Salesnet aims Express at low end of CRM market

Salesnet Inc. plans to introduce a new edition of its hosted CRM (customer relationship management) software next week targeted at the lowest end of the CRM market, with a monthly per-user price starting at less than $20.

Salesnet Express will offer almost all of the functionality in Salesnet’s standard service, removing only a few hierarchical features such as customized access controls for users in different segmented groups, according to Salesnet Chief Marketing Officer Dan Starr. Sales will be limited to 10 users per organization.

The service’s features include tools for account and contact management, scheduling, e-mail campaign administration, document sharing, reporting and forecasting. Salesnet Express runs on the same architecture used for Salesnet’s other editions, so customers can upgrade without any data migration, Starr said.

Salesnet, which has headquarters in Boston, is among a pack of ASPs (application service providers) shaking up the business applications market, bringing to midsize organizations features traditionally found only in pricey, complex packages. It competes in the hosted CRM market against Salesforce.com Inc. and UpShot Corp. All three companies have offered a basic price of $65 per user, per month. That remains the cost for Salesnet’s standard edition. Salesnet also offers a more advanced edition, Salesnet Extended, for $99 per user per month. Salesnet Express will be sold in annual-subscription packs of either five user licenses, for $1,195, or 10 licenses, for $1,795.

“We’ve focused to this point on midmarket companies and enterprises, but we felt there really wasn’t a company that was bringing this type of technology to the low end of the market,” Starr said.

Aberdeen Group Inc. CRM Research Director Denis Pombriant said he questions whether very small organizations need the features offered by hosted CRM providers. At such a low licensing price, Salesnet will have to sell its service at a significant volume to make the low-end opportunity one worth chasing, he said.

“I suppose there will be some demand, based on whether you have multiple users that need access to the same data,” Pombriant said. “The pure Act (contact management software) market I don’t think will be moved by this for the very simple reason that there isn’t a great price advantage. There’s a market, but I don’t know how big it is.”

One new Salesnet customer moving away from Act’s popular SMB (small and midsize business) software said he knew his organization needed to upgrade, and that he chose Salesnet over its rivals for its superior technology more than its lower price tag.

OmniDox LLC Managing Partner Joey Rothman joined the document imaging and production company several months ago after working at Xerox Corp., which has a full-featured CRM system for its sales department. At OmniDox, sales reporting and tracking was being handled with Act and a mess of Excel spreadsheets.

“Spreadsheets were copied and pasted and forwarded all the way up to the CEO (chief executive officer),” Rothman said. “I was thinking, man, this isn’t a very good system.”

Rothman considered UpShot, Salesforce.com and Salesnet, and selected Salesnet because he was impressed with both his trial run with the software and with the attention Salesnet offered while courting his business.

Rothman heads the St. Louis, Missouri, office of Overland Park, Kansas-based OmniDox. He’s currently setting up Salesnet for the six sales representatives in his office. If all goes smoothly for them with Salesnet and OmniDox can demonstrate a return on its investment in the service, Rothman expects the company to consider rolling out Salesnet to its other offices nationwide — even if that means paying the higher costs of upgrading to Salesnet’s standard version.

“Price is pretty much relative,” he said. “If it’s helping us do a better job, and saving us the time and labor we were spending on those spreadsheets, it’s worth it.”

Salesnet’s Express launch comes as others in the hosted applications space are highlighting the success they’re having challenging traditional vendors. All of the companies in the space are privately held and not required to release data on their customer base or revenue, but Salesforce.com — generally regarded as the industry’s leader in generating both customers and hype — announced this week that it has crossed the 100,000-subscribers mark, from 7,400 customer companies. It also claims profitability, reporting revenue of $21.7 million in the quarter ended July 31.

Salesnet does not disclose its customer base, nor does its rival UpShot. Hosted ERP (enterprise resource planning) vendor NetSuite Inc., which competes often with the hosted CRM vendors, supports 7,100 companies.