Case study: Sana Security needed a better way to keep on top of its revenue forecasting and goals. BlueRoads offered a much better solution than spreadsheets.
John Zicker may be chairman and CEO of a software company, but the way that quarterly revenue projections used to be done at his four-year-old company was decidedly low-tech.
“We had spreadsheets in-house, and people would be calling up and asking our resellers, What opportunities are you working on?” said Zicker, who heads Sana Security Inc., in San Mateo, Calif. “Wed get to the end of a quarter and look at our quarterly growth and look at what we forecast.
“Although it turned out that we had hit our quarterly revenue goals, half of our deals were not closed, and wed say to ourselves, Well, we dodged the bullet again, but we cant do that forever.”
Zickers problem was more than just a technological challenge that Sanas IT department had to tackle. Zickers inability to more accurately forecast revenues, identify and support strong sales leads in the field, and best allocate precious marketing resources represents the strategic challenges that nearly every executive must confront.
Zicker realized the old way of channel tracking wasnt good enough. After an initial attempt to improve the process in-house failed, he decided to look outside the company for help.
Axel Schultze, founder, president and CEO of BlueRoads Corp., also in San Mateo, whose BlueRoads 5 software allows companies to market and sell more effectively through indirect channels, isnt surprised that Sana first tried an in-house channel management solution.
“People try to build something because theres nothing else out there,” said Schultze, although he said he considers Click Commerce Inc. and Siebel Systems Inc. to be competitors of BlueRoads.
Lead management, deal registration and renewal management products do exist, but Schultze said they arent very successful in channel management.
“They dont help the collaboration, just the vendor,” Schultze said.
Before choosing BlueRoads, Zicker also looked at ChannelWave. But he said the task force inside his organization—Sanas inside sales executive, IT manager and head of marketing—was swayed toward BlueRoads, in part because many of Sanas resellers raved about the company.
“These were people we knew, not just references from BlueRoads,” said Zicker. “That was a really big selling point.”
Because many Sana resellers were familiar with BlueRoads, Zicker didnt have to allocate as many resources to train them. “Having BlueRoads host the application was very convenient,” said Zicker.
The BlueRoads solution allows companies such as Sana and its indirect partners to network so they can work simultaneously. “Without new technology, the Internet and software, this was technically not possible before,” said Schultze.
Zicker is reluctant to provide many sales figures from his privately held company. However, he does allow that since Sana started using BlueRoads 13 months ago, half of Sanas revenues now come from leads generated by resellers.
“When we started, that number was 10 percent,” said Zicker. “Weve seen a nice increase in visibility.” And while improved visibility is good news to any CEO dependent on channel management, increasing sales is obviously better news.
Founded in October 2000, Sana Security offers intrusion prevention software that protects server-based applications and client laptops and desktops from spyware, adware and viruses. Sana sells indirectly throughout North America and Europe. Indirect channels include resellers, VARs, consultants, MSSPs (managed security service providers) and more.
“With a highly fragmented market, the end users of our product tend to buy indirectly from resellers who help them figure whats the best solution” for their security problem, said Zicker.
Things started well for Sana after it released its first product more than two years ago. “Some of our competitors were acquired, and it caused a rankle in the indirect channels, so we actually had resellers come to us,” said Zicker.
Along with indirect sales came problems that are all too familiar for companies that depend on channel management. For example, some complex security solutions for end users demanded the expertise of Sana executives, but resellers either didnt realize this or were unable to track down a Sana technician in time to close the deal.
“We had systems in place from a CRM perspective, but there was a big gap, from a marketing perspective and lead-generation perspective, to having contacts and visibility with resellers—even individual channel partners down to a single sales rep,” said Zicker. “And you need individual champions inside the resellers before they commit fully to you.”
Fledgling Startup, Fledgling Fheckups
Most of Sanas initial channel management efforts were reactive at best.
“At the end of the quarter wed do a channel check,” said Zicker. “Wed get on the phone and call our resellers and say, How do you think youre going to do?”
As CEO of a fledgling startup, Zickers traditional method of channel checking wasnt exactly conducive to accurate quarterly forecasting.
“If youre a public company, you deal with it by being as conservative as you can,” said Zicker. As a fledgling startup with much less margin for error than a mature company, Zicker felt Sana had to be more accurate.
As a privately held company, Sana also didnt have the scale of a publicly traded company to create one massive channel that many large companies prefer, Zicker said. He also learned that his company wasnt doing a good-enough job of tracking contacts that resellers made with prospects to ensure that sales reps werent contacting leads twice. And with exponential growth in its number of channel partners, preventing sales reps from contacting leads twice increasingly was becoming a more difficult task.
“When you go from five to 50 channel partners, its a real challenge,” said Zicker. “You need to have visibility in the early part of the sales life cycle” to help close every deal. “You start with champions inside the reseller, and you say, Theyve taken x number of leads with y prospects, and ask, Did that go forward? And you have to continually tune the sales cycle. You have to be in a tight loop when you have a young company, and [as] soon as you go with channel delivery you lose that.”
Forecasting. Visibility. Prospecting. All of these channel management challenges sound familiar to Schultze, who said he knows a thing or two about channel management. Schultze has been in the channel business for more than 20 years; his last company had more than 4,000 channel partners in 20 countries.
“The big difference between a CEO and someone in the line is that when it comes to channel management its all about visibility,” said Schultze. “You dont have the visibility to build a good forecast, and you dont see customers theyre going after. All you know is after-the-fact revenue.”
BlueRoads 5 encourages sales reps to proactively register accounts with Sana by ensuring that all matching registered account leads are directed to them in the future. Sales reps can revisit old customers rather than learn that Sana directed the lead to a competitor, thus reducing channel conflict.
BlueRoads 5 also empowered Sanas indirect partners to pull leads for active follow-up rather than wait for Sana to assign them. That bred greater loyalty among indirect partners and generated strong sales conversion rates and more revenue.
Finally, BlueRoads 5 enabled Sana to link its marketing dollars to leads and finalized deals. That gave Zicker a truer measure of his marketing return on investment.
Schultze said its very difficult for CEOs to drive their strategic direction when they sell through indirect channels.
“Its a great threat to your business even if you have a great business model,” Schultze said. “Theres a contradiction: You have the channel, but you dont know where the channel is driving the company.”
With BlueRoads, Zicker said he knows which leads his indirect partners are following. Meanwhile, his indirect partners can pick and choose leads as well. Zicker knows which deals his resellers are working on, and resellers can keep details of a new deal private.
In fact, Sana had BlueRoads technology up and running in just three weeks, according to Zicker. That meant Zickers team could quickly get back to the business of growing meeting sales and revenue projections.
“BlueRoads had a great approach,” said Zicker. “They had two people come and interview our IT manager and head of inside sales. Then they came back and gave us training and implementation help based on our companys needs. It was a smooth integration.”
One immediate result of using BlueRoads was that Sana could integrate marketing and lead generation.
“I didnt want separate silos for that,” said Zicker. “Weve seen a synergistic effect from BlueRoads. The channel raises its hand and says, We have an opportunity. Before, the channel would have an opportunity, and I wouldnt see it until a check showed up.”
Zicker also praised BlueRoads for sharing the best practices of its other customers.
“From a CEO perspective, the biggest thing has been the visibility and forecasting improvements—being able to see things earlier in the pipeline,” Zicker said. “As a new company, youre always putting out new products and, even though you have a business model, when you start out you dont know what your sales model will really be. To really tie these leads down with BlueRoads good reporting allows me to say, This is how much I should spend on marketing to get the other leads into the pipeline. BlueRoads allows us to better build our operating model.”
Ira Apfel is a freelance writer in Bethesda, Md. Contact him at [email protected].
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