Marketing Lessons from Salesforce.com

Over the holidays I had the opportunity to read Marc Benioff’s book Behind the Cloud. The book covers a wide range of topics from company culture and funding strategies to sales models and corporate philanthropy. However, I was surprised at how many great ideas the book contained about marketing, public relations, pricing and product development. Below is a list of the 10 approaches of Salesforce.com that I thought were most compelling. But I would encourage to you read the entire book. I was aware of many of Salesforce’s marketing tactics over the past few years, but Benioff’s book ties all the ideas together into a cohesive strategy that is extremely inspiring.

1) Building a Brand with Personality – “A brand is a company’s most important asset. A company can’t own its facts. If the company’s facts (speed, price, quality) are superior to the competition, any good competitor will duplicate them, or worse, improve upon them, as soon as possible. What a company can own, however, is a personality.” Salesforce.com created a personality around the No Software concept that created an emotional attachment with its customers.

2) PR Doesn’t Require a Big Budget – Salesforce.com treats the media as allies rather than adversaries, providing the top tier journalists with direct access to his contact details. “Position yourself either as the leader or against the leader in your industry. Every experience you give a journalist…must explain why you are different…This does not require a large team or a big budget; it just requires your time and focus.”

3) Piggyback on Your Competitor’s News – Benioff states that “I’m a believer in the power of public relations. It’s significantly cheaper to encourage a journalist to write a story than it is to buy an ad in the WSJ.” What I liked most about Salesforce’s approach to PR is the ability to “piggyback” on competitor announcements. When Oracle purchases Siebel, Salesforce positioned it as the death of traditional CRM. When Microsoft acquired Great Plains, Benioff put together an internal memo together then leaked it to the press.

4) Simplify the Story – Create a simple story that describes how your company is going to disrupt the traditional approach to a problem. Position your technology as innovative and game changing. Then choose some simple analogies that relate your product to something that is current and relevant. For example, “Salesforce.com is Amazon.com meets Siebel Systems” or “Force.com is Windows Internet operating system.”

5) Limitations of Free Pricing – Initially Salesforce.com gave its service away for free. Up to 5 users could access the CRM system for up to one year. Salesforce called this the “seed and grow strategy.” There was no need to have a salesperson involved. However, as time passed Salesforce.com learned that customers weren’t thinking as carefully about Salesforce.com’s implementation as if it had required a larger investment. Users were not conducting the appropriate levels of due diligence nor were they striving to win support of executive committees. With all the buzz you hear about “free” it was nice to see an industry leader recognize the limitations of the approach.

6) Consumerization of the Experience – Traditionally enterprise software has always been complex. An army of consultants or IT staff was required to install the software. Multi-day training sessions were required to instruct the end-users. Screens were intimidating with lots of optional fields that were not intuitive to users. Benioff stated that he wanted to “Deliver applications as web site with easy-to-use tabs. It will be a simple as Amazon or Yahoo!” He commented that” Instead of tabs with books, CDs, DVDs – accounts, contacts, opportunities, forecasts and reports.”

7) Turning Bad News into Trust – As every SaaS company does at some point in its lifecycle, Salesforce.com encountered periods of unplanned downtime for its application. But rather than let journalists and competitors use the information against them, Salesforce responded with complete transparency. Much like in social media, being transparent and forthcoming about bad news makes it less newsworthy. Journalists love to write stories about companies when they are trying to deny or cover-up bad news. But it takes the fun out of the process for the media when the company is the first to announce its bad news. Salesforce.com took the transparency and trust became a strong part of branding and identity.

8) Get Your Customers to Tell You What Features to Build – Another genius innovation of Salesforce.com was the IdeaExchange. Historically companies have invested millions conducting primary research with customers to identify feature gaps and unsatisfied needs. IdeaExchange allowed Salesforce.com to introduce an idea for new product features to its customer base and then monitor how it resonated with community. As a result, the product management team could weed out bad ideas from good. As a result the company could avoid wasting time on building capabilities that no one would use. Benioff describes it as the “global focus group that never sleeps.”

9) Get Someone Else to Build Feature Enhancements – Companies both large and small struggle to build the long tail of features that their customers require. The genius in Salesforce’s Force.com (Platform as a Service) model is that they effectively offload this problem to a community of outside developers. Salesforce.com customers wanted more features, but they did not have the resource to build them. With Force.com the company made its code available for other companies to build their own complementary services. The Apex programming language was released to provide a development environment. AppExchange was created as a marketplace to promote and sell these applications.

10) The IPO is a Marketing Event – Benioff viewed the Salesforce.com IPO as an opportunity to build more credibility for its brand. “Most companies go public to raise cash, which they use to expand, acquire companies, or retire debt…First and foremost, we wanted credibility.” Listing the company on a public market provides not only financial options, but impacts across the whole business. “It’s like a Good Housekeeping seal of approval for companies, and the trust it instills can help retain talent, recruit leaders, expand business relationships, and reassure customers.” Furthermore, Benioff viewed the choice of listing on the NYSE (versus the NASDAQ) as a way to position the company differently. “We are in San Francisco, so people already think we’re flakey; and we’re a dot com, and those are going away quickly…We need the credibility and the panache of the NYSE brand: it’s traditional, old-line, well established…”

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