Group P

Priyanka de Noronha
Rishi Raj
Saumitra Ambegaokar
Sreya Ghose
Tejas Pradhan

Siebel Systems: Anatomy of a Sale

Case Analysis
Agenda

• Part 1: Introduction to Siebel

Systems
• Part 2: How did Siebel gain
leadership status?
• Part 3: The Situation
• Part 4: Questions, analysis & Summary
•
• Part 1

INTRODUCTION TO SIEBEL
SYSTEMS
Siebel Systems: Background Part 1
What is CRM? Part 1

Customer Relationship Management System

• Part 2

HOW DID SIEBEL GAIN

LEADERSHIP STATUS?
1. Customisation of product Part 2

• Among 400 players in the sales force

automation space
• Extended services beyond electronic
contact management
• Customised product according to customer
requirements
Result Part 2

Gartner’s CRM Top 10 Magic Quadrant

•

(2002) Challenger Leader

PeopleSoft

SAP
Ability to Execute

Interact
Commerce Firepond

Pivotal
Onyx
Epiphany J.D. Edwards

Niche Player Visionaries

Completeness of Vision
2. Value-added services Part 2

• Multichannel approach:
• Retail outlets
• Kiosks at trade shows
• Internet
• Call centres
•
•
Result

• Increase of over 20% in their customers’

average satisfaction levels,
• Increase of over 19% in their employees’
productivity levels, and
• Increase of 16% in customer retention
(98% of customers ready to buy again
from Siebel)
•
 Focus on Consumer Satisfaction Part 2

American Customer
•

Satisfaction Index
( ACSI ):
• Companies with top
50% ACSI scores
generated ~ $42 bn in
shareholder wealth
• Companies with bottom
50% of scores created
only ~ $23 bn
• 1 ACSI = market value
of $898 mn
•
se in customer satisfaction = a 3% increase in mark
3. Consumer value-add Part 2

• Did not attempt to capture value from

each component
• Only 16% of client’s CRM investment went
to Siebel
Result Part 2

• 729 partners by 2001

– Integration alliance partners:
Accenture, CapGemini, Ernst & Young
– Hardware & Software partners:
Alcatel, Avaya, Compaq, AT&T
Wireless
•
• Part 3

THE SITUATION
Gregg Carman’s Dilemma Part 3

• $2.1 mn sale to Quick & Reilly (Q&R)

• FleetBoston – recently acquired Q&R –
wanted to veto the sale
• Should Carman sell the product to Q&R or
stand by FleetBoston’s wishes?
•

Decides to go ahead and make the sale

Quick & Reilly: A Background

• A discount-broker
• 1996: Cathy Ridley (VP Marketing) wanted to
introduce sales force automation in 1996
– to track 100 offices, 500 brokers & 1
mn customers
• 1997: Q&R got acquired by FleetBoston
• 1998: Met Gregg Carman to consider the
possibility of implementing Siebel’s
customised solution
 Part 4

• Part 4

QUESTIONS , ANALYSIS &

SUMMARY
Question 1 Part 4

How should Carman respond to the invitation

•

to tell the Quick & Reilly executives what

he thought of Oracle?
•
His response to Cathy Ridley is appropriate

1)He does not undercut Oracle

2)He launches into a demonstration of Siebel’s solutions

What else could he have done?

a)Provided Cathy literature of Siebel’s products

b)Walked her through the various stages of product
implementation and showcased Siebel’s end-to-end
solution provision
Question 1 Part 4

What features of this particular

•

interaction influence your opinion?

•

1) Carman has no information about the client

requirements or budget
2) Oracle is among Siebel’s leading competitors, so
bringing Oracle into focus may not be a good idea
3) Cathy Ridley is a knowledgeable customer
4) Carman is not comfortable directly comparing Siebel
to Oracle without prior information on the
customer’s requirements
•
 Question 1 Part 4

Would your opinion of the right response

•

change if the circumstances were different?

•

1 ) Carman has full information about Q & R ’ s

requirements and budget
•

man should• push to sell Siebel over Oracle because he knows exactly what the cust
2)
• Cathy Ridley is not very knowledgeable

o his original response, since Cathy would otherwise not appreciate the differenc
Question 2 Part 4

How should Carman qualify the

•

prospect?
•

• “ HOT ”
•

Q&R is in the market actively shopping for

•

sales force automation systems. If Carman

can address Q&R’s requirements, he will
quickly and successfully be able to convert
the sale.
•
Question 2 Part 4

Should he ask , “ What ’ s your

•

budget? ”
•

• YES.
•

The information (Pre-approach stage) Carman

•

gathers will determine his strategy when he

sells to Q&R executives.
•
Question 2 Part 4

Should he suppress his curiosity

•

and leave it to the prospect to

bring up information about the
size and timing of the
opportunity?
•

• NO.
•

The prospect may not bring up the

•

information at all in which case the

opportunity will be lost.
•
Question 2 Part 4

If he asks for information , how

•

will he use it?

•

Sell the product to the powerful buyer, i.e.

•

Q&R top management (“the right set of

executives”)
•
•
Question 3 Part 4

Evaluate Carman ’ s interactions

•

with the customer up to this

point . Is he doing a good job?

Siebel’s USP
– ensuring
Will close customer
sale after satisfaction
Q&R raises meeting the
“objection ” decision
Demonstrates by makers
Siebel’s mentioning
Information product at Oracle
gathering to the trade
Identified understand show
Cathy Ridley requirements
(Q&R) as a
prospect
Carman is doing a good job so far
Question 3 Part 4

How effective is Siebel Systems ’

•

approach?
•

Follows a Targeted Account Selling (TAS)

•

Process1
•
2
•
3

5
Step 1: Assess the Opportunity Part 4
Step 2: Define the Competitive
Strategy Part 4

Compelling event and can compete to win

•

Marketing strategy: Flanking attack

•

1. The market is segmented

2. There are some segments that are not well served by
the existing competitors
3. Oracle has relatively strong resources and is well
able to withstand a head-on attack
4. Siebel has moderately strong resources, enough to
successfully defend several niches
•

1.
•
Step 3: Develop the Relationship
Strategy Part 4

• Key players: Cathy

Ridley, senior
executives
• Powerful buyers: top
management to whom
the final sale has
to be made
• Current status: still
assessing the
situation
• Relationship strategy: Cathy Ridley
(VP Marketing)
need to built a
long-term
relationship
•
Step 4: Turn Ideas into Action Part 4

Market leader in CRM Systems

Pre-approach stage

Only provider of end-to-end solutions

Gather information on customer requirements

Customer value addition and satisfaction, customised products, long-ter

 Step 5: Test and Improve the Plan Part 4

ill come into play once the selling plan is implement

Summary Part 4

The TAS process is effective because

•

Siebel:
1. Follows a market-driven approach
(delivers superior customer value
through complete solutions which
is hard to replicate)
2. Gathers information and better
understands customer requirements
to deliver a customised product
3. Creates strategies keeping in mind
counter strategies which
competition might adopt
•
References

B. Fryer (2001), “High Tech the Old Fashioned

•

Way,” Harvard Business Review, Vol. 79,

3(March), 99-125.
•

C. Fornell (2001), “The Science of

•

Satisfaction,” Harvard Business Review, Vol.

79, 3(March), 120-121.
•

Siebel Systems: Anatomy of a Sale Part 2

•

(HBS Case 9-503-022)

Thank you