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Salesnet Soaring in SFA

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Posted January 3, 2002 By Allen Bernard     Feedback

The Boston-based safes force automation ASP says it won't play 'the numbers game,' but it does claim 8,000 percent growth - yes, 8,000 percent - in 2001.

If its published numbers are correct, sales force automation ASP Salesnet may be on the verge of becoming one of the most successful ASPs in the industry.

According to its third quarter press release, Salesnet grew a staggering 8,000 percent in 2001 and has about 5,000 customers although the company would not give exact numbers.

"We're not playing the numbers game," Donna Roveto, communications manager for Salesnet told ASPnews. "Were trying not to do that. We really don't want to get into that game."

Roveto, however, did say the 5,000 customer count reflects the number of customers the company has landed since its 1997 inception and that the actual number of active customers today is less than 5,000. She would not give further details.

According to Michael Doyle, Salesnet's president and CEO, the growth numbers are accurate.

"Suffice to say, the company's grown dramatically on the revenue side," he told ASPnews. "We, as a company, have never believed in giving away our software so we've always charged our clients for it. And we've never had free demos and free pilots. If people weren't willing to pay for our solution then we didn't feel we had communicated a value proposition to them."

At the Heart of Salesnet
Salesnet offers an SFA solution based on the best practices of top salespeople across many organizations that takes its users through a customizable step-by-step selling process. The solution is wrapped with added functionality like both customizable and standard reporting features, an outbound marketing campaign manager, a lead-tracking system and sales forecasting tools. But its heart is the sales process engine.

"What it does is act as a virtual sales coach," Doyle said. "That's the guts of the application. It was always designed as a Web-enabled application; always designed around a process engine and that is what has resonated with the enterprise customers."

The company focuses on four verticals — high tech, life and health sciences, telecom and financial services — and charges an average of $49.95 per-seat-per-month. However, Salesnet will be raising its basic price to $99.00 per-seat-per-month beginning this month.

Doyle said the company has many clients hosting an average of 300 seats each and one customer with more than 1,000 seats. In Salesnet's case, one seat is equivalent to one salesperson. Its top five customers host a combined 3,500 seats and its average customer has revenues of more than $50 million.

"We've got a smattering of smaller companies that use our product, but our direct selling efforts are focused on large enterprise customers," Doyle said.

Enterprise by Accident
This focus on the enterprise market actually occurred as somewhat of an accident. Like many early ASPs, Salesnet's founders thought smaller companies short on IT resources would be the market most willing to adopt its services. After investigating its sales cycle in early 2001, Salesnet found its efforts to woo these clients took as much time and effort as an enterprise account and were not as financially rewarding.

Salesnet
At a Glance
  • Headquarters: Boston, Mass
  • Founded: 1997
  • Clients: 5,000 (since inception)
  • Main business activity: Sale force automation
  • Target market: Enterprise customers

Partners:

  • Software: Microsoft, zapdata.com
  • Infrastructure: Cisco, Exodus, iConverse
Funding:
  • Privately held

These findings, combined with continued, unsolicited inquires from enterprise clients about its product, led Salesnet to change its marketing focus away from small clients.

"Originally, what we were doing was focusing, just like all the other (ASPs), on the small businesses," Doyle said. "We had a bunch of 'squirrel hunters' out harvesting those relatively small companies and, on a fairly regular basis, we'd get enterprise customers that would call us inquiring about our product ... and it kept happening with a lot more frequency so we decided to focus on that from a direct (sales) standpoint."

Although the company still employs a small-account direct sales force and uses value-added resellter (VAR) channels, its focus on the enterprise has paid off. The company includes among its enterprise clients American Express, British Telecom and Tellabs.

In fact, much of its new business in the last six months has come from existing customers adding more seats, Doyle said.

Because its solution supports 38 wireless PDA protocols and all wireless application protocol (WAP) enabled phones, the company is also putting together deals to supply major wireless providers like Research In Motion (RIM) — the parent company of Blackberry wireless — Palm and Acer with its services. The RIM deal is closed and negotiations are ongoing with other wireless providers, he said.

Why Is Salesnet Selling?
So, how has Salesnet been able to succeed in a market plagued by slow adoption rates? According to Doyle, the answer is Salesnet's functionality, reduced corporate IT spending and greater acceptance by enterprises of the basic ASP value proposition.

Compared to in-house applications like Siebel, which can provide similar functionality, Salesnet's solution is one tenth the cost, takes one tenth the time to deploy and, because clients only use the bare minimum of functionality of more complicated in-house solutions, is 10 times more powerful, Doyle said.

Also, with the drop in IT spending this year, selling a hosted solution that shows up on the bottom line as an expense rather than a capital investment, requires, in most cases, the okay of just one person rather than a host of decision makers. "With our product we've got to sell one guy, the VP of sales."

World events of late and a general acceptance by corporate decision makers of the basic ASP value proposition, have also helped the company make sales, said Doyle.

"We're finally at a point with the evolution of our products that a lot of people are realizing the value of it," he said. "We are absolutely seeing a shift from client/server to ASP. And ... since Sept. 11, most companies have got to have remote data hosting; that fits in real well with the value proposition that we're offering."

Reprinted from ASPnews.com.

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