Demos and trials new selling tactic for SaaS

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Software-as-a-service (SaaS), a new way of offering business software, also has a fresh take on marketing.

Long gone are the closed-door meetings and interminable sales cycles used for multimillion-dollar enterprise applications. SaaS firms instead are borrowing a page from consumer marketers and providing as much information as they can about their product, partnering with other well-known business-to-business firms for co-branded promotions, and employing branding techniques to market their product's value.

SaaS is software that is hosted online by its manufacturer. Customers pay a monthly fee - typically anywhere from $10 to $100 a month - which includes not only the ability to use the software but also IT support and any updates. Enterprise software, the kind most businesses are familiar with, usually involves one upfront fee that includes some customizing of the software for an individual business' needs as well as installation support.

The marketing of SaaS "offers huge advantages" over enterprise software, says Mike Fitzgerald, managing general partner of Boston-based venture capital firm Commonwealth Capital.

"Moving an organization these days is a big issue," he says.

However, by selling a company access to one program for a relatively small monthly fee, the company gets a chance to try it and see if it likes it. Using this strategy, SaaS firms "can very quickly get this stuff adopted in small increments" Fitzgerald explains.

Looking to encourage initial trial, Citrix Online, which offers the on-demand applications Go to Meeting and Go to Webinar, launched an integrated campaign earlier this year that employs "branded direct response," according to area VP of customer acquisition David Baeza.

Previously, the company's marketing efforts had employed an aggressive call to action. However, after customer research indicated a desire for less of the "buy it now" messaging and more about the value these services provides, Citrix reworked its entire marketing push.

The new campaign features the tagline "Do More. Travel Less." While ads offered a 30-day free trial, overall the call to action was toned down compared to previous efforts.

Starting in January, Santa Barbara, CA-based Citrix ran full-page ads in the Los Angeles Times, Chicago Tribune and other major newspapers as well as radio ads, online banners and a search campaign.

"This is the most successful campaign we've had to date," Baeza says, pointing to the fact that sales for Go to Meeting have grown between 30 percent and 40 percent this year. The company is currently in the process of refreshing the creative for the next year.

Procuri Inc., which markets on-demand supply-management solutions, has also tweaked its marketing efforts to drive trial.

About 18 months ago the company eliminated all print advertising from its marketing plan and began focusing all of its efforts online.

"We're finding that we're getting a much greater return on our online investment, plus it's much easier to track and makes it much easier to put together a report at the end of the year that we can provide to the CEO," says Tim Minahan, SVP of marketing at Procuri, Atlanta.

The Web is now Procuri's primary method for educating consumers about its products and encouraging them to try and/or buy them. For example, there are self-service flash demonstrations of its offerings on the Web site in addition to product descriptions, ROI calculators and other information. Even the sales team tactics have been changed by the Web. They can now walk customers through a guided tour of Procuri's offerings on its site.

With SaaS it is important to "give customers a good understanding of what they're getting in order to encourage them to press that æbuy' button," Minahan says.

The company is constantly fine-tuning its Web site to optimize its natural search results. As part of this effort, it launched a blog that currently receives 10,000 unique visitors a week.

"The blog happens to be our number-one conversion site," Minahan says.

The company has also partnered with a number of industry members to create several microsites where interested parties can find best practices, ventured into joint research programs, and published an e-book.

"We're really finding that content-driven assets have a higher download rate and conversion rate than straight online advertising," Minahan says.

IceWeb Inc., a provider of hosted Microsoft Exchange and PointShare portals, is driving trial by partnering with other technology marketers.

While the company does a lot of marketing via Google, it finds this method "fruitful but expensive," says Gary Dunham, VP of corporate development at IceWeb, Herndon, VA.

This spring, the company partnered with RIM, makers of the BlackBerry, for a campaign targeting small and midsize businesses. The companies sent out e-mails and posted banner ads offering IceWeb's e-mail service free for 90 days and free synchronization up to a company's Blackberry users.

With "hundreds of clients" signing up for the service and most staying on after the 90-day trial period, IceWeb considers the campaign a success.

IceWeb also tracks the world of technology closely to see if there are ways that the company can capitalize on emerging trends. For example, when the iPhone was released, IceWeb quickly sent out a press release indicating that the phone can be synchronized to IceWeb's on-demand e-mail.

The release was picked up by numerous technology publications and IceWeb saw its Web traffic spike between 6,000 percent and 7,000 percent in one day. "We did quite a bit of business from that," Dunham says.

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