When selling yourself as faster and cheaper is no longer enough: Part 2

By Francis Moran and Leo Valiquette

In Part 1, we introduced Host Analytics, an enterprise software vendor that delivers a suite of corporate performance management (CPM) tools through a software-as-a-service (SaaS) model. We discussed how the company initially positioned itself as a “faster and cheaper” alternative to established competitors such as Hyperion – a vendor later acquired by Oracle from which many of Host Analytics’ founders had come.

By the late 2000s, Host Analytics had come to realize that its initial value proposition no longer represented the firm’s true value and wasn’t supporting its position as an emerging market leader. It needed to rebrand and reposition itself and take advantage of the fact that SaaS had begun to go mainstream as a delivery model for many enterprise applications and had found greater acceptance among finance professionals.

In early 2009, Ken Rosen, a corporate strategy and marketing consultant with Performance Works, engaged with company CEO Jon Kondo and VP of marketing Keri Brooke to determine the next step in positioning and marketing strategy. It quickly became apparent that old market assumptions could no longer be trusted.

Host Analytics embarked on a four-month program that included a sophisticated survey designed to get past trite answers and root out respondents’ deep-seated views on their jobs and their roles in their organizations. It started with penetrating, one-on-one conversations with dozens of customers and potential customers to uncover the most critical concerns and desires. It then validated these findings by targeting 30,000 decision makers, including VPs of finance, controllers and CFOs, with a survey that yielded more than 550 responses.

“This was a watershed moment for Host Analytics to decide to go ahead with something like this,” Rosen said. “But Jon and Keri realized the market was changing. Their company could no longer move ahead based on market assumptions that had come out of the relatively small number of companies capable of deploying a massive Oracle system. They needed to expand the market to deliver a new wave of growth while obviously keeping current customers happy.”

Business partner, not a bean counter

Four compelling themes emerged from the interviews and survey:

  1. Senior finance professionals want to drive fact-based decision making across the organization and identified this as a core objective of the job. They want everyone in the company to understand the financial risks and rewards of decisions.
  2. Finance professionals want a seat at the table for all significant decisions. They are not attempting to dominate other departments, but act as a peer among leaders at critical moments. While finance is always at the right hand of the CEO for financial decision making, this function within an organization is seldom involved in operational decision making. When it comes to marketing, sales and other business development activities, it typically has little more than budgeting role.
  3. Finance professionals want to offer increased visibility into their organization’s overall performance at any given time. This focus, while more passive than those above, is the one most often associated with the category of corporate performance management.
  4. Finance professionals don’t like to buy a product from a technology vendor. They want a tool or application explained by another finance person, or at least, by someone who is intimately aware of their specific pains.

“Prior to this, Host Analytics positioned itself to CFOs as a more economical alternative to Hyperion and a more efficient and accurate alternative to spreadsheets,” said Rosen. “But in many cases, this was not compelling enough to shift a CFO from the status quo. For example, many CFOs were of the view that ‘if my staff has to put in three extra hours to generate the report I want, so what, that’s part of the job.’”

The eureka moment

The survey results, however, revealed the true pain, and frustration, of many CFOs. Ironically, the features and benefits of Host Analytics’ CPM tools lay in this sweet spot, they just had not been positioned and pitched that way to senior finance executives. It was a matter of realizing that the company’s greatest product differentiation was exactly the thing that would resonate with this group.

“Host Analytics had always pushed the idea of better decision making,” Rosen said. “Its CPM tools were designed to help operational leaders understand the financial implications of a decision ahead of time and play around with how an income statement will look when various line items are added or removed. The idea is to reduce the uncertainty around trying to estimate or project the capital and operational costs of a big project, such as building and operating a new factory. While this is simple in concept, it is difficult to do on large projects.”

When the team took a step back, looked at the results of the survey, and held those up against the existing features and benefits of Host Analytics’ CPM products, the way forward became clear.

“The meeting Jon, Keri and I had to review the data and decide on a way forward literally lasted all of 15 minutes,” Rosen said. “Everyone was on board with how sales, marketing and product development had to work together to reposition and rebrand the company.”

Driving fact-based decision making across an organization and giving senior finance professionals a more strategic seat at the table for critical decisions became the core elements of the company’s new brand identity. Its new tagline is simply “Decide.”

Ironing out the kinks

The new messaging was first introduced in high-level presentations to analysts at finance conferences and among various new audiences not already familiar with Host Analytics. At the same time, there were the obvious logistical challenges of reflecting the new focus with a new logo, and distilling the new messaging into marketing collateral.

Significant time was needed to translate that marketing message into an effective and suitably segmented sales message.

“We had to expand the message to include very specific differentiators and case studies and those sales tools took time to collect and disseminate,” Brooke said.

“We had to spend more time than originally anticipated socializing the messaging with the sales teams until both organizations had it in our bones. As with any fast-growth environment, much of the learning was carried out on the fly,” she added. “The challenge with any sales team is they feed their families selling messages they know from past lives. We needed them to appreciate the company and personal benefits of switching gears instead of sticking with the original Host Analytics story.”

The results

But Host Analytics has overcome these challenges and Brooke has seen the results where it matters most. She has experienced firsthand a distinct change in how responsive audiences are to the new Host Analytics. Sales staff who use the higher level customer-focused message close more sales than those who use the old “faster and cheaper” pitch line.

Not only are they closing more sales, they are securing larger enterprise customers.

“We’ve seen a big increase in the selling price of deals, the size of the client organizations, and the level of the decision maker who wants to talk with us,” Brooke said. “And it’s due to the strength of that message of how we can help them become more of a business partner with the executive team of their organization.”

In the fiscal year after the new messaging and branding was implemented, Host Analytics’ revenues grew 250 per cent and have doubled again in the last fiscal year.

“Our market, meanwhile, is growing at a rate of 12 per cent,” Brooke said. “Even SaaS CPM, the fastest growing segment of the market, is growing at only 20 per cent a year. So we are growing five times faster than the fastest growing segment of the market.”

To Rosen, the results are gratifying, but not surprising.

“Even companies with the most consultative sales process – teams who work every day to listen to customer needs – simply cannot uncover the most deep-seated pains, hopes, and aspirations of customers,” he said. “This is because the customers themselves are on guard in selling situations and unwilling to truly expose what matters to them. It takes a non-selling, probing, often surprisingly personal discussion to get executives to open up. Host Analytics embraced an approach to get to this deeper truth and lever it in the market.”

This is the fifth article in a continuing series that will feature case studies and anecdotal stories from entrepreneurs, consultants and veteran marketers about their efforts to develop, implement and measure marketing programs to bring technology to market and grow market share. We invite your feedback.

Francis Moran
Francis Moran
Francis Moran is principal of Francis Moran & Associates, a consultancy that provides business-to-business technology ventures with the strategic counsel required to make their innovations successful in a highly competitive marketplace. Francis can be reached at [email protected].

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