1 Revenue Team January 22, 2004. 2 Contents Introduction Revenue Goals The Cross-functional Team Achieving Stratfor’s Revenue Goals –Revenue Goals –Revenue.

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Revenue Team

January 22, 2004

2

Contents

• Introduction• Revenue Goals• The Cross-functional Team• Achieving Stratfor’s Revenue Goals

– Revenue Goals

– Revenue History

– 1stQ Revenue Targets

– Product – Pricing

– Subscription Sales Strategy and Tactics

– Sales Organization

• Next Steps

3

Introduction

4

Introduction

Introduction to the Cross Functional Revenue Team

1) Change and affects of change

2) Why we are doing this

3) Expectations of the team

5

Revenue Goals

6

2004 Revenue Goals

Company Revenue Goals $4 million in subscription revenue in 2004$3 million in SIA revenue in 2004

Subscription Sales Revenue Goals1) $3 million in subscription revenue2) $1 million in enterprise revenue

Business Development Revenue Goals1) $3 million in SIA revenue

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Subscription Revenue History – 2002 vs 2003

Chart is combined individual and group subscription revenue

Total Subscription Revenue 2002/03 Comparison

-

100,000

200,000

300,000

400,000

500,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2002 Subscription Rev 2003 Subscription Rev

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Subscription Revenue Goal 2004

Chart is combined individual and group subscription revenue

Reveue History and 2004 Revenue Goal

1,620,869

4,000,000

2,775,796

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2002 Sub Rev 2003 Sub Rev 2004 Sub Rev

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Revenue Assumptions

• We renew 80% of 2003 recurring revenue… that’s $2 million in renewal revenue for 2004.

• We launch two affinity products in 2004 that generate a minimum of $300,000 in subscription revenue.

• Up selling continues with FIB to basic, basic to premium, two-year renewals

• Cancellation rate maintains a 20% or less average

• Volume/revenue of 3rd party relationships

• Search engine optimization is executed on time/on target

• PR initiatives with print publications drive subscriptions

• Execution of direct response campaigns

• Execution of viral marketing campaigns

• Quantity of inbound leads and subscriptions increases with lead generation campaigns, PR exposure, 3rd party relationships

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Revenue Targets – 1Q Quarter 2004

$216

,508

$254

,037

$275

,522

$206

,254 $2

31,7

68

$234

,876

$196

,000

$209

,500

$194

,230

$(20,508)

$(44,537)

$(81,292)$(100,000)

$(50,000)

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

January February March

Best Likely Worst Variance

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Renewal Rates 2003

  $449 $349 $249 $99 $49 Cancel BCC/BE

449 36% 4% 13% 9% 1% 20% 16%

349 1% 47% 5% 9% 1% 15% 23%

249 1% 1% 46% 6% 1% 21% 26%

99 1% 1% 5% 56% 2% 18% 21%

49 1% 0% 1% 1% 54% 6% 21%

Renewal rates by price and percentage – July 2003 through October 2003

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Expiring Subscriptions in 2004

1229 13

67

2420

767

449

443

468 61

2

652

1226

1160

803

0

500

1000

1500

2000

2500

3000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

13

Cross-Functional Teams

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Why This Approach?

• Aligning company goals and objectives with department and individual activities

• Execute around company priorities

• Cross-functional communication

• Cross-pollination of understanding company, department, and staff operations

• Manage staff more effectively

• Build into daily activity more efficiency, effectiveness and productivity

• Streamline workload and reduce the common waste of time, money, people, and material resources

• Identify bottlenecks, constraints, capability gaps and ways to redirect the current approach

• Gets the job done on time, on target, on budget

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Immediate Impact of Cross-Functional Approach

1/3 1/3 1/3

Plan RelatedTasks/Activities

Internal DepartmentalAdministration

Cross-DepartmentalTasks/Activities

Alignment and Prioritization of These

Tasks and Activities in Concert with,

and Support of, Sales & Marketing

Goals and Launch Objectives

1) Each department has internal, cross-departmental, and “tactical” related activities to accomplish each day.

Without a coordinated plan, the company overall, its departments, and the personnel within them, do not know the following:

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Immediate Impact of Cross-Functional Approach

How do we know : a) if the right task is being handled, b) if it

will be completed on time, c) in the right priority or order.

Low Medium High

How do we know : a) if the right task is being handled, b) if it

will be completed on time, c) in the right priority or order.

Begining of Month Mid-Month End of Month

Will Not Be Finished May Be Finished Will Be Finished

How do we know : a) if the right task is being handled, b) if it

will be completed on time, c) in the right priority or order.

2) A) Which tasks are of a high priority and which are to be accomplished first;

B) Due dates and dependencies of tasks that another department or individual is waiting to receive before beginning their task; and

C) Whether or not the task will be accomplished at all, thereby jeopardizing their tasks being accomplished successfully.

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Immediate Impact of Cross-Functional Approach

No Alignment vs Alignment

3) A consolidated operations plan allows for both tactical and contingency planning, and for “just-in-time” allocation of resources — time, money, people, and materials — and the ability to align functional areas with company goals and objectives.

Analysis

Production

Marketing

Sales

Customer Service

Analysis

Production

Marketing

Sales

Customer Service

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Overview of Planning Process

Deliverables Identified & Scheduled

1

23 4

5

6

Quarterly"To Do"

ListDatabase of Action Items

for all Activities

Data fromFunctional Areas

Weekly"To Do"

List

Master"To Do"

List

Monthly"To Do"

List

Monthly"To Do"

List

Monthly"To Do"

List

Weekly"To Do"

List

Weekly"To Do"

List

Weekly"To Do"

List

Meet Quarterly to discussupcoming goals

Meet Mid-Quarter to plannext quarter goals

Meet in beginning ofmonth to discussupcoming goals

Meet weekly to drive thedeliverables of the process

CommonProject

Plan

7

8"Influence" & Control

Goal 1

1 15 30 1 15 30 1 15 30

Feb Mar Apr

Goal 2 Goal 3

Goal 4 Goal 7

Goal 8Goal 5 Goal 6

Goal 9

Goal 10

Goal 11

Goal 12

Staying On Time, On Target, On Budget

AB

C

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Characteristics of Cross-Functional Teams

1. Have a mission, purpose or goal to achieve

2. Have a defined structure

3. Have members who understand their role, their responsibilities, and the team’s expectations of them.

4. Have open communication, particularly for planning and problem solving

5. Try to improve themselves, i.e., team and individual skills and process

6. Are flexible, not rigid, particularly with roles and opportunities as they are presented

7. Use pre-defined process with contingency plans

8. Train and practice together

9. Have consequences for their actions, either positive or negative, for both the team or the individual

10. Have a coach / team leader to keep the priorities on track

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The Cross-Functional Team

1. Account Management – Anna

2. Analysis – Rodger/Mike/Bart (TBD)

3. Business Development - Jeff

4. Customer Service - Lee

5. Finance - TBD

6. HR - Dorothy

7. IT/MIS – Ron/Mike/Will (TBD)

8. Marketing – Tom/TBD

9. Sales – Tom/TBD

10. PR - Meredith

11. Production - Marla

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Subscription Sales Objectives and Tactics

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How People Find Stratfor

eMarketer, an online Internet research group, reports various ways

that people find websites:

1) 78% Search Engines

2) 62% Other Pages

3) 53% Friends, Relatives

4) 44% Print Media

5) 6% Usenet

6) 6% Email

7) 2% Television

The sales plan is focused on capitalizing on these access points.

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Product Pricing

Direct Sales - Products• Group subscriptions of 5+• 2nd party redistribution• 3rd party redistribution• Up sell to SIA

Pricing• Group pricing• Enterprise-wide license• Revenue share pricing• Unlimited distribution pricing

Account Management• Individual subscribers• Basic/Premium/Affinity products• New subscribers• Renewal subscribers

Pricing• $79 basic - promotion• $99 basic - standard• $249 premium – promotion• $249 premium – down sell• $349 premium – down sell• $449 premium – standard• $100 - $249 for 2nd year up sell

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Subscription Sales Goals/Strategies

$3 million in subscription revenue

1. Renew $X /X% in renewal subscription revenue

2. Increase existing customer base revenue by X% or $X monthly

3. Increase new subscription revenue from $X in 2003 to $X in 2004

4. Account Management will shift from an “inbound” sales team to an “outbound” sales team and employ more cold-calling tactics

5. Reduce sales cycle and company revenue cycle to accelerate revenue collection and recognition in 2004

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Enterprise Sales Goals/Strategies

$1 million in enterprise revenue 1. Renew 80% of existing enterprise renewal base revenue

2. Increase enterprise renewal revenue through up sell programs

3. Employ a 2nd/3rd party sales model to leverage an existing or new client’s customer base

4. Reduce sales cycle for enterprise sales to accelerate revenue collection and recognition in 2004

5. Lead generation campaigns that include list acquisition and implementation of PR campaigns (print placements)

6. Additional sales hires (2) for enterprise sales

7. Go global with sales efforts

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Quarterly Sales Goals

1st Quarter 2nd Quarter

Generating Revenue

Enterprise sales

Begin 3rd Party relationships

Renewal subscriptions

Email campaigns for direct response

Email campaigns for viral marketing

Sales site update

Corporate site update

Basic and premium site update

Begin PR initiatives

Sales & Marketing Operations

Reduce sales cycle

Sales hire – enterprise sales

Generating Revenue

Continuation of previous quarter’s objectives

New product release – affinity site or email product

Expand PR initiatives to overseas publications

Sales & Marketing Operations

Reduce company revenue cycle

Sales hire – enterprise sales

Sales hire – account manager

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Quarterly Sales Goals

3rd Quarter 4th Quarter

Generating Revenue

Continuation of previous quarter’s objectives

More aggressive direct response campaigns

Sales & Marketing Operations

Sales hire – enterprise sales

Sales hire – account manager

Generating Revenue

Continuation of previous quarter’s objectives

Sales & Marketing Operations

Sales hire – account manager

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Quarterly Sales Goals

Objectives Q1 Q2 Q3 Q4

3rd Party relationships program

Enterprise sales – cold calling and cross-selling campaigns

Renewal process tightened

Email campaigns to existing base (including 3rd Party)

Viral marketing program

Sales site updated with demonstrations

Corporate site information updated

Basic site updated – Up sell efforts

Premium site updated – Cross sell efforts

PR relationship initiatives

Reduce sales cycle – Tighten sales with metrics

Reduce revenue cycle – Tighten company revenue operations

Direct response campaigns

New product release – email / affinity site

Personnel Hires

Sales Hire 1 1

Acct Mgmt Hire 1 1 1

Marketing 1 1 1

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Inputs/Needs for Meeting Revenue Goal

$4m Revenue

ProcessSales Tools

Timing

Execution of Lead Gen Campaigns

Timely Creation of LGP Materials

and Landing Pages

Purchases for Sales Program

Response from Other Departments to

Sales Requests

LGP Campaigns

Knowledge

Market IQ

Competitor IQ

Sales Channels

Sales Models

Sales Process

Acct. Mgmt. Process

Billing & Collection Process

Contract Approval Process

Product Implementation Process

Leadership

Sales Management

Company Leadership

Coordinated Strategy & Tactics

Sales Leadership

Company

Product Centric

Customer Centric

Sales Centric

Company is “Revenue Centric”

Responsiveness

Accountability

Leadership and Followship

Cross-functional Communiation

Alignment

Tactics

Tasks & Deliverables

Strategies

Goals

Responsibilities

Decision Authority

Project Timelines Remove

Direct Response

PR Initatives

Pas

sive

A

ccou

ntab

ility

Inte

rfere

nce

Bur

eauc

racy

Product Knowledge

Sales Skills

Market Need

Value Proposition

Customer Need

Revenue Expectations

Committed Support

Priorities

Boilerplate Contracts

Boilerplate NDA

Product Demo

Marketing Collateral

Boilerplate Proposals

Sales Cycle Metrics

Lead/Funnel Metrics

Renewal Metrics

Tech Needs

WebEx

Mobile Access

CRM Application

SFA Application

Intranet

Client Extranet

Customer Database

Company Goals

People

Quotas

Incentive Comp

Acct Mgmt Team

Group Sales Team

Consequences

Skill Training

Decision Authority

Sales Campaign

E-commerce Capability

Email BlastCapability

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Next Steps

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Revenue Team – Next Steps

Next steps, initial suggestions:

1) Team will meet twice weekly for the first couple of weeks

2) Review of subscription sales and SIA goals, strategies and tactics

3) Identify immediate needs and current tasks on deck

4) Build a tactical plan for to achieve the revenue strategies and tactics

5) Debrief/discussion/training on how the cross-functional team will work going forward

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