If you look at human beings, there is one thing and one thing only that we all have in common: We want to be happy. To each of us, the idea of happiness is different, how we choose to achieve it is different, and the divergences and convergences on our individual paths to happiness are different. What this means is that each of us seeks our own path in the journey toward happiness, with the idea of being happy all along the way there -- wherever "there" happens to be. To put it in a single statement, all humans are self-interested.
What that means when it comes to business acumen is that you have to be aware of what a customer wants, and give them what you are able to give in order to make them happy -- but within the constraints that govern you as a company, be they budgetary, time, or regulatory. To translate that practically, it means that if you are a technology company, you have to be able to identify what you offer that your customers can use to get the outcomes they need to achieve their goals. This means your salespeople have to be savvy enough to understand that when they are in front of a buyer, they not only have to sell from the standpoint of the value to the buyer's company, but to the buyer's needs as well. It also means that your marketing has to be focused on the outcomes that you would expect your likely buyers to be looking for.
Why is this meaningful? Let's find out.
Last time, we looked at the $86 billion Microsoft. Now, we're looking at the smallest of the Elites: PROS. If you remember, in the '60s, there was this book and movement (of sorts) called "small is beautiful". PROS is exactly that. Though nearly $200 million isn't that small; only by comparison with the other three elite brethren.
But it is beautiful.
Let's have a go at PROS.
The best way to describe PROS is as a shining star with a tad of blazing comet. This company, which positions itself as a big data company that provides prescriptive and predictive analytics to give customers what they need for effective pricing and sales efforts, turns out to be a well-planned, effective, high-touch, smart company that understands self-interest perhaps better than any other company I ran across in the course of the Watchlist this year. Two examples should be sufficient to prove this.
First, and least interesting of the two, is that it has defined a well-thought-out, persona-based marketing and messaging strategy. In the worlds of pricing and sales effectiveness, PROS identifies the obvious two personas. It has a pricing persona focused on the needs and outcomes desired by VPs of pricing (if such a title exists), pricing managers and directors, general managers and SVPs of business units, etc. Sales personas are represented by a focus on the needs and outcomes required by VPs of sales and VPs of sales operations. The very fact that it has a complete library of marketing and thought leadership assets associated with each of these personas -- and distinct associated messaging -- indicates that it is trying to sell to a self-interested individual who not only has the corporate good in mind, but also his or her own career. This is very smart.
Far more interesting is its representation in the Watchlist submission of how it helped the careers of the buyers at its customers, with an impressive array of internal customer promotions that are at least partially due to the success of the PROS implementation. It was the only company that did this out of all 142 submissions, once again showing in a far more vivid way that it understands that to succeed in business, you not only appeal to the corporate buyer's corporate requirements, but also to the buyer's personal needs and outcomes.
What it does so well is fully integrate its efforts with its thinking. Everything it does and has is aimed at engaging both new and existing customers and new and existing employees.
The other proof point of its inculcation of this perspective is in its exceptional culture. If I had to characterize its culture with a single word, it would be "outreach". Its outreach to employees means tying all the employees in all the geographies together via its corporate newsletter and campaign #LifeAtPROS and three-day all-hands meeting every January -- which means 1,000 employees this year. It means individual recognition of its employees through birthday celebrations and awards and kudos that go out to the entire company. It means wellness programs and free flu shots. It means employee-focused family events. You get the employee picture, n'est ce pas?
But it goes so much further than that. It also means community outreach -- the social philanthropy that best-in-class companies practice coupled with the honest desire to do good, rather than just look good. PROS works with multiple charities, ranging from races for cancer research and food banks to tech camps to provide skills and equipment to the underprivileged. It is Houston based, so a lot of it is local -- and it is extensive.
For a company of its size, it also seems to get the partner thing right, which is no small feat. The scale of its partners -- Accenture, Deloitte, IBM, Acumen, CGI, and Capgemini, among others -- shows that it has been seen as something that will be worth the partner's time. If I had to give PROS a place, I would call it a solid ecosystem play. It provides something that is needed by practitioners, and it is one of the best, if not the best, at it.
Its sterling product portfolio is what makes it coveted. It provides all the pieces necessary for sales and/or pricing effectiveness using solid analytics tools. For example, it has a product called, rather boringly, Scientific Analytics for Sales, which has anything but a boring purpose. It uses contemporary data science to ID patterns of customer purchasing and willingness to pay. The benefit? It IDs the highest-value dues with the best possible results. Then it has Sales Optimizer -- also a bit of a snoozer of a name -- but what it does is high caffeine. It identifies the best opportunities and the appropriate target customers, and estimates (best guesses) what they will pay. Finally, Negotiation Guidance does as it is named: Provides proscriptive advice on how to negotiate the deal once it is in the closing stages.
It has equally valuable pricing applications. It is able to develop an optimized pricing strategy based on demand, supply, and market -- something unlike any other company that I've run across. The other solutions that I've seen so far (not done yet) are less context aware than the PROS solutions.
Its latest acquisition, Cameleon, added CPQ (configure, price, quote) technology to its portfolio. I can't speak to the applications themselves, as they are new to PROS (late 2014), but I can speak to the market they address. This one is a great addition, and puts it in the cross hairs of a number of competitors in this space, among them Oracle, IBM-Sterling, Selectica, TDCI, and many others. So there are some caveats, though it bought a solid player in the market, according to Gartner's CPQ Marketscope.
What becomes apparent is that PROS is a leader in a niche market and beginning to bust out into a much larger set of markets. The niche market is precisely what it provides -- pricing and sales optimization. But it is now starting to play in the larger CRM and sales technology market, as well as the market that is being framed by data science, analytics applications. I'm seeing it begin to make the kind of waves that I last saw with Xactly. It is starting to exceed the boundaries of its niche to get to broader market acceptance. There is only more of that in the future.
But, of course, that doesn't mean that it can rest on its laurels. It has a few glaring things that have to be taken care of that will only help it increase its impact.
Make its vision statement visionary, not self-serving
Its vision statement as it reads now is: "To be an engine of prosperity so indispensable that companies around the globe would never imagine running their business without us." That's not a vision statement, that's some sort of corporate objective. Vision statements are just what they seem to be -- a forward-thinking statement about the world that you want to help create and that you want others to buy into.
Let's go back to last week, and EY Advisory's brilliant and simple vision statement: "Build a better working world." That's a true vision. PROS' vision is a somewhat self-aggrandizing statement that says what every business in the world wants: "We want to be #1." The only response I have, honestly, with no disrespect intended, is "so what?" Why would I, someone who doesn't work for them, buy into that? The simple answer is that I wouldn't. PROS needs to be more expansive in its thinking about its own vision. There is a difference between a dream and a vision.
Sub-industries? What the...?
This is a company that services 40 verticals. That is a powerful statement of incredible success. No joke. Its target vertical industries, its deepest strengths, lie in, among others, high tech, automotive, chemicals, manufacturing, and food. For some reason that is honestly beyond me, it insists on calling anything but its specific target verticals "sub-industries". So, for example, it calls petroleum oil and gas a sub-industry -- of chemicals, if I ventured a guess. That's fine if you want to make a technical case for it, but the problem is that no one else in the technology world calls oil and gas, insurance, agriculture, telecommunications, etc, "sub-industries", and all it does is create market confusion.
Just call them what everyone else (rightfully) does, which is verticals and industries and vertical industries, and leave it at that. Or, if you are going to call them sub-industries, you'd better convince the world that this is the proper terminology. That fight, my friends at PROS, would be a waste of time and effort. This isn't a big deal, but it merits the change -- which is as simple as taking out "sub-".
Get a lot more serious about transforming analyst relations
A year ago, I said it needed to get away from its rather old-school approach to analyst and influencer relations. In its submission, it claims to have "heard [me] loud and clear", yet there is little sign of any actual progress in that area -- in fact, so little that I would have to classify it as none. For a company of the quality of PROS, this is perhaps its most serious mistake, because it is not engaging the very people who are transmission belts for exposure to markets and who are conduits for the feedback and information that this excellent company needs to step up its presence and get to the next level. More than most other companies, because it is specialized yet has broad appeal to multiple markets, this is something it needs to do as a priority in its thinking.
We are talking about a rock star company on the rise. I don't see a downside -- and that's saying a lot. With a few tweaks, it will soar to the next level. Don't, and it can coast at this level to success. But is that what it wants? I don't think so.