SaaS vendor quits browser to boost sales

SaaS vendor quits browser to boost sales

Summary: SaaS CRM vendor Entellium is phasing out its browser-based offerings in favor of a smart client version that it says sells faster, better and at one-fifth of the marketing costs of the old version.

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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.

Rave CRM logoSaaS 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:

  • Liquid interface. Rave fully exploits all the client horsepower that WPF delivers, and the ease and visual feedback when rearranging information on the screen has to be seen to be believed. I've pasted a screenshot below the jump, but a static image just doesn't do it justice. This is the first on-demand product I've seen where the client interface is so fluid, you need video to really convey how it looks. The purpose is not to look 'cool' though, it's so sales users can organize the screens how they want them and get down to work as fast as possible.
  • Gamer-influenced design. The product borrows proven techniques from games software — but again, the intent is serious not frivolous — to get users started quickly and keep them engaged. For more on this, see my post from April last year, Gaming comes to business software, plus this New York Times article on Why Work Is Looking More Like a Video Game.
  • Results focus. The entire user experience is built around the core premise of "How should I spend my time most profitably?". For example, a new analytics module lets users compare key metrics to industry benchmarks to help decide where they most need to focus attention.

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).

Screenshot of Rave homepage showing leader boards

This week's announcements comprise two versions of Rave CRM, both available now, plus several add-ons:

  • Rave Plus targets small businesses with typically 3-4 sales reps and provides contacts and prospect management. It has an annual subscription, paid upfront, of $288 per user.
  • Rave Complete is a full sales force automation application, providing lead capture and management for a team of up to around 20 sales people. The subscription is $72 per user per month.
  • Rave Insight is the analytics add-on, which comes included with Rave Complete
  • Rave Integrate is an implementation of Boomi's on-demand integration product, providing point-and-click integration to common small business packages such as QuickBooks.
  • Rave Marketing is an optional add-on to Complete, providing email campaign execution and management.
  • Rave Care is another Complete option, providing incident tracking for customer service functions.

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.

Topics: Software Development, Browser, Cloud

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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15 comments
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  • Rave Webinars & Free Trials

    I'm a consultant with Entellium and would encourage anyone interested in checking out the new Rave to join us for one of our webinars (5 days a week) or to download a free trial.

    Phil is absolutely right when he says, "the client interface is so fluid, you need video to really convey how it looks."

    Here's a link to register for a webinar:

    http://www.entellium.com/rave/learn-about-crm/webinars.aspx


    Cheers,

    J
    jwix78
  • No slant here...

    Maybe I'll start writing articles on the companies I have investments in so I can improve my positions. This site just keeps going from bad to worse.
    happyharry_z
  • So SaaS is running out of gas?

    And also, software + services seems to be its best hope. The irony of ironies. :-) I guess that means we'll have to wait a few more years for a new round of "Microsoft is dead! Microsoft is dead!" chants. Oh well ... I'll mark my calendar.
    P. Douglas
  • Key to the story is

    Utilizing client side computing power, and utilizing as much as you can get. Why limit yourself to HTML/JAVASCRIPT laughing stock while you are using a multicore CPU? With hardware becoming cheaper and more powerful, you don't let an inadequate browser to get in the way.
    LBiege
    • Not a good point

      Is this app really needing to use all this horsepower? I highly doubt it. Who wants to download some possibly unknown app to a windows only computer to make it run. People are becoming more suspicious of anything that requires an install onto their computer. Then you go to another computer -- need to download that app again. Got a mac or a linux box -- too bad. Unless it's a killer app, browser-based is the way to go, especially if you're trying to get people to adopt a new service.
      K B
      • Benefit of Standards-based UI out the Window... great...

        Agree with KB on this...

        I bet RAVE looks/works fantastic on a mobile device - if it runs this environment. So much for the mobile salesforce!

        And leaving Mac and Linux off the table in 2008 is just insane. Haven't we learned anything about market share? You want FEWER barriers to entry, not more.

        Use Flex or something that has multi-platform properties if you want to break out of the limits of the browser.

        And for CRM... to make sure I'm following this - Salesforce.com, THE poster child for SaaS-success must have it all wrong then, eh? Browser-based access from anywhere, nothing to install, hmm, yes, clearly CRM can't be done with all of the limits of browsers. The Web 2.0, Office 2.0 and Enterprise 2.0 movements, also wrong. Google's entire enterprise application play, wrong as well.

        Oy vey! Thumbs down on this post.

        Maybe the business metrics warrant the move to non-browser based implementation, but I wonder how long lasting that bump in sales will last.
        dankeldsen
        • What about Gears?

          > Google's entire enterprise application play, wrong as well.

          Actually, Google developed Gears to be able to do more locally on the client. So I don't believe Entellium's architecture is as awry as you make out. Sure, Gears is cross-platform, the lack of which is a flaw in Entellium's strategy at present, but that can be fixed in the future.
          phil wainewright
  • I Still ....

    think if someone came up with a REAL terminal emulator that could display graphics they would rule the world.
    Linux_4u!
  • A Raving Ad?

    This seems less like a suggested "solution" for development companies and more like an ad for Rave. I was more interested in the 3 things the article DIDN'T say:

    #1. No Cross-Platform Interface.

    While utilizing a combined approach of desktop application and SaaS may result in some added "oomph" in the interface, you lose one of the HUGE benefits of most SaaS apps: being able to run the application in any major browser on nearly any operating system.

    While I personally use Windows, I know that there are plenty of people out there that would miss out on the "fluidity" of Rave's interface because they run Mac or Linux operating systems, or may not run a version of Windows that has that particular framework installed yet (or maybe CANNOT be installed because of security restrictions).

    #2. Suspicious Cost Savings.

    I'm also doubtful of the idea that they've saved that much money in customer acquisition just by a switch of architecture, unless the old architecture was REALLY REALLY bad (in which case, they saved money by an increase in product quality, not a change in architecture)! Either that, or their customer acquisition strategy changed around the same time... any way you slice it - it doesn't make sense to link those two things together. Maybe I'm just missing something, though.

    #3. No Additional Costs?

    I'd be interested in knowing the INCREASE of Entellium's costs - the ones that normally come with supporting traditionally-installed software. And if they're planning on selling to more than just Windows users, there has to be a cost in RE-developing the same interface, training materials, etc, for other systems.


    That said, there's a time and place for everything, and if Entellium has found a way to work it, more power to them. I'd like to see more balanced information about their approach, though - not a biased blogvertisement from one of their investors.

    In the meantime, SaaS is not "out of gas" as someone else suggested. There are many companies that are doing SaaS right, and are enjoying their own success as well as enjoying seeing the success of their customers.
    jhilgeman
    • Good points, not an ad

      Thanks for bringing up some important counterpoints, however I note that you criticize me for bias without even disclosing your own affiliation.

      I've written about this company because I believe what they're doing is distinctive and of interest to readers, not because I hold a small investment. I've given it the same treatment I give any SaaS pureplay I write about here (ie, present the vendor's perspective along with some thoughts of my own) and in addition I've made full, upfront disclosure of my relationship.

      If you would prefer me not to write about companies that I work with, then this blog will have to miss out some of the most interesting stuff going on in the SaaS space. I don't think that serves my readers.

      By the way, I do happen to believe (independent of my relationship with Entellium) that SaaS will have to go to smart client architectures for a variety of reasons that I'll be summing up in an upcoming post. But thanks for highlighting some of the challenges inherent in making that work, in particular cross-platform compatibility and client support issues.
      phil wainewright
      • Noted

        I'll stay posted to hear about your views on the smart client architecture.

        Sorry - I was not intending to hide my bias. I currently work for a SaaS company, and I've also worked for and with other SaaS companies in the past. I've seen a lot of different implementations, so I've seen some of the right ways and wrong ways to do it. That's my background. Nothing special.

        I'm new to your blog, but my first impression was that it felt like a blogvertisement - and that's just not a fact, it's just my honest opinion. It seemed more about pushing people to check out the video of their interface (a sales step) than describing the mechanics... or more importantly (per the title of the blog), how "quitting the browser" boosted their sales.

        Disclosing your bias upfront, while an ethical part of writing (and appreciated), doesn't change the way the actual content of the article.

        If you do respond, I'm still very interested (honestly - not sarcastically) to hear details about the direct relationship between quitting the browser and the boost in sales.
        jhilgeman
        • How quitting boosted sales

          Thanks for the feedback. I see how the tone may have been misleading to a new reader. Actually there is no video on the Entellium website that shows off the UI - which anyway is more of interest to us geeks than to their target demographic. What I was trying to convey was that the interface is so fluid that you have to see it in motion to really appreciate it.

          As to how quitting boosted sales, I see two significant factors:

          a) The ability to deliver a digital download makes the buying process identical to buying a conventional software package and therefore there's no additional step during the sales cycle where the vendor has to explain to the customer why the process is different. Although it sounds like a minor point, Entellium has found that it's a big additional stumbling block when selling SaaS to small businesses and that having a download significantly shortens the sales cycle and ups the close rate.

          b) You were right in your earlier comment when you conjectured that Rave sells better because the browser-based version was not as good. But a large part of what makes Rave so much better is down to the things it can do because of the smart client. Entellium knew they needed to do a better job with the user experience, but wanted to do things that aren't possible working solely in the browser.

          By the way, entellium is not the only CRM vendor to have moved to a smart client UI. RightNow did last year, which I wrote up here:

          http://blogs.zdnet.com/SAAS/?p=466
          phil wainewright
          • Maybe They Need a Better Sales Pitch

            Hmmm... Interesting - some follow-up thoughts:

            a) If their sales people are finding it easier to explain a hybrid system (both traditional software AND SaaS) than a simple SaaS... then they might have benefited from a better sales pitch. :)

            b) There's actually quite a lot that you can do with browser-based technologies, in terms of functionality. That said, I would believe that their smart client is more fluid, given the relatively slow processing of Javascript and AJAX needed for equivalent functionality in the browser.

            So has Entellium disclosed any sort of other cost increases?
            jhilgeman
  • RE: SaaS vendor quits browser to boost sales

    Interesting take on the browser. The next generation SaaS applications need smart browsers or smart clients that effectively utilize the HorsePower of the workstation. Traditional based browsers are dieing on the vine and we are beginning to see disruptive technologies in the web browser space.

    The article in business week seems a little out dated, if you are an IT department today facing enormous demand with a huge backlog, SaaS applications could drive real value in your organization.
    lonniewills
  • RE: SaaS vendor quits browser to boost sales

    Phil, like some other readers, although I'm interested in what Entellium has done, I can't see the link between selling a smart client and the benefits that Entellium have reported.

    (FYI: I run a hosted Microsoft Dynamics CRM business in the UK).

    For example:
    * 3x easier to close - probably can be attributed to a better looking client (but this could be a factor of the looks of their previous, browser-based client)
    * Sales cycle down to 11 days - vendors don't have a sales cycle, customers have a buying cycle. If the decision maker goes on holiday then having a WPF-based client isn't going to force a decision while that person is on holiday.
    * Marketing costs 82% lower - how? Does Google offer an 82% discount if your adwords are for a smart-client? Does ZDNet charge 82% less for banner ads? Do marketing agencies work for a pittance if they're freed from browser-based creative work?
    * Something to download - geez, if having something to download really encouraged sales, I'd ask all my customers to download IE8 (although Microsoft CRM and salesforce.com both offer downloadable plug-ins for Outlook integration and this has no discernable impact). Please don't tell Amazon or eBay that forcing customers to download a proprietary Windows client instead of using a web browser will boost sales!

    I'm looking forward to Microsoft using next gen UI technologies in 'CRM 5.0' (as they have done with Dynamics NAV 2009, although I personally hope it's Silverlight rather than WPF). And fingers-crossed they, at long last, introduce cross-platform, cross-browser support.

    Thanks for declaring your Entellium stock holding, Phil. But I think the article lacked logic and a counter position, not a disclosure.

    Neil
    www.increasecrm.co.uk
    NeilBenson