At the base of the small to medium business (SMB) strategy is the formation of a dedicated sales operation focused on SMB requirements, and Siebel took on 70 people during Q3 to help staff the operation and prove its commitment to the sector. Rather than replicate the direct sales structure already in place to serve large enterprise customers, Siebel has opted for a new format that combines direct and indirect sales models and is designed to enable customers to buy in the way that best suits them, from the most appropriate supplier.
The SMB field organization will be headed by Siebel Territory Managers, who will work with channel partners to develop joint business plans for regional business development. Siebel will back these efforts via cooperative marketing funds based on partner license sales and by providing turnkey marketing programs.
The critical part of Siebel’s SMB proposal is the channel strategy. Its challenges are to get partners on board in the first place, which could prove difficult because it does not have a positive track record with the channel, and then manage both direct and indirect models without offending channel partners. The company is also breaking new ground as far as its own operations are concerned: while it has spent the past 10 years developing its direct sales model, it is now trying to build an indirect model and use both to crack the SMB market.
To try and minimize channel conflict it plans to use team selling, an idea it took from former mid market CRM rival Pivotal, whereby the Siebel direct team and channel partners will work together on sales opportunities. Channel partners will receive the same training, sales and marketing materials as Siebel’s direct sales people and the Territory Managers will work with partner resources to co-sell and jointly develop sales plans.
To overcome reluctance in the channel, Siebel is offering a choice of engagement types enabling partners to sell with Siebel by offering complementary products or opt for the traditional sell-through reseller model. It wants to offer visibility into the sales process for partners and has developed a points system to help clarify the financial side of team selling and plans to include partner forecasts in its own sales forecasts. Siebel staff will also be incentivized to work with partners.
Siebel is also promising a proven product portfolio geared towards the SMB market. Although the company suggested new products are on the way the current portfolio consists of two existing offerings, Siebel CRM OnDemand and the on premise Siebel CRM Professional Edition. The company says it will be agnostic in terms of on demand or on premise sales. It also stressed that the Professional Edition is not a cut down version of the enterprise level offering and potentially has all the functionality of the enterprise offering. Siebel expects that the configurations used in the SMB space will have fewer functions turned on and will be priced accordingly.
Siebel’s SMB strategy is all about the channel, and the effort to embrace an indirect sales model, which is the key to the SMB market. With channel partners being wooed by all the enterprise vendors attempting to step down to the SMB market, credibility is critical. Siebel has the right rhetoric to engage partners and SMB prospects, the challenge is whether it is able to execute. Its action on staffing and flexibility in terms of sales models and methods are a positive start, but they are only a starting point.
