Show me the ROI, not the discount...

  • 16-Dec-2013

Among the swarm of promotional emails that floods my inbox daily, one caught my attention. It held out a tantalizing promise: “Work faster & smarter in the new year.” It seemed to offer a super bargain: “Up to 67% off.”

I know North America is in the thick of the holiday shopping season. The weeks between Thanksgiving and Christmas ring up to 40% of many retailers’ annual sales. Black Friday, Cyber Monday. and the in-between Shopaholic Saturday & Sunday are quasi-religious holidays themselves, sacrosanct for shoppers because of the seemingly all-around discounts.

Even then I was a bit surprised by what’s being offered for sale at a steep discount in that email: VMWare’s enterprise social software Socialcast.

Socialcast Sale Offer

Figure 1: Cyber week Sale: Socialcast Marketing Campaign

Now, at RSG we also occasionally run promotions on specific research reports, including at the end of the year, but what to make of holiday sales of subscriptions to not-so-simple enterprise software?

Obviously, Socialcast is trying to garner as much revenue as possible before the quarter and year turn. Perhaps they are driven by the need to meet a certain revenue target inked into the VMware acquisition agreement. Or perhaps they’re just trying to meet sales quotas, possibly  trying to nudge buyers who’ve got unspent budgets. Maybe they’re running an experimental campaign to see where it goes.

Whatever be their motivations, as a prospective customer, I hope you’re not swayed by price or price cuts alone. Yes, enterprise social software is maturing and we see some convergence of functionality offered by the different suites. But the social software category is not so commoditized that price alone should be the deciding criterion, especially since switching costs remain quite high.  As a customer, you will be best served relying on the scenario-based selection approach that we champion.

So, am I saying that Socialcast’s offer is a bad deal? No – just counseling that if and only if Socialcast is the right fit for your requirements, then by all means, grab that offer. This holds true not just for Socialcast but for any other vendor as well. Otherwise, you’ll be putting the cart before the horse, if you’re driven solely by the discount on offer.

Be a smart shopper -- look at "fit" and ROI, not the discount.

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