Salesforce.com's New Message: It's The Customer, Stupid
What's behind Salesforce.com's new 'customer company' spin? For starters, the previous social-centric message was not translating into sales.
Salesforce.com CEO Marc Benioff took the stage at the Waldorf Astoria Hotel in New York on Tuesday and floated a new "become a customer company" tag line. It seems like a pretty obvious message coming for a firm with the stock symbol "CRM." The question is whether this new spin will help Salesforce.com maintain the heady, 30%-plus growth rates it has reported in recent years.
Benioff's one-and-a-half hour keynote on being customer centric remixed many of the themes shared at Dreamforce in September. But the high notes have changed. Benioff kept returning to the theme of staying connected with customers, which elevated the importance of all things mobile. Facebook, Twitter and all things social still got plenty of mentions, but it was a far cry from the "become a social enterprise" appeal of recent years.
Benioff touched on other enablers of customer centricity, including location-aware services, big data, identity management, digital communities and, of course, the cloud. But the new messaging isn't about any one of these things; the point is that everything is in service to the customer.
"All of these things are taking us to a customer revolution, and it's the next logical step for our industry," Benioff said. "It's where we're all going, and we're starting to connect with customers in entirely new ways."
Despite Benioff's assertion that it's "an entirely new message," it didn't sound all that new and Tuesday's event had the familiar feel of other recent Salesforce.com events. Just as Dreamforce was organized around a series of customer interviews -- with CEOs and CIOs from Burberry, Coca-Cola, Ford, GE and Virgin America -- Tuesday's event highlighted a new batch of customers, including Honeywell, the 2012 Obama for America campaign, the Museum of Modern Art, NBC Universal and Unilever. The customer stories of transformation, agility and mobile and social connection with customers seemed much the same.
Why did Salesforce need to come up with a new message? For starters, the old social-centric spin was not translating into sales, according to financial equities analyst Peter Goldmacher of Cowen and Co. "A lack of customer traction around social marketing and accelerating declines in sales productivity lead us to believe that Salesforce's latest marketing gambit isn't paying off," wrote Goldmacher in a research note.
The competitive landscape is also changing quickly. Microsoft, Oracle and SAP are all now legitimately pushing into the cloud, and they're also offering mobile, social and collaboration options. There are other pressure points. Oracle's just-completed $870 million acquisition of cloud marketing firm Eloqua makes the Salesforce Marketing Cloud look incomplete. Where Eloqua combined with Oracle Social Marketing and Oracle Social Engagement and Monitoring covers all customer-interaction channels, Salesforce.com's acquisitions of Radian6 and Buddy Media (for just over $1 billion) addressed only social marketing.
In the human capital management (HCM) arena, Oracle and SAP now offer must-have applications like HR management, benefits, payroll and compensation management in the cloud while Salesforce.com offers the goal-, incentive- and performance-oriented Work.com. Innovative and user-friendly though Work.com may be, it's ultimately a nice-to-have app rather than a must-have app.
If Salesforce.com is going to keep up its fast growth, it will be on the strength of its sales and service applications, not fledgling forays into marketing and HCM. And as significant a catalyst as social networks may have been in the Arab Spring and other world events that Benioff constantly cited in 2011 and 2012, the more bankable bet for business is connecting with customers on now-ubiquitous smartphones and tablets.
No surprise, then, that Salesforce.com's hard news of the day was the release of new mobile capabilities for service. A new HTML5-based Service Cloud Touch platform follows on from last year's Salesforce Touch debut, designed to improve the user experience for increasingly diverse smartphones and tablets. The Mobile Service Cloud Communities introduced offer a platform for building self-service knowledge bases and user forums for customers. Service Cloud Chat delivers a mobile version of the Web chat capabilities now so common on commerce sites. Coming later this year is a mobile co-browsing service akin to the Web co-browsing capabilities used by help desks. This will help in sales and service interactions.
None of these new offerings are earth shattering on their own, but they're practical ways to better serve customers. What's more, the people who sign checks for Salesforce.com services might be less inclined to question the value of mobile capabilities than social capabilities.
Now that Salesforce.com is reaching the $3 billion annual revenue threshold, sustaining fast growth may get harder, particularly with big guns like Microsoft, Oracle and SAP pressing customers for all-inclusive cloud deals. We'll see how the company is faring when it reports its latest quarterly results later this week.
For now, the new "be a customer company" tag line seems like a "keep it simple, stupid" return to the core role of CRM. Yes, it's in the fresh context of mobile, social and cloud -- plus big data, location aware, identity aware and so on. But there's no shortage of competitors hitting on these same themes. It will take more than a tag line to stay ahead of the pack.
Google in the Enterprise SurveyThere's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity ≠products, and 69 percent cite Google Apps' good or excellent ≠mobility. But progress could still stall: 59 percent of nonusers ≠distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
Join us for a roundup of the top stories on InformationWeek.com for the week of April 24, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week!