%

17%14%

6%

100% one-time project based 75% project based / 25% recurring

revenue based

50% project based / 50% recurring

revenue based

25% project based / 75% recurring

revenue

100% recurring revenue

50% of SMB Partners have 25% Recurring SERVICES Revenue

SMB

Shift From Time & Materials to Packaged Solutions

Utilization Rate

Traditional Services Project Implementation

System setup

Analysis and design

Development and configuration

Internal testing

Consulting Performance evaluation monitoring and tuning

Develop a set of KPIs and measurements.

Business process evaluation and improvement

Pre-blueprint (review customer business processes)

Expert visit

PMO services

Go-live readiness – production roll-out plan, user training and subsequent user support

Change management

Services

$

$

$

$

$

$

Consult Design Implement Integrate Maintain Manage Adopt

Project

Services

Optimization

Services

Selection

Services

Services Offers - Future

Simplicity vs Complexity

No more risk!

Retrieved: April 2016, Michael Doane

43% projects late or over budget…33% cost overruns (Gartner)

https://blog.coryfoy.com

Offload onto customer

Invest in tools

Repeatable customer funded development

Accelerate Deployment

Migration = Emotional

Migration Pricing

Customization & ImplementationHardwareIT PersonnelMaintenance (20%/yr)Training

Ongoing costs:

Applying patches/upgrades

Downtime

Performance tuning

Rewrite customizations

Rewrite integrations

Maintain/upgrade network,

security, database

80% of IT costs are after initial purchase (Gartner)

Churn Rates

Source: Microsoft ISV to SaaS Practice Development Study, MDC Research, February 2018

Renewal

https://neuralimpact.ca/directions2019/

Evaluation