CONTENTS:

PRICING AND SOFTWARE SALES ON THE WEB - FEATURE ARTICLE
Is the focus on price versus other values, bad for the customer and the supplier?

DISTANCE IS DEAD? - GOOD PRACTICE
Cambashi consultants are becoming increasingly enthusiastic about online press conferences and company announcements.

ENTERPRISE ONE TO ONE - BOOK REVIEW
The latest in a series of books by Peppers & Rogers about one to one marketing.

WEB PRESENTATIONS e-CHAT
A promising tool for sales presentations & demos?

FROM THE EDITOR......

SELLING IT TO INDUSTRY.

In this issue, we look at the influence of the web on pricing and whether it is leading to all solutions being judged liked commodities. The book review is on one to one marketing. In 'good practice' Cambashi consultants get enthusiastic about online press conferences. On a related theme in e-CHAT we look at web presentation sites - are they good enough to replace face to face presentations or demos?

Enjoy your summer vacation, we will be back with our next issue on September 7th!

Quote for today:

Winston Churchill, in a five-page letter to a friend, apologised saying,
"if I would have had more time, this would have been shorter".

FEATURE ARTICLE - PRICING AND SOFTWARE SALES ON THE WEB

In theory, a perfect market, where all information is available to all who need it and decisions are based on knowledge of this information,
should lead to purchasers always getting the best value from any deal they make. The Internet and Web-sites certainly lead us closer to this ideal, but many vendors assume that the best information to display is price, equating this to value. Purchasers, on the other hand, do not put price first, but other issues, like software and hardware compatibility, company stability, and the ability to deliver services and support. Our research says price is often the 3rd, 4th or even 5th criteria on their list.

Known Price Items

Certainly, at the lower end of the market, commoditisation has led some categories of software to become Known Price Items (KPIs) - essentially something which everyone knows and understands, like a tin of beans or loaf of bread - where indeed price is a major factor in attracting buyers. We have certainly seen this in low-cost CAD markets. This trend has also led to large price reductions in high-end software over the last few years. However, these changes were in train before the Web was seen as a realistic sales channel; Web based pricing alone can not be blamed for this trend, though it may indeed accelerate it.

Premature Commoditisation?

As more dealers start to display more software prices on their Web-sites, it encourages others to do the same, in a me-too response, ignoring all other purchasing criteria except price. This encourages purchasers to regard more software as KPI's, when in fact they require specialised knowledge to ensure the correct choice, successful implementation and continued use. Additional costs for services like training and installation are not usually factored in to the headline price, but are extra cost items. This can result in some purchasers paying the same, or more, for the whole bundle than they would if the headline price was in fact higher, with services and training bundled in.

Where the purchaser understands, all is well and good. Otherwise this is not a good advert for the industry and in the long run does little to help users get the best out of their investments, even if in the short term, they pay less, by buying the lowest price the core product. One good thing may be that dealers will be forced to learn how to cost and sell added value services, where previously they used the bundled model. Purchasers too must also understand that, just because they got these services free the last time they purchased a piece of software, they can not have both lower prices and free services. Or can they?

Disintermediation or re-intermediation?

Not only do dealers have to cope with the differing competitive practices of other dealers and changing purchasing practices, made possible by the Web, now they are finding their software development partners opening Web-sites to sell direct to end-users as well. If that is not bad enough, these sites often offer discounted software as well as services and free benefits, like discussion groups, FAQs, computer based training (CBT), utility CDs and the like. This process of disintermediation - cutting out the middleman - has been seen as a threat to their livelihood by some dealers, with some justification. So, does this spell the end for dealers?

Best Practice

The answer has to be, " Maybe not, at least, not yet". Industry best practice actually encourages the involvement of dealers in the sales process, rather than excluding them. Vendor Web-sites can provide all the support services, including software activation, ordering and even downloads, but the dealer actually sells the licence and services to the end-user and delivers all local requirements. Providing the user with all the flexibility of a developer Web- site, but allowing the dealer to do what they are best at, understanding the needs of their customers, provides a model where all sides seem to gain.

Nick Ballard

Nick.Ballard@cambashi.com

GOOD PRACTICE - DISTANCE IS DEAD?

Cambashi consultants are be coming increasingly enthusiastic about online press conferences and company announcements.

In the old days, you either travelled or took part in a telephone conference. The travelling time to information content ratio was rarely in our
favour, but this was the route to the "inside story". Telephone conferences eliminated travel time, but the absence of illustrations led to most speakers taking a surprisingly long time to make their point.

These days, there are more options. It is possible to Webcast audio, video, and presentation slides. It is possible to use the telephone in
parallel. It is possible to combine telephone with pre-distributed announcement materials.

During the Webcasts described below, we switched off the Web spiders that maintain the Web index databases that our research tool, Cambashi e-Xpert AE, uses. This gave us more or less full access to a 128 kilobit per second leased line, apart from a little Web surfing that was going on in parallel. From the range of results we have seen, our own technology is not the limiting factor!

Our favourite 'virtual participation' to date was Peoplesoft's EMEA CRM announcement on 6th June, whose use of Webcast combined a good technical performance with effective content. A small video of the speaker kept good synchronisation with the audio (also delivered via the Web), and the presentation slides appeared and changed crisply on the main part of the screen. The initial login procedure was efficient, and the handling of questions typed into the "question" box on the screen was straightforward. We like being able to see, on the same Webpage, the names of other 'virtual participants' who asked questions, and the text of the questions they asked.

Almost as effective was the Invensys statement about their plans for Baan. We attended by telephone for audio, which was synchronised with a Webcast of presentation slides. Again, technical performance was good, with slides accurately synchronised with the audio. In fact, the real difference versus the Peoplesoft Webcast was that we, like many organisations, have standard telephones on desks, whereas we use headsets for PC based audio. So, telephone-based audio meant we were not hands free, and note taking was not easy. Interestingly, the telephone based system for questions works just as well as the text approach of a pure Webcast, except you have to take your own notes. Also, the queuing system can be frustrating, especially when the person immediately before you asks your question!

We have had experiences of similar telephone plus Webcast where the synchronisation of slides and audio was poor to begin with and
deteriorated during the session. We haven't analysed these in detail, but a straw poll suggests they have been US rather than European based events. We assume that the basic technology employed at a US event is at least as good as that at a European event. This implies that the problems we've experienced have been to do with the intervening networks rather than the first or last miles!

Our conclusion - vendors, please keep trying - we want to make it work, it evidently can work, and for us, a mix of "physical" and "virtual"
events is optimum.

Peter Thorne

peter.thorne@cambashi.com

BOOK REVIEW - ENTERPRISE ONE TO ONE

Don Peppers & Martha Rogers, Paperback - 451 pages (March 1998)
Piatkus Books; ISBN: 0749918144 (A310.39 at Amazon.co.uk)

Enterprise One to One is the latest in a series of books by the authors about one to one marketing. Prior to reading the book, I felt I understood the fundamentals of one to one marketing. Like niche or segment marketing only more so. However I found I did not.

The basic premise is to make it easy for the customer to teach you what they want and then remember these personalised needs. With each interaction, it becomes more convenient for the customer to use your solution/service. This convenience creates long term loyalty that in turn reduces cost of sale and increases profitability. Even if a competitor comes along with a potentially similar product, the customer is reluctant to switch, as they would need to spend time teaching the new supplier their needs to get the same level of convenience and service.

Two points particularly occurred to me - the customer must find it simple to teach you their needs and you must have systems that remember so they never have to repeat themselves. This may sound simple, yet how often have you had to repeat yourself as you move from one department of a company to another. And why can't the person you first contacted deal with all your issues rather than telling you to call another number?

The book, with over 391 pages is not a light read; yet, persistence is rewarded. By the end, I had developing a robust understanding of how to apply one to one marketing to my business and the competitive benefits that will accrue.

If you are a reseller concerned about how you compete with others selling a similar product, a manager investing in a CRM system or if you are simply looking for an approach to marketing that is more than a tactical set of activities, I would recommend setting the time aside to read this book.

Ian Dabney

Brainsells

e-CHAT - Is it time to save travel and do presentations/demos over the web?

The summary below is taken from ClickZ, Tuesday 30th May, One to One Presentations, author Cliff Allen

"Several companies now offer web-based products and services that allow a presenter to send Powerpoint slide presentations to any number of people for viewing at their desks or in a meeting room. The audio portion of a presentation can be carried over the Internet, but usually a presenter will use a standard telephone conference call.

Web presentations can provide several benefits over an in-person presentation that go beyond saving you travel time and expenses. For
instance, they are more conversational than a formal presentation, so it's easier to ask the audience questions and tailor the presentation to their needs. Web presentations can also be scheduled on shorter notice than meetings that require travel.

Sales presentations to prospects in distant cities are frequently seen as the main use for this tool; however, there are other uses as well. Web presentations are being used in-house for project briefings, updating the staff at remote locations, vendor briefings, and staff training.

Most web presentation companies provide software that transmits Powerpoint images to their server, where the images are broadcast to
everyone in the audience for viewing in a web browser. Some allow you to show running applications to the audience, a great tool when giving software or web site demos. I have recently been using WebEx for meetings, but I have also used Pixon's PictureTalk and PlaceWare. Another provider to consider is E-Conference.

Some vendors offer their solution only as a service, while others provide both services and software you can run in-house. Before bringing this type of application in-house, make sure your Internet connection has sufficient bandwidth to support the largest audience you plan to accommodate".

Cambashi researches best practice and assists IT suppliers in best practice implementation. For more information on Cambashi services please email info@cambashi.com

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