The Web Conferencing Blog

Software as a Service Viability

The old adage of "Never outsource your mission-critical business functions or processes," no longer holds true. More and more companies are seeing the benefits of a Software as a Service (SaaS) business model. It enables companies to focus on revenue-generating activities and lets the service provider handle the product upgrades, hardware, performance and network connectivity. IT departments do not need extensive training nor do they have to worry about implementation, database configurations, or wonder if the technology with integrate interoperably with the existing infrastructure. Deployment is a matter of days compared to a matter of months so ROI is achieved that much faster.

There is absolutely a paradigm shift to the SaaS model. Even giants like SAP are moving into this space for a competitive advantage. SAP is taking the NetWeaver platform and moving their Enterprise Services Achitecture (ESA) to a services architecture. They even went as so far to acquire a SaaS company to provide added functionality to their CRM/SRM solutions.

Microsoft is another company that is trying its best to adapt to a changing world where legacy software is no longer king. A source close to me in the Microsoft camp told me that there is much confusion these days. He is told to say that their customers still prefer on-premise solutions yet they went out and acquired Placeware 2 years ago to provide a SaaS web collaboration solution. (They have not been successful in selling Live Meeting to their customers. Even their Microsoft Gold Partners opt for WebEx because of the added security (WebTrust Certification), robust functionality, and real-time communications architecture where nothing is ever stored on the WebEx network.) Instead of admitting that the Live Meeting technology is not where it should be from a reliability, ease of use, or functionality standpoint, Microsoft simply says, "our customers like on-premise solutions. They do not like and stay away from Live Meeting because all content is stored on our servers." This is 100% correct! What company in their right mind would feel comfortable storing content and company data on servers outside of their firewall? Talk about increasing one's RISK exposure.

My personal recomendation to any IT individual is to look closely at the Live Meeting solution from an infrastructure and data transmission perspective. Ask them about the "iVault server" and how and why content needs to be upload, converted and stored on their server. Ask they why they cannot support video if communications are truly "real-time?" Microsoft is a great company. I own stock in it myself and it has made me plenty of money over the past 8 years but to invest in Live Meeting simply because it is from Microsoft is foolish.

One of the most successful companies in the Software as a Service market is WebEx and Salesforce.com IDC market research named WebEx #1 SaaS provider. From the IDC Report:

WebEx is helping customers experience on-demand software delivery by providing more people with access and exposure to the model," said Erin Traudt, IDC software as a service research analyst and co-author of the report, "Recent studies have shown increased customer interest in the SaaS delivery model and web conferencing applications is high on the list in terms of SaaS adoption."

The report also states that, "IDC finds that not only are cost-savings benefits and rapid implementation times fueling overall SaaS adoption, but also intangible benefits such as increased employee productivity and efficiencies are being recognized."

I predict we will start to see more and more companies following in the footsteps of WebEx. 27 consecutive quarters of revenue growth...hard to argue against the SaaS model.

Thanks,
David Chao
The Web Conferencing Expert

How to Lower Your Overall Cost Per Lead

If you look at a typical sales force, leads are generated the old fashion way: cold calls. A few drawbacks of generating leads by cold calling: time consuming, low hit rate, lowers morale, and rejection. However, the grand daddy of them all is the overall high cost and low numbers produced from cold calling. As an example, if a sales rep's annual compensation is $100,000 a year, that means each work day, productive or not, equates to a $400 a day pay rate. Let's say a rep does 30 cold calls per day and generates just 5 solid leads from cold calling for the week. That means each call, or really each dial, cost $13.34 while the average cost per lead is a whopping $400! What happens in situations if the sales reps does not feel like cold calling, is working off a poor call list, or does not have time to cold call because of time spent servicing exisiting accounts? Sound familiar? What do you think will happen to the lead flow? Will there be enough active opportunities in the pipeline to generate closed business? Think the sales team will hit their numbers? Probably won't even come close.

Sales is a numbers game. If you disagree, ask yourself one simple question, "Would you want more leads or less leads?" You probably have a good idea of what your win ratio is and what your average deal size is. Put the numbers in the equation: (number of leads x win ratio x average deal size = revenue brought in) If you increase the number of leads, you increase the amount of revenue brought in. Simple numbers game.

One of the most cost effective ways to generate high quality leads is through online webinars. You can quickly broaden your reach, penetrate emerging markets, and capture the attention of an executive who happens to watch your event during his lunch break, never having to leave his office to hear you speak in person at a hotel conference room hundreds of miles away. Get in front of more decision makers, you'll close more business.

So here is how online webinars work...

Let's say you are a consulting firm that specializes in Sarbanes-Oxley and other Compliance-related issues. You plan to do an online webinar on "SOX and Risk Mitigation." You put together a PowerPoint presentation and include a few short video clips of customer testimonials and success stories. Then you begin actively promoting the event for about 4 weeks via your website, newsletter, partners/sponsors, banner ads, Google ads, email, direct mail, etc.

An executive sees your event and is intrigued with the topic and decides to enroll for the event. You capture pertinent contact information like name, email, phone number, company name, title and even ask some customized qualified questions. He presses submit. Boom, your first lead. You then track where the lead actually came from: Google Ads, corporate website, newsletter, referral, banner ad, email campaign, a mailer, and prioritize the lead based on his answers to your qualifying questions. If he is a C-level executive that runs a $1B company, he scores more points than a non-decision maker from a company that generates less than $1M in revenue. If you have this information, your sales team can follow up accordingly based on the "hottest" leads. You also can identify which marketing campaigns generated the greatest ROI. If more leads came from the newsletter than from the direct mail piece, perhaps more focus should be put on the newsletter since it produced better results. About now, you should get yourself in the mindset of thinking "cost effective, repeatable, measurable results." Replicate this process over and over with each event and you will always have leads.

As you can imagine, online webinars can quickly generate more prospects in a shorter time period than cold calling. The leads are pre-qualified, scored for follow up, and were generated at a lower average cost per lead compared to cold calling. For example, you target 10,000 potential prospects with a 2-3% enrollment rate which equals 200-300 registrants. There will be "no shows" but you now have 200-300 potential leads of people who filled out your enrollment form and provided their contact information for follow up. By spending around $10,000 annually for an online webinar solution with a trained Event Producer, your average cost per lead is only $20-$30!!!

You can improve those numbers by sending follow up "Thank You" letters or inviting the prospects to view a URL of the recorded online webinar. You could also post the online event on your corporate website for playback, while capturing contact information from a short registration page before the prospect views the recording. More leads and no added time or resources were needed.

Would you rather spend $400 per lead from 5 cold calls or $20-$30 per lead from 200-300 online webinar registrants?

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Thanks,
David Chao
The Web Conferencing Expert

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