I haven’t sold for a living in almost 20 years but then again as an independent analyst I am always selling my ideas. I’ve also studied selling for a long time both as a rep and now as someone who tries to understand how we apply technology to a very human-to-human process; I think my opinions are well informed.
Something crystallized for me in a recent briefing meeting I was discussing sales acceleration with a CEO. I’ve long thought that sales acceleration is not only an archaic term but also a dangerous delusion that could prevent greater sales success. It’s an idea you might be familiar with if you read this space occasionally.
It’s my position that sales acceleration has seen its peak and has been declining as a driving force in sales management for many years. Certainly there are many, many people and organizations practicing a form of acceleration and there are more than a few software vendors poised to assist that effort. But as a practical matter the attempt to accelerate to me is like pushing on a string. That’s because there doesn’t seem to be much left to accelerate.
By necessity most acceleration happens on the vendor side. So we have all sorts of ways to reduce latency in vendor processes and actions. We speed up configuration, pricing, and quoting so that we can put offers in front of customers before anyone else can. Or we use the latest social media tools to be in the moment with customers whenever they have questions or even stray thoughts. But there hasn’t been much change over many years in what customers do. They take in vendor information and process it as they must and reach decisions, even deciding not to decide.
Customers’ deliberations are not guided by much more than spreadsheet analysis and decisions arise from thinking about the collected information from various sources. So I don’t think there’s much further to go in actually accelerating because I don’t know how you speed up the way other people think.
Acceleration is a relic of a much different time. In 1911, Frederick Taylor published his famous time and motion studies and inaugurated the age of acceleration. But Taylor’s goal was to eliminate wasted time and motion in manufacturing processes, to get humans to function as much as possible like the robots that have continuously replaced them over the intervening century.
Taylor’s efforts gave form to the industrial age and time and motion became cornerstones of business processes everywhere whether or not they were appropriate. Perhaps selling is one of those areas. Efficient selling has been a goal for a very long time and at first there were many efficiency gains to be had. Giving telephones, cars, computers, among other things, to sales people gave them the ability to reduce the inherent latency of selling. Today we’re at an intersection point of two important trends going in opposite directions. The drive to make selling more efficient is heading south while the need for reps to intuit, empathize, and adjust to customers has never been greater.
If you look at the sales tools that have been released in the last decade, most of them (certainly not all) aim not at efficiency in the Taylor sense, but at capturing various forms of data that enable better understanding of customer situations so that reps can focus their time and attention on the deals most likely to close. In effect, this has provided the ability to accelerate revenue if not individual situations because the automation we have makes it possible to keep tabs on many more situations. The net effect is more predictable revenue even if it doesn’t do much to accelerate a specific deal.
This is all very good but it brings into high relief the place of efficiency and acceleration in modern selling. Why are we still banging on the efficiency and acceleration drum? My thought is that acceleration has become a meme; something each of us inherits as sales people. It’s a bit of social genetics that we don’t think much about because, hey, it’s groupthink.
But I’d suggest that two things are happening. First the concept of acceleration is morphing to be more about revenue acceleration than about deals, which therefore accommodates the new reality. Second, at some point we’ll realize the gap between what we say and what we mean and we will adjust selling to better reflect the realities. If that happens across a broad swath of the profession it could usher in a new golden age.
Siebel saved my life. Not really but sort of. By the early 1990’s I had been selling software for what seemed like a lifetime and dealing with the typical frustrations of life in sales. There weren’t enough leads and there was always more work to do than you could squeeze into a day. I kept records on legal pads and file folders and I had a Rolodex that I would never update because it was way too much work. And then there was forecasting.
Fortunately, I was young and gifted with a great memory so I could remember everything that was relevant in a deal. Beginning in the 1980’s I had worked for a succession of DEC partners and I found that I could memorize whole catalogs — VAX and PDP-11 were separate — without trying.
But, yes, Siebel saved my life because by the early 1990s I was burned out — the mini-computer boom was fizzling, the dotcom boom had not yet started, and there was a recession which made everyone skittish about installing systems on PC networks because they were also skittish about network operating systems.
Finding leads was hard. No one would spend much on marketing and bingo card leads were of such low quality that it was easy to return them to marketing with a heavy dose of scorn. Cold calling was a way of life. There was no Internet to speak of and researching prospects was tedious. The early market euphoria in which every company was a prospect had given way much too quickly to a war of attrition.
I was not a Siebel user but it nevertheless saved my professional life because it showed there was a better way to sell that didn’t involve dialing till you dropped, unmanageable paper records, and monthly forecasts — little fictions whose greatest quantitative attribute was that they were rendered in spreadsheets. Siebel wasn’t even the first tool of its kind. ACT! and Goldmine were already on the market but Siebel took what had been a single user experience and made it germane to selling in the enterprise.
It would still be many years after Siebel’s founding before we would see integrated marketing and customer service but true to form Siebel was one of the leaders in consolidating the CRM suite at a time when public companies would buy other companies in simple swaps using their stocks like cash.
Siebel also hired aggressively. EVP David Schmaier would routinely visit his alma mater, Harvard Business School, each spring and round up its best and brightest for export to San Mateo. As a strategy it worked reasonably well and the company was always awash with smart, talented people, not just the Harvards by the way. Many of them are still in The Valley, populating other companies including Oracle where some settled after the buyout. Today having Siebel on your resume is akin to having Oracle or HP back in their heydays. It says you were first, you were prescient, you’re a survivor
The company was never loved, in my estimate, and that is a key lesson for all those who come after. They played by a script that was pure Geoffrey Moore. Not that Moore is like that, I don’t know him. But in “Crossing the Chasm,” Moore set down some absolute truths about how paradigms shift and how the eventual winners conduct themselves. Early markets are take-no-prisoner ground acquisition games. Capture as much territory as you can to deny it to your competitors; deal in a general-purpose product and accept customization ideas with great reluctance and great cost; expect the customer to figure it out and provide adequate but no frills support because most of your energy is dedicated to capturing more, more, more.
It was a brilliant strategy that some might say was invented at Oracle so it was only commonsense that Tom Siebel and several other titans of today’s software landscape would come out of that culture. But the strategy has a down side too. As I say, Siebel may have been respected for its execution but I doubt if it was ever loved in the way that Apple was loved, for instance.
The lack of love made it easier to accept the assertions of an upstart analyst firm at the time that Siebel’s marquee customers could not show an ROI. A scandal erupted that took a good deal of wind out of the company’s sails. Then, too, a Gartner analyst famously forecasted in off the cuff remarks that half of all CRM efforts would fail. Many people grasped at these factoids like they were drowning.
If all you read are the headlines, then your world is rather black and white but if you delve just a bit deeper you understand that the world is rather gray and this situation was no exception. Frustrated by the charges that the company believed were bogus, they hired me to evaluate not the charges but their customer base. My partner at the time was fellow Aberdeen analyst Harry Watkins who happened to hold a Ph.D. in Marketing and also taught at the university level.
Our work was clean. We were separated from Siebel by three thousand miles and given broad latitude to question their customers. What we discovered in many cases was exactly what Geoffrey Moore might have predicted. Major corporations had bought Siebel because it was the market leader and because they didn’t want to lose a step to a competitor. They were early adopters after all. The result, our research showed, was that a whopping half of the customers never bothered to conduct even a rudimentary needs analysis before or after purchase. Many could not quote an ROI because they had no relevant starting point to compare with.
Also, in a great bit of statistical analysis, Watkins discovered that some of the companies that were reporting ROI numbers were among those who failed to perform that needs analysis. When he compared this group with those who had actually performed needs analyses, he found that in aggregate the faux reporters had lower ROI to report. Our conclusion was that without a valid starting point for ROI the faux reporters either developed amnesia about how bad things had been prior to implementation or they’d downplayed their results so as not to contradict the evident truth of the herd and the headlines.
When we published the results, a few people in the industry, whom we had thought of as friends, demanded our heads on platters. It was all good fun. But that’s not the whole story. In direct follow up interviews with some customers we discovered additional truths. Siebel really was hard to use, especially for people who had never followed organized business processes and organizing sales people of that era was like rustling cats. Its client-server architecture, the most advanced for the times, required a great deal of handholding. One major company I spoke with had three teams of technologists dedicated to Siebel — one each for the last release, the current release, and for the next one. They were tired but curiously not angry.
Siebel had the lifecycle of a meteor — a bright youth and an ignominious end. In subsequent years, relative newcomer, Anthony Lye would do much to integrate Siebel into Oracle and flesh out the product line with a SaaS architecture and many auxiliary functions — other free standing companies bought with Oracle cash to fill out the very complete suite we see today.
Siebel got started in 1993, which means this is the twentieth anniversary year of its founding. A lot has happened in the interim. Siebel is no longer a standalone entity having been acquired in a greater version of stock market brinkmanship than even it had participated in during its growth phase. But in many ways, Siebel still is the market. Go into a Global 2000 company and you will see a Siebel system; today Salesforce users might flank that system’s users too. For many of these companies Siebel is a workhorse system that has been through some of the wars and continues to be serviceable.
But markets and vendors are changing. Oracle has Fusion and is slowly merging it with Siebel while Salesforce continues to be the juggernaut that prematurely challenged Siebel in a joust of jests. If you follow Bruce Daley’s recent survey work the customer base is in good shape so you might wonder what’s next. Customers seem to genuinely like Siebel these days, a good omen for sure. But current mainframers still love their big iron too. For all that, however, we aren’t building and selling mainframes very much and the installed base is shrinking if only because COBOL/CICS programmers want to retire and kids in school today don’t want to be big iron museum docents.
So where is Siebel at twenty? Somewhere in middle age. There might be a Siebel named product twenty years from now but it will be very different from what we have today, which s very different from what we had ten years ago. By and large, that’s a good thing. So, happy birthday Siebel.
Microsoft did some smart things last week when it announced its Dynamics CRM Online service. Most of the headlines will focus on the teaser rate or introductory pricing of only $34 per seat-month for 12 months. Until June, users of Oracle CRM On-Demand and Salesforce who switch will have an added inducement of up to $200 per user, which everyone acknowledges ought to go to conversion costs.
There are other reasons to be charmed by Dynamics CRM Online which we can review below but the emphasis on takeaways leads me to ask the question — is the CRM market becoming saturated? In a saturated market that’s typically what vendors do — keep the installed base happy and try to poach from the other guy.
But CRM doesn’t look saturated to me. Just last week I was speaking with a company that had built its own solution and was looking for help selecting something more standard. It is surprising how many companies like that are still out there. With big analyst firms predicting double-digit growth and many billions in sales for CRM over the next several years, I think I am in good company when I say saturation is not on my radar.
But that’s not to say that some amount of switching inducement is not in order. For instance, Greg Gianforte, CEO of RightNow, told me recently that in his area of focus, the service center, there’s good switching activity in part because many of the service center vendors and their products from the client-server era are reaching end of life. Some vendors haven’t kept up, some are out of business or taken over, and you can’t do some of the things customers want and need like social, if the vendors haven’t kept up with cloud solutions, for instance. That’s not Microsoft’s issue.
Also, Microsoft representatives have told a similar tale about aging back office systems and a shift now happening to retire older systems. So, perhaps for the first time in this cloud- and browser-based era there are significant reasons for companies to consider swapping out their front and back office systems.
But that’s all back office and service systems. What about sales and marketing? Pure SFA has never been a box office favorite with the masses. Early systems didn’t provide enough value to the end user and eventually, even managers determined that the amount of information coming from first generation SFA was lacking. But SFA has been increasingly saved by the efforts of people in the marketing automation business.
Marketers were arguably the first in the front office to see the promise of social media and to take advantage of it. The result has been a steady stream of better leads from techniques like lead nurturing and various customer analysis schemes which are supported by vendors like Eloqua, Marketo, SAS and others. Sales seems to be more open to accessorizing than other parts of the CRM suite or perhaps that perception is simply an outgrowth of Salesforce.com’s openness and their AppExchange. Whatever the cause, companies like Cloud9 Analytics have been able to take the raw data out of Salesforce and provide managers with the analysis and real information that SFA systems alone fail to support. The result has been continuous improvement in selling and marketing.
Back to Microsoft Dynamics CRM Online. I suppose they could have found a longer name but this will have to do. I’ll just call it “Online”. Online is a direct challenge to Salesforce and Oracle and employs the same code set, Microsoft CRM Jefe, Brad Wilson, tells me, as the on-premise CRM solution. In fact, about the only thing different is the branding, which I can appreciate. On-line means a SaaS or on-demand product hosted by Microsoft. Partners can host too but they add custom applications and other value add to Microsoft Dynamics CRM.
Partners also adhere to a more standardized form of SLA than they did a couple of years ago but anyone considering a SaaS solution from any vendor ought to read all of the small print. Having an uptime commitment is essential, but it’s not the only thing. For instance, knowing whether the data center is mirrored is important because it impacts how long you’d be down in a worst-case situation. Good back-up is nice but not if you need 48 hours to spin all of the tapes to get back to work. Good news here, Microsoft continues to invest in its datacenters to provide the peace of mind factor for its online products.
Microsoft also launched a Babel of languages — 40 in 41 markets — for Online. That should cover about 110 percent of the world’s business centers, plus Mars if we ever get there. The user interface has many graphical features and dashboards and is highly configurable by the user. It is also well positioned in Microsoft Office integrating with applications like Outlook to take advantage of user familiarity with email.
There is also the concept of a ribbon at the top of the screen that holds a graphical function menu. The ribbon changes with every change of location within CRM. It’s a great way to eliminate irrelevant tabs and bring forward the functions most needed for the work at hand. I like it.
I have not been through the product from stem to stern so there are loads of things I am not going to comment on. But it was difficult to get some information that should have been available. For instance, I run a Mac and I have many browsers but the analyst briefing was conducted using Live Meeting and Internet Explorer so I was locked out. I know Microsoft is sensitive about its standards and wants the world to use its products but this is the Internet and refusing to play nice with the other guys is no way to promulgate a standard. In fact I find this a bit churlish.
There’s no doubt that Microsoft is “all in” as they like to say. Steve Ballmer gave the keynote for the kick off and other senior executives also spoke. All-in-all this is a good effort but from the videos I’ve watched, my impression is that there isn’t enough integration of social media in the business processes demonstrated so, to me, the effort appears to be more 1.x than 2.0. But perhaps I simply missed something because of browser incompatibility.
One of the frustrations of new technology is that quite often even the vendor lacks a coherent understanding of an innovation’s business context. Too often we receive a new product category and the best we can say about it is that it is “cool.” This should not be surprising because that’s what early adopters are for. The early adopters see something cool and have the time, interest and money to investigate the new thing and in so doing they discover or establish the context.
We see this all the time and I saw this happen personally many years ago when sales force automation (SFA) was a new idea. I don’t want to take credit for anything but this story illustrates my point. I was working for a small database company in the late 1980s and our company had introduced a set of application development tools to work with its database. At that time I was the top sales person and I worked with a notebook (not a PC, you know—paper!) and a spreadsheet to keep track of deals and details.
One day, I asked my sales engineer to build me a database for my customer list. I asked that the application have the ability to capture my notes along with the usual demographic information and just for fun, it needed to have the ability to remind me when to contact the customer again. Long story short, the application was built quickly, a testament to the SE’s ability and our tools’ prowess. But when I showed it to my manager he was aghast. I was told not to use the application—that’s what spreadsheets were for, after all. I was also instructed not to waste my SE’s time like that again.
Times change but what I experienced first hand was the lack of context for this crude lead tracking application. There were few, if any, similar examples like it and my manager was not in a frame of mind to investigate how the application could help generate revenue. It was cool by my standards but, ironically, though we were in the database business, we didn’t want to be innovators at the application level within our company.
When I look at the evident excitement surrounding Salesforce’s Chatter application I see similarities. Certainly there are hundreds of companies happy to play the early adopter role and they are proving the efficacy of Chatter. But Salesforce has been vague about Chatter’s context within the enterprise. For sure, they’re doing a good job of illustrating how the product works and Salesforce provides good use scenarios. Nonetheless, Chatter is revolutionary in how it potentially reorganizes the internals of an enterprise and for that reason more context is in order.
As luck would have it, I was recently tooling through “The Wisdom of Crowds” by James Surowiecki and found what I would call context for Chatter in chapter ten. According to Surowiecki, information in an enterprise is often doled out hierarchically form the top down, because command and control is still the
dominant business model. But the people who are closest to the work and often that means closest to the customer, are the best users of information. It’s a free market concept. For decades, business gurus have made a big deal about decentralization and pushing decision-making authority down levels within an organization. But decisions require information and often information is imperfect.
What I like about Chatter is that it does not set up a high speed way for management to provide information to the worker because too much of a good thing is too much. Instead, it treats information as a commodity within the organization. Information sharing is still not perfect but Chatter accounts for this by making it possible for managers to subscribe to information flows and to step in to lend a hand when that’s what’s needed.
By this standard, Chatter is a disruptive innovation in the enterprise because it enables a breakdown of hierarchy—which has been discussed and endorsed for years but which has been unachievable for lack of appropriate technology and a business model. The two must go together, the business model is in some ways more important than the technology and it is precisely what’s lacking when we discuss Chatter’s context.
Chatter will most likely be successful because it has a solid early adopter cohort and the word will spread from it. Salesforce.com is a software company and may not yet feel comfortable taking on the mantle of business advisor but as the company grows out from its front office application roots to become more of a general purpose technology enabling concern, the company will need to accept this role and exploit it.
Perhaps this will be the subject of Marc Benioff’s next book. Maybe that book is already in process.