CIOTechOutlook >> Magazine >> July - 2014 issue

Cloud Platforms Catapulting Organizational Sales Effectiveness

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Callidus Software Inc. (NASDAQ:CALD), doing business as Callidus Cloud, is a global enterprise software and SaaS company headquartered in California. The company is best known for its cloud-based solutions for sales effectiveness and sales performance management software and services and has a market cap of $501.40 million.

The structure and focus of sales has changed drastically over time. Having moved from an antiquated approach with a focus on pursuing large one time deals, into an innovative subscription based approach through SaaS platforms. The subscription model that cloud computing has enabled, makes measuring the value of a deal ever more important. Now, not only do you need to understand the initial value of a sale, but you also need to understand the future value of renewal license fees and requirement changes.
This shift to a subscription based model has tremendous potential. Instead of increasing revenue linearly through increased prices to keep up with inflation, a subscription model allows for a company to grow their revenue exponentially. As you add new customers you begin to multiply your sales and create a new baseline of cash flow from which to expand even further and allows for better predictability into sales growth over time. Not only do you get the opportunity to create a new baseline through new customer acquisitions, but you also get an opportunity to upsell and cross-sell your products each year during the contract renewal process.
The benefits of the recurring revenue model are only realized when customer retention remains high. Customer engagement is vital to the success of a subscription based company, as they can no longer rely on large, one time deals to get by. In order for sales to remain successful in this environment they need to be enabled with new sales technology. Hosting these unified solutions in the cloud allows an organization to track and analyze user behavioral patterns based on which the sales rep can tailor their pitch from one customer to the next. Aggregating data from the cloud enables sales reps to personalize their approach leading to better customer engagement, price optimization, and greater sales effectiveness.
Further, aggregating Information in regards to the usage patterns of current customers allows reps to understand who is using the application and who is not. Customers that are not using their applications as much as they were previously can be contacted to uncover problems that may have arisen or to see if there are organizational changes occurring within the customer, helping to keep customer retention levels high. Having this knowledge enables the reps to keep their customers engaged and limit the damage that can occur when issues go unnoticed. This engagement and understanding of usage also uncovers up-sell and cross-sell opportunities. This type of uncovered information can result in a mutually beneficial upsell opportunity.

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