About a year and a half ago when I invested in AYX I signed up for a free trial. Things got in the way and my trial ended before I could try out the software. I received a bunch of marketing email from them, and then I probably unsubscribed or marked as spam, either way I stopped receiving emails. About one week ago I received the following email from a sales rep:
"Seeing that you previously checked out Alteryx, I have some flexibility on pricing for new customers for Q4, which is our year-end. If you have a use case, we can also provide 2 hours of free training to help you build workflows with your data.
This is designed to help you automate manual data tasks, solve data-prep challenges or automate reports and uncover insights faster for your team.
Are you interested in discussing?"
I did not reply, then today I received a follow up:
"Not sure if you caught my last note. Here is what I have available for before the end of Q4:
- Discounted Alteryx Licenses - 2 Free Training hours to solve your data challenge
Can we put 10-15 minutes on the calendar to discuss?"
I have no idea if this is standard year-end practice, if it bodes well or ill, or what to make of it. I know I did not receive any emails of this sort last year around this time. I know from experience it is standard practice to receive marketing emails after asking to be unsubscribed or removed from mailing lists. Companies with aggressive sales tactics typically wait a few months to a year and then email you again, so I am not surprised to have received correspondence after many months of silence, but the discounted offer and the somewhat-aggressive follow up has me wondering if they are on overdrive trying to meet targets. Also want to be clear I am not spreading FUD, I added aggressively to my AYX position in the last few days, bringing it from 10% to 14%, and I have high confidence in the company, I just thought these emails were a bit interesting and was wondering if any of the folks here with more experience could provide insight. Cheers.
Alteryx’s pricing is a sore spot for its customers. That is for sure. Reminds me a little like Splunk. For large corporations looking to have a large installed base. Alteryx Server has largely addressed this with unlimited seats. or something like that. But it’s very expensive and not something for smaller organizations.
They have the pricing power because there is not a viable replacement. Despite being 20 year old software. That is positioned in the thesis as pricing power from a moat. CAP.
But pricing is their biggest risk. If another solution comes along that is good enough they will be replaced for pricing. But nothing comes close to Alteryx and nothing appears on the horizon. So no indications yet of any problems of that risk being activated.
It would not be the first time a company offered concessions to make its goals in Q4. However, I would hardly call it a bullish sign. When you have more customers and revenue that you know what to do with, you would not normally offer concessions (especially in an untargeted way for an unqualified, early funnel, customer).
However, just because one rep was authorized to put a concession out there doesn’t mean that its a global program. It could be a program to help a specific region (or I guess, even a specific person) meet their quota.
I too recently received feelers from my Alteryx rep, despite the fact that I had turned him down once (we just aren’t far enough along for AYX to help us). I think they are quite aggressive at selling, which is frankly what I want as an owner.
Bit of overthinking. Alteryx has enormous margins and once you start using the software (if they can get you to do one cool project, just one) you keep using it with an ARR of 130 or more in general and more than 140 in Fortune 2000.
Alteryx has a sales process that they have “perfected” more or less. The process, and it is spoken about on the calls, even with enormous enterprises, starts with getting 2 or 3 seats into an organization, and within 45 days or so it starts expanding, and expanding rapidly. The land, they expand.
Once they expand to 15 to 20 users Server is usually acquired in the firm. Their other two major products are sometimes even bought up front now. So Alteryx is not just relying on their primary sales pitch, but that is their primary sales pitch.
Thus, if a 2 week trial is not enough to get you going, Alteryx is instead saying try it, 2 hours of free training once you bring us a possible business use, and try it for cheap.
Seems like a very good sales methodology to me for a product that is so contagious once in the door.
The product is not cheap though, $5k a seat. I wanted to learn how to use it. Perhaps try a new gig or sideline. But at $5k a seat, unless I figure something out upfront, I will not be learning or trying Alteryx. However, on the cheap, with 2 hours of training (but only for serious candidates - as Alteryx is requiring you have a real business case for the 2 hours of training) - sounds like a stellar sales tool in the context of what makes Alteryx kick.
Tinker - great stuff, just what I was looking for. Makes a lot of sense, dangle a carrot out there and see what it brings. Thanks everyone for the feedback.
However, on the cheap, with 2 hours of training (but only for serious candidates - as Alteryx is requiring you have a real business case for the 2 hours of training) - sounds like a stellar sales tool in the context of what makes Alteryx kick.
Sure, that does sound like a stellar strategy, but I don’t know that I would be so dismissive that dangling discounts is normal course of business. To be rigorous, I’d want to know if they have been offering discounts for new users regularly, or if this is a new sales strategy for them.
As great as Alteryx is, if the “early adopters” are tapped out and now they are dealing with longer sales cycles and having to discount, well then that would be concerning for their ability to maintain their high growth rates going forward.
As great as Alteryx is, if the “early adopters” are tapped out and now they are dealing with longer sales cycles and having to discount, well then that would be concerning for their ability to maintain their high growth rates going forward.
There’s nothing false about this “if” statement, but we also have no evidence that the “if” is actually the case.
The problem with making any conclusions based on the anecdote given by the OP (or any anecdote) is that we don’t know anything about the context. Perhaps this is a common practice that AYX has done for years. Perhaps it’s a new practice that is a reaction to sales slowing down. Perhaps it’s one sales rep struggling to make his or her numbers.
We have no idea. I think our best course, unless someone wants to launch a full scale investigation, is to continue to follow the numbers (which have only gotten stronger and stronger in recent quarters).
Good advice. Definitely just a one-off anecdote. I wrote back saying I am part of a small group of ten workers, that I don’t make purchase decisions but I can influence them, and that I didn’t have time to try out the software last time. The rep replied with a download link for a new free trial and nothing more. I think it’s absolutely critical to ignore one-off anecdotes and focus on the business performance, but that’s the power of a crowd-sourced board like this, we can at least compare notes in case there is some other interesting anecdotes or evidence of a larger trend.
Anecdotes are good but they do have their limitations. Having said that what you have experienced does go against what Alteryx management had claimed in recent meetings:
They don’t need to discount as they have great pricing power.
They are focused now mainly on Global 2000 or Fortune 500 one of the two - that being the case why worry on small customers?
I am not selling based on this though. It is my highest allocation at 20%. But would be looking at CCs for sure.
Texmex you do bring up a good point. If Alteryx is going to be offering a discount, I don’t want it to be a person who is basically signing up for a free trial to experiment for investment purposes, would probably only want 1 ever, and probably had a gmail account. If Alteryx is offering discounts on this, what would they offer to Google? What did the OP tell Alteryx during all these exchanges to get the trial? That it’s a very large company with lots of seats?
The only time I see year end discounts on software is when they are scrambling to hit their numbers. And some rogue rep is probably not offering discounts without management approval. And they’ll be offering the same discount on all the leads in question.
It’s alarming to me, but this is a complete 180 from the last quarter, and the way things have been going for the past few quarters (increasing TAM, etc.).
Why give up on smaller customers just because your putting more emphasis on large customers?
I guess it would be just a function of how many leads they are getting, how many free trials convert into actual customers. If only 5% of free trials turn into actual customers that’s a lot of harassing people who will never buy. So if you’re going to put energy on leads, they may as well be the big ones.
It would depend on the quality of the leads. If about everyone you talked to bought, yeah, you’d leave a lot of money on the table not talking to everyone.
None of us are in the sales meetings, or have access to their data and analysis. If Alteryx is marketing in a certain way, more than any other company, Alteryx lives on data and analysis, and every decision has a number behind it supported by that data, I trust Alteryx knows what it is doing.
Hey, if a small anecdotal example, of full context we do not know, turns out to be a precursor that viral demand for Alteryx has hit the low hanging fruit and it is down hill from here, they report this week I believe.
Anybody want too short? Want to buy naked calls? I don’t even want to worry about it.
How much are they likely to know about Tinker and his firm before the call? Certainly there are some law firms big enough to be reasonable customers and an interest in this type of software might be taken as an indicator that the firm is large enough to have specialty analysts (instead of just curious investment types).
Alteryx knows what you give them along with a rudimentary web search and common sense.
These companies must balance between gathering more and more data (thus taking the downloaders time) with asking for so much data the potential downloader gets frustrated and moves on to another option that does not ask for so much information.
This isn’t just my opinion the former cmo of MDB said the same thing in a presentation.
Alteryx being who they are and “the only option” should be able to take an additional 5 minutes of the downloaders time and ask a few more questions about the downloaded business. If the downloader basically fills out the questionnaire as if he’s a private and formerly unknown version of google then Alteryx is going to try and spend more time and effort to try and sell this person a bunch of software.
Which is why without knowing all the facts you can’t make much use of this info.
Assuming people download this software trial all across the world all day, Alteryx has to qualify their leads. Otherwise they’ll spend all day trying to convince a college student in Bangladesh to buy their software.
I do not remember if I filled out a questionnaire. I work at one of the largest public research universities in the world and my email address reflects that. I do have a public profile on the university website. If the sales rep googled me they would have found out that I work as a research scientist and based on my public profile they might have had reason to believe I could be a reasonably high value customer. I do very large scale data analysis with massive data sets that are much, much larger than anything Alteryx can handle, that require the highest performant computing resources in the world, meaning mostly Fortran, vi, and a command line interface.
As I said further up, I wrote back and explained I am part of a ten person team, I don’t make licensing decisions, but I influence them, and she replied with a link to another free trial and a thank you but nothing more. If she was desperate she might have tried to sell me but she didn’t, I got the sense she was just being courteous. Nevertheless, the original email stood out to me as weird for the same reason you find it weird. Someone further up mentioned not selling based on this. Whoa! Never in a million years would I expect that type of reaction. This is just a little curious anecdote I wanted to share with the board. Tinker posted a contrasting experience recently as well that should allay some concern.
How much are they likely to know about Tinker and his firm before the call?
It is hard to tell where he would be in a lead ranking process. Even before it’s at inside sales, they may go through a process to validate the lead and find out more about the potential.
Having gone to some SFDC events before, I’ve had many harassing emails from companies that had booths there even before I left the event. I was actually impressed with TWLO, I was at an event in London but told the guy at the booth I was just there for a short term project but lived in Singapore.
The lead was quickly transferred to the SG lead specialist they contacted me.
After I told them I was a shareholder snd that was the reason I went to their booth, my lead must have dropped in score as I never heard from them again
Selected discount pricing may have a bigger value than moving a little extra product. There are few if any direct competitors out there to use as a comparison ,so how does Alteryx know how to price their products? Maybe they are charging too much?
The price gap between Alteryx and spread sheets is huge. One customer experience featured by AYX is using their product to determine which companies will only buy at a discount, and which will pay full price.