Intuit Confidential and Proprietary1

SaaS and Marketing Technology:Impact to Modern PricingSpring 2016

• SaaS and Martech Pricing Considerations• Case Study: Intuit’s Martech “BluePrint” and Tech Purchasing

What is SaaS and Martech?

Brief History: Computer Science Innovation that drove the SaaS Model

Baby Boomers(Born 1946 – 1964)

Generation X(Born 1965 – 1981)

Millennial(Born 1982 – 1996)

Generation Z(Born 1997 - Present)

1961

IBM 1301 Disk Storage Unit is released.

1962

Atlas Computer emerges with virtual memory

1970

Computer-to-computer communication expanded when the Department of Defense established four nodes on the ARPANET

1978

Wang Laboratories to produce a disk drive small enough to use with a desktop computer

1994

The Iomega Zip Disk is released. The initial Zip system with later versions increased the capacity to 2GB

1990

The first web browser

2008

The first iOS app is released

The first FitBit is released

1999

Salesforce.com founded

2007

The first iPhone is released

Amazon Web Services launches drastically reducing the cost of server ownership

2004

Facebook is founded

2006

Twitter is founded

2010

The first iPad is released

SaaS

PaaS

IaaS

iPaas

Creative Cloud

History of Enterprise Technology and Customer Experience Platforms

ERPFinance

Key Players: 2

• SAP was founded in 1972• Oracle was founded in 1977

CRMSales and CareKey Players: 2

• Salesforce was founded in 1999

EMPMarketing

Key Players: 5Other Players: 1871

• EMP appeared first in Forrester Wave in 2014

Marketing technology are tools that make life simpler for marketers to market. They automate difficult, time-consuming and repetitive manual tasks to surface customer

insight. Built by technologists, used by marketers. Marketing technology should aim to remove or significantly reduce the need for IT involvement.

What is Martech?

Product Marketing

Care Sales

Customer

CampaignContent

AudiencesData

Marketing technology are tools that make life simpler for marketers to market and drive awesome customer experience. They automate difficult, time-consuming and repetitive manual tasks to surface customer insight.

Marketing Technology addressed one or more of these capabilities:• Campaign: The “Why”. Ability to manage the “business of

Marketing” though campaign management, top down strategy deployment and metadata to perform ROI calculations.

• Content: The “What”. Creation, management, distribution and delivery to any channel of content. Content comprises of any combination of pictures, video and copy.

• Audiences: The “Who”. Sometimes called “Segments”, it a grouping of individuals based on metadata (demographic, firmagraphic, behavioral and corporate)

• Data: The “So What”. Collection of the above data sets for assembly for insights and delivery of near time customer experience.

Martech Acceleration: 2013 – 2014 – Vendor grows ~200% (947 to 1876)

Estimated TAM (2015) - $17.6B with 21% CAGR

Most as SaaS or PaaS = 72%.

Exceptions are Middleware, Backbone Platforms and Infrastructure.= 28%

Marketing Experiences 979 vendors = 52%

SaaS or lightweight PaaS

Marketing Operations 377 vendors = 20%

SaaS or lightweight PaaS

Middleware - 114 Vendors = 6%PaaS or IaaS

Backbone Platforms - 241 Vendors = 13%PaaS and/or IaaS

Infrastructure - 165 Vendors = 9%IaaS

Martech Acceleration: 2013 – 9472014 - 1876 2015 - ~3500

Martech Acceleration: 1990’s to 2013 – Platform Players Spend ~$4B each to build their “Marketing Cloud”

EMP Players have spent ~$4B in acquisitions to build their “Marketing Cloud”…And they haven’t stopped buying to build...

DesignExecuteMeasureOptimize Plan Tactically

No vendors, manual processes

Some vendors, not integratedMultiple vendors, not integrated

StrategicBrief

Creative Briefs

Programs

Campaigns

Activities

Promotions

Marketing vendors are disproportionately developing technology for the “Execute” phase of the Marketing lifecycle.

There are technology gaps in capturing corporate metrics with marketing results.

Platform and infrastructure marketing technology to is nascent.

52% of Marketing VendorsAudiences

Campaigns

Assets

Data

The Intuit Journey – How Value is Determined

CX Vision

Deliver Awesome CX at every Intuit touch

point

Capability Strategy

Enable employees to deliver awesome CX across every Intuit touch point

Martech Architecture

Build a durable, scalable & secure CX platform to fuel Intuit vision & strategy

Source: Intuit

Intuit chose Multi-platform out of the 4 types of “stack” – Prevalent Enterprise Martech ”build” behavior.

• Suite

• Platform

• Multi-platform

• Bus

Martech Revenue Stream Considerations - Pricing Buckets

• Annual Licenses (Users, Instances, Storage) – Eloqua, AEM, SFDC• Consulting• Contracts with 3rd Party Vendors for Delivery (Big 5)• Bundling – Licenses w/ consulting, Multiple product licenses (Cross

sell / upsell), Multiyear

• Obsolete• Versions - no price upgrade. Increase annually through the

Annual Licenses.

Martech Vendor Pricing Strategy

Vendor Technology Type Pricing StrategyAdobe Marketing Cloud Content, experience

delivery, ad spending, campaign management

On premise, SaaS and PaaS

• Penetration via increased functionality, cross sell, upsell and consulting

Salesforce.com Social Listening, experience delivery, social advertising, campaign management

SaaS and PaaS

• Skimming with high priced entry cost on “instance”

• Penetration with additional “clouds”, user, functionality and consulting

• Additional pricing to vendors to connect to their platform (reputed $25M / annually)

Amazon Web Services *aaS Infrastructure IaaS • Penetration via increased storage

Marketo Marketing Automation SaaS and PaaS

• Penetration via increased functionality packages

Kapost Content Marketing SaaS, iPaaS • Penetration via increased functionality packages

Cloudwords Content Localization SaaS, iPaaS • Penetration via increased functionality packages and # of integrations.

Enterprise SaaS transition to Subscription Business Model: The Revenue Recognition Problem

FY14 FY15 FY16 FY17

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Perpetual

Subscription

Perpetual to SubscriptionTransition

Customer Purchase: $1MFull amount - revenue recognized next fiscal month

Customer Purchase: $4.5M, discounted to $3.6M – 3 year subscriptionRevenue recognized next fiscal month for $100k

Customer Purchase: $12M. Full amount - revenue recognized next fiscal month

Total: $800K

Customer Purchase: $800k Full amount - revenue recognized next fiscal month

Customer Purchase: $4.5M, discounted to $3.6M – 3 year subscriptionRevenue recognized next fiscal month for $100k

Total: $2M

Considerations: Pricing or Product Careers - Startup vs. Enterprise

Startup• How will you build?

• Web Service or Data Farms?• What will be your business model?

• Skimming• Penetration

• Cross sell• Upsell• Consulting• Partnerships

Enterprise• International and regulatory issues.

• Privacy: Customer Data

• Multitenancy: Transactional Data

• Transition issues:

• Is the back office ready?

• Business Models

• Pricing

• Finance – billing readiness. PO to Credit Cards

• Product

• IT: CRM, ERP

• Are the customers ready?

• Are your internal teams ready? (Sales, Marketing, Support)

Appendix

20% 10x -15% 70%

PlanAutomate the operational process that supports marketing.

DesignManage the creative development process and deliver to market.

ExecuteDeliver targeted experiences based on customer behavior.

MeasureTrack marketing effectiveness back to business metrics.

IntegrateCapture 360-views of customer engagement through CRM and engagement systems

OptimizeUnderstand your success and direct investments to areas of value.

1 2 3

456

Increase in conversion rates

Response ratio of campaigns

Decrease in acquisition cost

Faster time for Speed-to-Market

Source: Deloitte Engagement, January 2015

A methodical approach to marketing automation results in real measurable benefits. Closed loop marketing is a repetitive, ongoing process, not a destination or a single project. It is important to define measurable goals for Intuit SBG that can be optimized for over time.

Marketing Automation is a foundation an optimized marketing lifecycle

EMP Capability Framework (Template)

Wearables Gamingi-Beacons In Person Machine to Machine

Enablers

Platform Orchestration

Marketing PaymentCustomer LoyaltySales & Operations ServiceFulfillment

Analytics and Insights

Profile Generation

Social MediaInteraction

Predictive /Cognitive Analytics

Localized Promotions

Personalization / Recommendations Mobile Payments

Campaign Automation

Lead Management

RecommendationEngine

eCommerce Virtual CustomerService Mobile Apps Recognition

Program

Regional SpecificFlavors

Single CustomerView

CommunityEngagement Digital Content

AdvancedVisualization

Real-timeDevOps

Ambient Computing /Internet of Things

AdaptiveDesign

CloudOrchestration

In-MemorySolutions

Financials Supply Chain OrderManagement

CaseManagementCRMProduct

CatalogCustomer

Master

Social Mobile Phone WebContextual and Seamlessacross customer touch points

Marketing automation is a critical piece of the broad customer engagement systems, and be appropriately integrated with other capabilities within the other enterprise technical architecture.

Source: Deloitte Engagement, January 2015

Path to Defining Customer Journeys and Campaigns

Journey ScopeTouch Points

User FlowMessage InventoryContent Template

Requirements Tracker

Identify Business

Objective and relevant Content Story

Identify tactics from Multi-channel plan

Identify audience / target customers

Identify timing and frequency of journey

Map the channel touch points for the journey

Align content to each step

Identify calls-to-action

Map alternative paths in the journey (branch logic)

Drill down into each step

of the journey

Determine personalization needs

Map customer attributes to personalization

Review journey for content gaps

Document data needs for triggered events

Complete the journey blueprint document using

completed templates

Review and approve

Begin to configure

Define Objective Identify Journey and content

Determine Personalization

Finalize Requirements

Tem

plat

es

Intuit Current Marketing Capabilities State AssessmentIntuit CE current state is fragmented across products and channels

Segmentation

Capability

Research insights

CX Definition (Personas/ Journeys)

Definition

Using various research to provide a holistic understanding of customers’ needs across the entire lifecycle

Bring customers to life by designing personas and journey maps to drive strategic and operational decisions to enable impactful interactions

Developing Practicing Innovative

Current Capabilities

Target Capabilities*

Customer Data Analytics

Capturing, storing and cleansing customer data to make business decisions and derive insights into customer preferences, priorities and behavior

Understanding of market and customer base using multiple schemes with a dynamic view. enabling the transition of customers across segments

Touchpoint and Content Strategy

Creating and delivering valuable, relevant and consistent marketing content in a coordinated manner across multiple channels and touchpoints

Source: Deloitte Engagement, January 2015

Marketing Automation CX Transformation: Future 0-7 Day Trialers

Unopen, No Log-in“Take a Tour” Email

Day 0: Registers for Trial

Opens, “Clicks “Take a Tour”Welcome Email

(12k / wk new Trialers)

Day 7

Opens Welcome MailClicks “Add Bank Info”, Closes w/no entrySend “Bank Info Entry Benefits” Email

Open “Bank Info Entry Benefits” Email

Clicks “Subscribe Now$9.99/mo”,

No Log-in for 5 daysSend “Get One Month For Free” Email

Open, “Nurture” Day 8 – 29 Trialer Program

“Right for me” marketing messages based on customer behavior; Full visibility to customer experience allow optimized customer experience across marketing, sales, care.

0

+2

+1 +1Web Sale fulfilled

Shows on top of the SFDC Lead Queue based on Lead Score

>3

+2

+2-1

Add to “NurtureDay 30-59 Trialer” Program<=3

1. Customer Experience Definition

2. Data/Unified Customer Profile

Sample - Roadmap – Value Milestone View

The two year roadmap is intended to provide direction to planning, execution and roll-out, and is subject to iterative refinement and re-planning based on business priorities and value drivers.

4 months

POC

6 months

1. Customer Engagement Automation

2. Marketing Resource Management

3. Audience Management

4. Journey Analytics

P1 P2 P3

Dependencies

6 months 8 months

Initiatives

Milestones

25

• Validated platform choice and business case

• Conversion and lead metrics validated

• Business case and execution plan developed

• Email campaign efficiency lift

• Web campaign tracking

• Increased lead conversion through funnel for a small set of products

• Marketing & sales gains

• Cross-channel campaign efficiency lift

• Journey analytics

• Increased lead quality for SBG telesales and ProTax

• Revenue gains in the U.S.

• Conversion lift across sales, marketing, care interactions

• Efficiency and visibility gains in overall campaign execution

• LTV tracking and lift

• Conversion, lead quality, and campaign cost gains across SBG in North America

• Initial gains in geo campaigns and engagement

• C-Sat gains

• Coordinated campaign execution across marketing, sales, care, product

• Ongoing global roll-out and campaign scale

• Global efficiency lift

• Increased GNS & LTV globally

• True campaign ROI tracking and improvement

• Ongoing C-Sat gains

• Revenue gains

• Ongoing ROI optimization

• Full global roll-out

• Planning, tracking, execution, and measurement across SBG