No need to speculate about all of the Salesforce announcements expected to emanate from Dreamforce next week in San Francisco. The company is providing an assist to the news starved — and the news weary — ahead of the event.
They’ve unveiled Sales Cloud1 and Service Cloud1 as reimagined application sets that better address the times which automatically means mobile devices and more intimate service capabilities. I see a pattern.
First Sales Cloud1 has seven new apps to help sales reps work smarter according to the press release. They include, Today, Tasks, Notes, Events, Sales Path, Skills and rewards, and Sales Data. You can read the PR for details but the names are adequate descriptors.
Two things strike me about Sales Cloud1. It is very much oriented toward sales process and best practice. You can certainly use it tactically like many sales reps will likely do but the power of this new alignment is in its strategic process orientation. I have recently been noodling on process and concluded that when process is innate to the rep it is a good thing but when the attempt is to impose it from above resistance can be fierce. So this re-imagination of Sales Cloud is interesting because it is insidious — it seduces reps into better processes by offering a path with less work. You have to like that.
Service Cloud1, like its mate, is completely developed on the Salessforce1 Platform, which is to say very little, since all Salesforce apps have forever been built on their platform. But the emphasis is worth noting because it carries the subliminal message that you can tinker with it, add functions, workflow, and objects, and generally make it your own for –- watch this — your specific internal processes.
My favorite aspect of the Service Cloud1 product, and there are tons, is the ability to embed an SOS button in your service apps to presumably bring a helpful person running to your encounter when you need one. This points the way to better and more efficient customer relationships in the future. Vendors will be better able to be in customer moments of truth and because there is an aspect of customer self selection, vendor resources will be applied to situations where they are expressly needed.
On the down side, the Service Cloud1 release still talks about “consumers” which for me is a no-no. We are customers. We have relationships. Consumers need no relationships because they simply consume whatever is available but there is an element of choice in the concept of a customer. And if you look at all the contortions businesses are making to address the very real fact that people do have choices and vendors desperately want to be the chosen ones, then you see that consumer has no place in modern CRM.
Also, I am cold to the name of the “SOS” button because it connotes danger and calamity as does it’s progenitor “Mayday.” Customers are not calamities that we need to run to with fire extinguishers. They are half of the vendor-customer relationship and should be treated with the respect of that position. It starts with the term that recognizes the rough equality between the two instead of the hierarchy inherited from last century’s business paradigm. The button ought to be seen as an opportunity to be in a customer’s moment of truth and to strengthen the relationship but I digress.
So over the last few weeks we’ve seen announcements about sales, service, and at the ExactTarget Marketing Cloud conference in Indianapolis, we got an eye-full of marketing. What’s left for Dreamforce? Well, something about partners, something about developers, with a soupçon of wearables thrown in, and perhaps something about reports and analytics is my guess. That’ll keep us busy. See you next week.
There was a lot to like at Salesforce ExactTarget’s Connections 2014 user conference in Indianapolis last week. Now all they need to do is reduce the size of the name — the words Marketing Cloud need to be fitted in there too but I forget how.
First, a quick shout out to Indy, home of the big Memorial Day race. I don’t get to spend a lot of time in the middle of the country because I am so often in Boston, New York, or San Francisco and it was nice to experience the Mid-West. The city was open and clean, the people were friendly and very helpful. Good on them.
Perhaps it’s ExactTarget’s Mid-West roots but I can see a genuine concern for the customer emanating from the ExactTarget Marketing Cloud and it plays well. For a long time, I’ve been writing that capturing customer data and running random analytics against it was insufficient for modern customer relations and I’d been disappointed with what I’d seen from vendors addressing the issue.
For me, and I write about this in my forthcoming book (consider this a shameless plug), the customer relationship is a process that’s built up from many moments of truth that vendors simply have to be in and must navigate successfully to endear customers and earn the right to do it again.
Too often companies are unaware of what their moments of truth even are and consequently, and inadvertently, they disappoint customers. It’s too bad too because nobody goes into business with that mindset but the disappointment is real and it results in tepid endorsements to others AKA advocacy, which depresses sales and all manner of success in the market.
ExactTarget gets that and it was wonderful for me to be in the audience as speaker after speaker demonstrated just how ExactTarget enables them to be in their customers’ moments of truth. Testimonials came from the likes of boutique hotel operator Kimpton, apparel maker, Diesel, and a little company from Chicago named McDonalds. I believe they are in the restaurant industry.
What enables these companies and many others to be in their customers’ moments of truth is a new product announced at the conference called Journey Builder, which is just what this doctor ordered. As you might expect with that name Journey Builder enables marketers to map their customers’ moments of truth so that they can plan authentic and appropriate programs for just those moments.
Journey Builder is not a lone; it’s part of a big machine that captures customer signals, uses analytics to interpret them and to predict customer next steps so that the vendor can marshal the right responses. A complete solution uses Radian6, another Salesforce acquisition, for social listening and Buddy Media to develop and deploy the right messages at the right time. It also uses its own analytics to evaluate responses and figure out how to improve.
That was the overt and subliminal message of the event — the journey is the reward. It sounds corny but it’s true. The journey doesn’t stop and a good vendor customer relationship goes through cycle after cycle of listening, responding authentically, and evaluating the results. Lather, rinse, repeat. Simple. Success in today’s journey is what enables us to play again tomorrow.
If there was a kink in the hose it is that the moments of truth that Journey Builder maps seem to appear from nowhere. Of course, these moments are distilled from a lot of direct observation and engineered by savvy marketers into the programs alluded to. But I have a nagging fear that we’ll see a mini-hype cycle develop in which cowboy marketers assume they just “know” what customers want in their journeys and engineer very nice programs that are nonetheless wide of the mark.
In fact, understanding moments of truth is a science all by itself and that part of the process deserves to be acknowledged. But the tools and techniques required have their foundations in community and community was not really on display at this event. So some work on a fuller end-to-end approach still needs to be done and that brings me back to process. Journey Builder and its associated parts provide a nearly complete process oriented approach that sure beats a more transaction oriented legacy approach. But we need to close the loop and that means community so that the cowboys don’t get the wrong idea.
There are huge numbers of companies in the world that have not gotten this religion yet and for many it will be a big lift, but certainly do-able. This kind of attention to customers is not free. It requires technology, methodology, and trained people as well as some new thinking in the corner office. Wait a minute! People, process, and technology. Where have we heard this before?
Fifteen is an interesting anniversary. We tend to think about major anniversaries in ten-year increments with the five-year internode acting more as a gut check. Fifteen is close enough to the creation that all of the relevant parties are still around and most are still in place. But it’s also far enough in the rearview mirror to provide the perspective needed to make judgments. Salesforce.com is fifteen and celebrating it.
Salesforce was not alone in its niche fifteen years ago and if you recall the time you know that “dot com” was the watchword of the time. The Internet was still a novel innovation and companies were trying to figure it out as a business tool in equal measure with trying to get straight how to move their sunset manufacturing to ultra low wage places like China and, well, China. Maybe India too.
My story in relation to Salesforce picks up only fourteen years ago because, fifteen years ago there was nothing much except a business plan and a lot of code to write. It would take a year for the company to bring a product out. By happy accident, I joined the analyst firm Aberdeen Group fourteen years ago with a mission to cover SFA. My instincts have always drawn me to disruptive innovation and I had a notion that I was going to cover hosted deployment models that focused on SFA. How lucky was that?
I was just getting settled into my job when Salesforce representatives came to Boston to brief the analyst community as part of the company’s rollout. Having come from a technology sales and marketing background and having directed the development of an in-house SFA system in a prior life, I got it right away, especially the part about subscriptions and being able to access customer data from anywhere that I could get an Internet connection. I was an immediate fan.
But it’s important to understand that Salesforce was not the only game in town. There were lots of hosted services offering an SFA product, though today they have all either disappeared or been rolled up into larger companies. Only Salesforce remains as an independent first mover and it has become a force in the CRM industry largely because of the vision of a core group that includes co-founder and technology guru, Parker Harris and, of course, CEO, Marc Benioff.
Today Salesforce looks like a no-brainer but fifteen years ago it was anything but. It was going up against some Goliaths with a stripped down product in a market where its only innovation was not the product itself but its delivery and business models. If it or any other SaaS company was going to survive it would have to steal market share from Goliath. Not a pretty picture but the stuff of corporate lore and mythology.
It is my firm belief that absent Benioff’s genius for promotion and an iron willed determination to sculpt the future of enterprise computing, Salesforce today would be just more road kill on the (metaphorical) side of Route 101.
But Benioff and a team of believers pulled it off. He made storing data in the cloud not scary but sexy. He took on the dominant player in CRM at the time, Siebel Systems, much earlier than I thought practical, with a campaign that featured a little kid writing at a blackboard, “I will not let Siebel take my lunch money.” It was a brilliant summation of everything Salesforce and Benioff wanted to achieve at the time. Benioff wanted to deliver an order of magnitude improvement in enterprise software’s dismal cost curve while also making CRM an easy installation that even small and medium businesses could accomplish.
In the process, Salesforce became the primary industry promoter of the subscription model and started a whole economic model that resonates throughout the culture today. No they weren’t the only ones doing subscriptions, far from it, but Salesforce and Benioff made subscriptions hip and sexy and sexiness drove success.
Salesforce has undergone more self-reinvention than I can count over the last fifteen years. Actually I can count it. The company seems to reinvent itself every 2 to 3 years, a torrid pace but one that has brought it to a leadership position in numerous Gartner Magic Quadrants, and the verge of the Fortune 500.
If the company has an Achilles Heel it is the tendency that all rapidly growing companies have of reverting to the mean, becoming average. In other words how do you keep “La Revolution” going without becoming a self-parody or the Fidel of tech? Here Salesforce has had incredible luck not only with its serial reinventions, but have you noticed that the company’s reinventions have all involved building products that it needs internally that also happen to be what the market needs too?
Salesforce’s early customers were emerging companies like itself so they needed high quality systems that didn’t cost a lot but that would enable them to compete with the big boys. As the successful ones grew they needed better ways to communicate and collaborate internally to prevent the stasis and sclerosis that organizations with large populations and rigid processes inevitably acquire.
Salesforce delivered Chatter, its collaboration tool and workflow to automate as many internal processes as possible. It embraced the social wave with a bear hug that has enabled it to effectively communicate with customers and prospects and it has shown its customers how to use these tools to streamline their operations too.
The company has also paid close attention to IT and application development. Understanding the disruption that mobility is causing, it has moved to provide development, maintenance, and deployment tools that enable business systems to evolve at rates very close to their underlying business processes. Exactly what it also needs in its continuing evolution.
While the company might not revert to the mean while Benioff and Harris are running things, it’s worth noting that the mean is chasing Salesforce. Every major business software vendor, plus a cadre of innovators spotting niche opportunities, is hot on the trail of Salesforce’s innovations.
Windows is effectively dead as a place to run business apps except for its necessity for supporting browsers where most applications run today. Everyone has a cloud strategy today including all of the nay-sayers of a decade ago who finally gave up being wrong all the time. Everyone is trying to develop an App Store — a term Salesforce coined before Benioff gave it to friend Steve Jobs and Apple — on that, all I can say is that Benioff is not always right. Ditto for the emerging ecosystems of partners with plug and play applications.
The list goes on and as if that weren’t enough, there’s philanthropy to discuss too. Benioff has been one of the earliest and most vocal supporters of the 1:1:1 model of philanthropy that posits donating one per cent each of a company’s equity, people time, and profits to charity. The Salesforce.com Foundation has become a model in Silicon Valley and other companies have emulated it creating a new force in public giving. Benioff is also not shy about his $100 million donation to UCSF Children’s Hospital, which will certainly enrich San Francisco and the Bay Area for a long time into the future.
There’s more but it’s enough for now to say that Salesforce.com has made a significant mark on an industry, a region, and even on the way we think of business today. That’s not bad for a fifteen year-old.
Some intellectual wag once described newspapers as the first draft of history with good and obvious reason. Now I have come to the conclusion that Dreamforce is the first draft of Salesforce.com’s annual plan. It has been obvious for several years but as the company has grown it has invested increasing resources into both the initial event and in the follow on activities in which Chairman and CEO Marc Benioff barnstorms the planet bringing his annual message. Perhaps the more current image should be a rock group publishing an album then going on tour. Whatever.
The 2014 World Tour started this week in New York (as usual) amid an arctic vortex of hyper cold that seemed to have almost no effect on participation. New Yorkers, and we Easterners in general, are a hardy bunch. The lone casualty of the event was the host who was sucking on lozenges in his speech though he was otherwise unaffected.
There was a lot to get through in the daylong event. At the same time the company published its Spring ’14 release notes, a tome of more than 300 pages which I am sure they did not get all the way through in PowerPoint and I will not attempt here.
The big points, I think, are these. The company’s strategy is to foster an attitude of developing apps first for the small screen and then extrapolating out to the larger devices. This idea, while not new, supports the notion of mobility and the move from business conducted at the desktop to doing business anywhere, anytime. Salesforce has the luxury of pursuing this approach because it took care of things like social orientation and marketing earlier so that it is now free to go after this next phase of computing.
To be clear, the company believes the next phase of computing involves the man-machine interface and Benioff’s vision is of a customer experience with software support for the products, services, devices, and people involved in both sides of the relationship. It is a tall order and while there are products and large enterprise customers embracing the outlines, it is still partly aspirational and it will take a few years to bring this brave new vision to Main Street.
To make this possible, though, Salesforce made significant enhancements to its burgeoning platform including increasing its API set by an order of magnitude. There are ten times the number of APIs now than there were a year ago which makes it possible for all of the company’s components and customers’ developed apps to all run like one big, well-oiled machine.
At a finer grained level, the company appears to be trying to bring the business public along to a new business model, one that includes people and their devices but which also requires a different orientation by vendors. Nobody told me this and I am reporting what I see. The old model starts with concepts of selling more, increasing profits, and all of the virtues that CRM has been peddling for a long time. But the reality of the marketplace is different and it is increasingly that direction that the company appears to be steering towards.
Old CRM assumes a limitless marketplace of new opportunities to be captured as fast as possible so that the seller can move onto the next one — call it a linear model. Traditional attributes of CRM that promise faster deals sell well in this environment. However, the marketplace reality is one of limits, the number of potential customers in any market is vast but it is limited and increasingly vendors are reaching the limits of growth in new accounts. They are realizing instead that selling more means selling again as in selling a new version to an existing customer — call that the lifecycle model.
The lifecycle model’s reality is driving the inclusion of things like social media into the CRM suite and it is driving the intense interest in marketing by all vendors. It has also been, I think, a driving force in the sudden interest in customer service as evidenced by the recent acquisitions of Parature by Microsoft and KANA by Verint.
It should be obvious but let me say it, you can’t sell the new gizmo to a customer who is disgruntled nor will that customer be likely to say nice things about you in the market, thus the new emphasis on customers and nurturing and the company buying frenzy.
More subtlety this reality changes the fundamental relationship between vendor and customer, a change most easily seen in terminology. Throughout the presentations in New York, save one, the Salesforce presenters were on message referring to customers as customers and not as consumers. Using consumers references the linear business model steeped in the idea of limitless markets and supply chains working full tilt to deliver a steady stream of things that are lapped up just in time.
But the model and the focus that Salesforce is building products to support goes beyond the linear to the cyclical and it understands that customers — who are increasingly subscribers — let their demand ebb and flow. Vendors therefore must remain alert to the vagaries of customers’ demand by being vigilant and ready to nurture. Indeed the nurture cycle becomes the permanent condition in this model. That’s the real focus of embedding social media, analytics, and mobility.
This is not a done deal by any stretch and the company seemed to straddle its historic commitment to CRM while pointing out the future direction. It can and will only move as fast in the future direction as its customers appear ready to follow but it seems to be doing whatever it can to move the needle. In the one presentation where the speaker used consumer instead of customer, the message sounded slightly off to my ears. It was like the difference, if you speak Southern, of hearing “y’all” used in a plural context where everyone knows that “all y’all” is the proper syntax.
We aren’t at the point where the difference is glaring but I think 2014 might be the tipping point year for eliminating consumer from the discussion in favor of the word customer. All y’all should pay attention to that.
Oracle announced another software company purchase today. Its purchase of Responsys makes a few founders, VC’s, and assorted vested employees very happy for the holidays. Good for them. Really, I mean it. Good for anyone who has a liquidity event like this, regardless of time of year.
Over the last decade Oracle has demonstrated its ability to imitate the business model of Computer Associates, which made an art of buying software companies and milking them for their support revenue. It did quite well in the process though buying old companies is a bit like buying a used car. There might be some good miles left in the old dog but you also have to embrace the risk of future unexpected breakdowns.
But that was Oracle-as-CA 1.0, when it bought Siebel, PeopleSoft, and all the other client-server applications companies. Responsys is far from an old company and if you look at the companies Oracle has bought recently, they are far from over the hill. They are emerging companies in an emerging market with plenty of tread left on the tires, to continue the metaphor.
This has led many people to issue warnings to other vendors in the space like Salesforce. For instance, Raghu Raghavan, founder and CEO of Act-On, and a co-founder of Responsys, has a post addressing the purchase that says in part, “Salesforce now has a formidable competitor for the Marketing Cloud that they have so expensively acquired. On the B2C side, Oracle/Responsys is (and always has been) clearly superior to Salesforce/Exact Target, and on the B2B side, Oracle/Eloqua easily trumps Salesforce/Pardot. Whoops!”
Well maybe. The thing about predictions, which I always put into a sports metaphor, is that while a team might look pretty awesome on paper, you still have to play the games. Nowhere was this clearer than with this year’s Red Sox. The team crashed and burned in September 2012 and no one expected much out of them this year but they went on to win the whole enchilada. Ditto the Yankees. Riddled with injuries and a certain albatross named A-Rod, they didn’t have a great year (for them) but they sure were entertaining in part because they kept finding a way to compete and win. I see Salesforce more like the Yankees. They’ve had some stellar seasons and they always find a way to win.
One thing Raghavan’s quote obviously doesn’t take into account is that the world has already moved beyond marketing automation as the shiny new object. It’s still way, way important but as recently as Dreamforce, Salesforce indicated that marketing is already in the rearview mirror just as surely as the current year is. That’s important too because, Salesforce has been calling the tune in CRM for many years now. First it was multitenancy and SaaS, then cloud, then social, then marketing, and now platform and becoming a customer company. This last advance is more than a slogan and it is the heart of why Oracle’s acquisition signals overreach and not shrewdness.
The fundamental assumption of the approach used by Oracle, and you might as well say Microsoft and SAP too, is that the market has not changed and will not change much. That vision is expressed in the vendor-consumer model and the product sale vs. subscription consumption model, take your pick. The reality is that vendor-consumer works well in new markets with new categories because it depends on land rush customer mentality. Seen many new categories lately? Hmmm?
Also, the subscription model is advancing on multiple fronts turning all kinds of products into services. More importantly, subscriptions are teaching consumers to be customers in a very different model where the customer forms half of a virtuous cycle of dependency that is antithetical to the vendor-consumer linear model. It’s a subscription culture today and culture is pervasive so regardless of whether you operate a subscription model or not, your customers are approaching you from that mind set. Approaching them from your old mindset might be hazardous to your business.
If Salesforce’s CEO and ringmaster, Marc Benioff, is right, then becoming a customer company is going to take more than the resources of a single company, it will require the efforts of a village, a community of loosely associated partners with solutions based on a common platform.
In the matchup between Oracle-as-CA 2.0 and Salesforce, I like Salesforce’s chances. I’ve said it before but it bears repeating, these guys have a Blue Ocean Strategy that isn’t predicated exclusively on which companies they buy and send into the breach.
They’re envisioning a future of business that they iterate towards and with every Dreamforce they get a little closer. But because the competition is stuck in an old model, Salesforce’s moves don’t entirely make sense and their boss can sometimes look like a simple huckster.
Who’s right? Which team will win it last game of the season? You have to put them on the field and let them play. So, game on, 2014, over and out.