PTC Sales & Marketing Initiatives Explained Courtesy Of CFO Andy Miller

During a visit to PTC Inc (NASDAQ: PTC), chief financial officer Andy Miller said the company’s subscription model transition was well ahead of the original schedule and the current maintenance-to-subscription conversion program was boosting overall revenue, Brean Capital’s Yun Kim said in a report. She maintains a Buy rating on the company, with a price target of $62.

Sales & Marketing Initiatives

Higher sales incentives for subscription deals: PTC had increased the incentives for its sales personnel to favor subscription-based deals this year versus last year’s levels, with a bigger difference in commission rates between subscription and license deals.

Kim expects the subscription mix of new bookings to continue to rise, with the estimate at about 65 percent for FY 2017, versus 56 percent in the prior year.

Conversion program: So far, the contribution from the maintenance-to-subscription conversion program has been minimal, “although it does provide some tailwind,” Kim mentioned. The 89 conversion deals announced for last year increased the annual payout by 40 percent. Of this payout, about 15 percent was generated by additional sales of new seats and the rest was driven by converting old unused license-based seats to more flexible subscription-based seats.

“Much of the focus of the conversion program has been on this ability to remix products, and this effort has been highly successful,” the analyst commented.

More focused marketing efforts: PTC already has a new sales organization and structure in place and has revamped its go-to-market efforts and overall marketing initiatives. “Its overall marketing efforts are now more integrated with its digital marketing teams and all marketing campaigns are now measured for effectiveness.”

Miller stated that successful lead generation efforts had resulted in improved attendance for the company’s webinars, which had led to several qualified sales leads.

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