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Any SaaS CEOs who are feeling bruised after reading Sarah Lacy’s Business Week article today on the brutal slog of on-demand computing may take heart from the story of a SaaS vendor that told me this week it has cut its customer acquisition costs by a massive 80 percent. There’s a catch, though: abandoning the browser was the key to achieving this remarkable turnaround.
SaaS CRM vendor Entellium this week released a new smart client version and said it will phase out its existing browser-based product over the next 12 months. It’s doing so, I can exclusively reveal, because of business metrics (which I’ll quote below) that show its smart client product — called Rave — achieving some kickass conversion and retention rates in the past year since first release [disclosure: Entellium is a former client and I have a small investment in the company].
Like its browser-based predecessor, Rave is still based on a fully hosted, multi-tenant application infrastructure-in-the-cloud, but the user experience executes on the desktop using Microsoft’s Windows Presentation Foundation (WPF). That has allowed Entellium to pioneer an approach to contact management and sales and marketing automation that’s tailored to the get-things-done needs of the small businesses that make up its target market.
Three characteristics in particular combine to make Rave stand out against other on-demand CRM packages in the market:
Maybe it’s the results-oriented mentality, maybe it’s the ‘gamer-influenced design’ or maybe it’s simply the familiar process of receiving a digital download when you hand over your cash. Whatever it is, Entellium has found that Rave has transformed its cost of customer acquisition.
Entellium’s CEO Paul Johnston has given me a private peek at a string of metrics collected over the past year of selling Rave and the difference is stunning. It’s proving three times easier to close prospects on Rave than it was on the browser-based version, with two in every five prospects closed. The sales cycle is twice as fast, down to an average 11 days. Churn is down massively to low single figures. Win rates against Rave’s main competitors, Salesforce.com and ACT, are above 90%. And most tellingly of all, the direct marketing cost to acquire each customer is a stunning 82% lower, at less than $1,000. Not surprisingly, Rave has now overtaken the browser-based eSuite product as a percentage of new acquisitions.
Johnston ascribes a large part of Rave’s appeal to its downloadable client. “The smart client approach enables a SaaS distribution model you can’t replicate with a browser-only product because [with a browser-based product] there is nothing to ’ship’,” he explained. Entellium will exploit that advantage, using digital retailers as its core distribution channel for Rave.
Interestingly, the realization that the client download was the key element in Rave’s better close rate came through experience of selling the product rather than any advance plan. But once it became evident, it became a no-brainer to phase out the existing browser-based product in favor of a new Rave version, introduced this week. Existing eSuite customers will have a free migration path and are able to use Rave in parallel with the old interface, allowing them to move users across gradually. All will have to have made the move within the next twelve months, when the old interface gets turned off — although the browser will still be used for certain functions.
“The industry is somewhat ‘deer in headlamp’ about the browser,” Johnston told me. “Our assessment is that there is a role for the browser but it is a minimized role. We do have some task- and role-specific functions that will be delivered in the browser when rational use of a browser makes sense.” Examples include a systems administrator setting up users or a CEO quickly checking static metrics in a dashboard. But the core application needs a smart client, he said. “What we wanted to do for the CRM experience could not be delivered purely through the browser.” (Screenshot below, but as I mentioned above, a static image hardly does it justice).
This week’s announcements comprise two versions of Rave CRM, both available now, plus several add-ons:
What Entellium has achieved with its Rave sales is of course more applicable to the small business market than to larger enterprises, which produced most of the examples in Sarah Lacy’s Business Week article mentioned at the top of this post. But at least the Rave story is evidence that the on-demand sector is not all doom-and-gloom. I’ve got some other upbeat SaaS news coming next week too, so on-demand vendors shouldn’t lose heart yet.
posted by Phil Wainewright
July 18, 2008 @ 3:30 pm
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