1. SaaS Benchmarking Study
Actionable insights for your 2012 sales strategy
Paul Vinogradov Jeff Hersh
pvinogradov@alexandergroup.com jhersh@alexandergroup.com
Vice President Principal
© 2011 The Alexander Group, Inc.® Atlanta | Chicago | San Francisco | Scottsdale | Stamford

2. Does Your SaaS Sales Model Support
Profitable Growth?
CUSTOMER CUSTOMER CUSTOMER
$
ACQUISITION ADOPTION RENEWAL
SALES
MODEL • Low renewal rates
CHALLENGES • Contract shrinkage
• High cost service models
• Difficulty driving product adoption
• High customer acquisition cost
• Low customer growth rate
© 2011 The Alexander Group, Inc.® 2

3. Now Open: AGI SaaS Benchmarking Study
The goal of this study is to provide executives at
leading SaaS companies with actionable data to
inform their 2012 sales strategies.
Sales Coverage: What sales roles are SaaS
companies deploying at different stages of the sales
process?
Revenue and Cost: What are the most profitable
sales channels? Where are the key areas of
investment in the industry?
Sales Compensation: What are the trends in pay
practices and compensation strategy?
WHO SHOULD PARTCIPATE?
Leaders at SaaS companies looking for a detailed
set of sales-focused metrics to confirm their 2012
strategy.
© 2011 The Alexander Group, Inc.® 3

4. Study Includes Three Focus Areas
The SaaS Benchmarking Study collects data in three categories: 1) sales coverage
and strategy, 2) revenue and costs, and 3) sales compensation.
Coverage and Revenue and Sales
1 Sales Process 2 Sales Cost 3 Compensation
 Segmentation Model  Customer Acquisition  Average Quota Size
Cost  Average Attainment
 Sales Organization
Structure  Monthly Recurring  % of Reps at Quota
Revenue
 Coverage Models  Revenue / Sales Rep
 Monthly Sales &
 Sales Headcount Ratios  Bookings / Sales Rep
Marketing Expense
 Manager Span of Control  Base Pay
 Annual Contract Value
 Channel Mix  SPIFFs, Bonuses and
 Average Contract Length
 Sales Process Stages Variable Pay
 Customer Service Cost
 Sales Cycle Length  Pay Mix
 Average Renewal Rates
 Average Close Rate  Plan Mechanics
 Sales Enablement Costs
 Performance Measures
© 2011 The Alexander Group, Inc.® 4

5. 1
Coverage Models and Sales Process
COMMON SaaS COVERAGE MODELS See how other companies
Customer define their sales JOB
Contract
Acquisition Expansion &
Adoption
Renewal ROLES and how these
jobs align to their
FARMER
Model A
HUNTER RENEWAL SALES PROCESS.
SPECIALIST
Learn how your coverage
model productivity and
Model B
RENEWAL
HUNTER / FARMER
SPECIALIST resource deployment
compare to peer
HUNTER companies.
Model C
RENEWAL
Adoption SPECIALIST
Manager
© 2011 The Alexander Group, Inc.® 5

6. 2
Revenue and Sales Cost
% OF REVENUE BY ROUTE TO MARKET1 Understand the
IMPACT that your sales
organization structure
and cost have on key
customer metrics.
Benchmarking will help
identify opportunities to
improve productivity
Majority of SaaS revenue and utilize lower cost
is field driven, but other
channels may provide a channels.
better ROI1.
1AGI Cloud Coverage and Compensation Study, 2010
© 2011 The Alexander Group, Inc.® 6

7. 3
Sales Compensation Trends
SaaS COMPENSATION PAY PRACTICES Sales compensation can
enable or hinder SALES
BEHAVIORS and
plays a pivotal role in
enhancing sales strategy.
See if your sales comp
plan is competitive with
industry pay levels and
pay practices.
Majority of SaaS companies use booked
revenue as a compensation metric1.
1AGI Cloud Coverage and Compensation Study, 2010
© 2011 The Alexander Group, Inc.® 7

8. Study Participation: 4 Step Process
1 2 3 4
Executive Data Participant
Data Request
Interviews Validation Call Report
AGI will conduct Data collection Dedicate a Upon study
2-3 interviews with includes: resource for a completion, AGI
senior Sales and Financial metrics data validation call will provide a
Marketing submitted via before finalizing participant report
Executives to standardized submissions for (no company-
capture your go to template report specific data is
market strategy Compensation shared). Optional
and productivity plan documents report readout by
inhibitors Organization AGI
charts
© 2011 The Alexander Group, Inc.® 8

9. Targeted Participants in Pure SaaS
AGI is leveraging existing client relationships and is actively recruiting from a list of over 50
additional Pure-Play SaaS companies for this study. Targeted companies include:
Target Companies
© 2011 The Alexander Group, Inc.® 9

10. Participant Report Detail
Sample Report Analyses:
DATA CONFIDENTIALITY:
All data provided by
participant companies
will be held in strict
confidence
• AGI will provide participant
report that includes ONLY
aggregated information.
• AGI will strictly adhere to rules
of Safe Harbor Act regarding
data confidentiality
• NDA is available for any
company that would like to
complete prior to study
participation.
© 2011 The Alexander Group, Inc.® 10

11. Study Rationale
• Why Cloud Practices?
• Why AGI?

12. Why Study Cloud Sales Practices?
 Definition Of Cloud Computing Evolving
Enterprises, governments, and consumers are embracing and consuming
emerging technologies at a rapid pace.
 Relationship Paradigms Are Eroding
Customer / Vendor relationships changing as firms focus on flexibility,
adaptability, and choice.
 Innovation Fed By Co-Creation
Global pace of technical innovation is being fed more and more through co-
creation versus traditional product development lifecycle.
 Customers Are Driving Adoption
They are quick to identify trends, test and deploy technologies, and evolve or
dispose of them.
 Go-To-Market Model Impacted
Everything from strategy to coverage to licensing will be altered by addition of
cloud solutions when paired or competing with on-premise offerings.
© 2011 The Alexander Group, Inc.® 12

13. Why Alexander Group?
Extensive Sales Strategy & Comp
SaaS Knowledge Benchmark Data Expertise
• 27 years experience in
• Microsoft-sponsored Cloud sales strategy and
AGI benchmark services
Coverage & Comp Study effectiveness
compare detailed
• AGI-sponsored Cloud analytics from • Industry leader in
Sales Practice and proprietary database of: providing compensation
Incentives Study solutions
• Over 100,000 incumbents
• More than 200 companies • ~20 research projects per
• Cloud Practices White
Paper year for up-to-date sales
and comp trends
SaaS Benchmarking Study
Alexander Group’s up-to-date understanding of SaaS best practices coupled with
AGI’s extensive benchmark database and leading compensation design expertise
will ensure relevant and valuable findings
© 2011 The Alexander Group, Inc.® 13

14. About Alexander Group
• Company Overview
• AGI Services
• Executive Bios

15. Why Alexander Group?
Preferred consultants to
premier sales organizations
We know Sales.
Our 26-year focus on helping sales organizations accelerate growth gives us unmatched depth and
extensive client experience – we tackle sales issues every day, and drive changes in strategy and
execution to impact sales ROI.
We work with a range of companies in various stages of maturity.
Our client list is diverse – ranging from large Global 2000 companies to smaller growth-oriented
firms with rapidly evolving sales model needs in dynamic market environments. We understand the
unique challenges for companies in different stages of business maturity, and help companies
navigate through various phases of business growth.
Our people are passionate about Sales.
Our consultants understand how sales organizations work and know the importance of sales to an
organization’s success. We hire, develop, and train our consultants to leverage their cross-industry
experience to tackle the diverse range of sales challenges facing sales leaders today.
Our approach is collaborative and execution-oriented.
Our engagements focus on delivering near-term value to our clients, often incorporating
implementation phases to ensure effective translation of designed solutions into real-world
situations where people need to drive and execute change.
© 2011 The Alexander Group, Inc.® 15

16. Alexander Group Services
Business The Alexander Group, Inc. specializes exclusively in go-to-market consulting
Mission by helping Global 1000 sales and marketing executives accelerate revenue
growth and improve business results.
Sales Strategy and Execution
 Sales growth specialists
 Over 1000 clients in 26 years
 Serving >70% of the Fortune 500
Consulting
Sales Benchmarks Sales Leadership Events
 Proprietary database  Compelling keynotes
 Cross-industry  Big picture strategy
 +250 companies  Tactical insights
 +100,000 sales  Top level connections
personnel Research Events
Preferred consultants to premier sales organizations.
© 2011 The Alexander Group, Inc.® 16

17. © 2011 The Alexander Group, Inc.® Atlanta | Chicago | San Francisco | Scottsdale | Stamford 17